Facilities Planning

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					Facilities Planning - Unit    01
Facilities Planning Introduction
Definition of Facility Planning

 Facility Planning determines how an activity’s tangible fixed
 assets best support achieving the activity’s objectives.

   In manufacturing, the objective is to support production.
   In an airport, the objective is to support the passenger
    airplane interface.
   In a hospital, the objective is to provide medical care to

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Hierarchy of Facility Planning
                                                           Structural Design

                                              Facility          Layout
                                              Design            Design

         Source for Figure: Tompkins and White,            Handling System
         Facilities Planning, 2nd edition, Wiley               Design

Location - is the placement of a facility with respect to customers, suppliers, and
other facilities with which it interfaces.
Structure - consists of the building and services (e.g., gas, water, power, heat, light,
air, sewage).
Layout - consists of all equipment, machinery, and furnishings within the structure.
Handling System - consists of the mechanism by which all interactions required by
the layout are satisfied (e.g., materials, personnel, information, and equipment
handling systems).

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 Strategic Facilities Planning Issues
1.  Number, location, and sizes of warehouses and/or distribution centers.
2.  Centralized versus decentralized storage supplies, raw materials, work-in-process, and
    finished goods for single- and multi-building sites, as well as single- and multi-site
3. Acquisition of existing facilities versus design of model factories and distribution centers
    of the future.
4. Flexibility required because of market and technological uncertainties.
5. Interface between storage and manufacturing.
6. Level of vertical integration, including "subcontract versus manufacture" decisions.
7. Control systems, including materials control and equipment control.
8. Movement of materials between buildings, between sites.
9. Changes in customers' and suppliers' technology as well as firm's own manufacturing
    technology and materials handling, storage, and control technology.
10. Design-to-cost goals for facilities.

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Facility Design
Sequential Approach vs. Integrated Approach

   Product       Process      Facility        Handling           Production
   Design        Design       Layout           System             Planning

 Sequential Approach

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Facility Design
Sequential Approach vs. Integrated Approach

Integrated Approach:                                         Concurrent Engineering
Impressive results in cost, quality,                         Terms of product, process, scheduling
productivity, sales, customer                                and facility design planners work with
satisfaction, delivery time, inventory      Design           marketing, purchasing, etc. Personnel
levels, space + handling                                     address the design process in an
requirements, building size, etc.                            integrated way.

                                          Layout Design
                                         Material Handling
                                          System Design

                 Product                                           Schedule
                 Design                                             Design

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Productivity Model

    Input          Enterprise       Output

            Productivity = Output / Input

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Productivity Model

    Input          Enterprise       Output

            Productivity = Output / Input

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Hierarchy of Facility Planning
Layout Design

                                Structural Design

                    Facility         Layout
                    Design           Design

                                Handling System

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Layout Design - Introduction

 Facility layout means planning:
    for the location of all machines, utilities, employee
     workstations, customer service areas, material
     storage areas, aisles, restrooms, lunchrooms,
     internal walls, offices, and computer rooms
    for the flow patterns of materials and people
     around, into, and within buildings

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Layout Design – Introduction
Planning for required Spaces and Areas

    Equipment
    Work stations
    Material storage
    Rest/break areas
    Utilities
    Eating areas
    Aisles
    Offices

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Layout Design – Introduction
Characteristics of the Facility Layout Decision

 Location of these various areas impacts the flow
  through the system.
 The layout can affect productivity and costs
  generated by the system.
 Layout alternatives are limited by
    the amount and type of space required for the
     various areas
    the amount and type of space available
    the operations strategy

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Layout Design – Introduction
Characteristics of the Facility Layout Decision

 Layout decisions tend to be:
    Infrequent
    Expensive to implement
    Studied and evaluated extensively
    Long-term commitments

                                              Facilities Planning Introduction - 13
Facility Layout
A Layout problem may be to:
    determine the location for a new machine,
    develop a new layout for an existing production plant,
    develop a layout for a new production plant,
    etc.
A Layout problem may arises due to:
    changes in the design of a product,
    addition or deletion of a product,
    change in the demand of a product,
    changes in the design of the process,
    addition or deletion of a process,
    replacement of equipment,
    etc.

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Facility Layout – Strategic Importance
Proper layout enables:
 Higher utilization of space, equipment, and people
 Improved flow of information, materials, or people
 Improved employee morale and safer working
 Improved customer/client interaction
 Flexibility

Poor Layout costs you time and money.

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Example of how a facility layout can save you money
McDonald’s - New Kitchen Layout
     No food prepared ahead except patty
     Elimination of some steps, shortening
      of others
     New bun toasting machine (11
      seconds vs. 30 seconds)                 McDonald’s
                                              over 95 billion served
     Repositioning condiment containers
      (one motion, not two)
     Sandwiches assembled in order
     Production levels controlled by
     Discard only meat when sandwiches
      do not sell fast enough
     Savings of $100,000,000 per year in
      food costs

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Example of how a facility layout can save you money
McDonald’s - New Kitchen Layout

 Facility Innovations at McDonald’s over the years
  Indoor seating (1950’s)
  Drive-through window (1970s)
  Adding breakfast to the menu (1980s)
  Adding play areas (1990s)                     over 95 billion served

      Three out of the four are layout decisions,
      which one isn’t?

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Layout Strategies - Manufacturing vs. Service

        Characteristic       Manufacturing    Service
   Output                      Tangible      Intangible
   Customer contact
   Uniformity of input
   Labor content
   Uniformity of output
   Measure of Productivity       Easy         Difficult
   Correcting Quality            High           Low

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Layout Strategies

 Fixed-position layout
    When building large bulky projects such as ships
     and buildings
 Process-oriented layout
    When you have low-volume, high-variety
     production (“job shop”, intermittent production)
 Product-oriented layout
    When you need the best personnel and machine
     use in repetitive or continuous production

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Layout Strategies

 Office layout
    When you have office workers, their equipment,
      and spaces/offices to provide for movement of
 Retail/service layout
    When you need lots of shelf space and to be able
      to respond to customer behavior
 Warehouse layout
    When you need to trade-off between space and
      material handling

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Layout Strategies – Examples and Criteria

 Layout strategy       Example                  Criteria
 Service/retail    Drug store         Expose customer to high
                   Grocery store      margin items
                   Department store
 Storage           Distributor        Minimize storage and
                   Warehouse          handling costs
 Product oriented TV assembly line    Minimize line imbalance,
                                      delay, and idle time

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Areas of Concern in Layout Strategy


        Service                       Material
         Areas                       Attributes
   Warehousing        Strategy


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Requirements of a Good Layout

  an understanding of capacity and space
    selection of appropriate material handling
    decisions regarding environment and aesthetics
    identification and understanding of the
     requirements for information flow
    identification of the cost of moving between the
     various work areas

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Principles of a Good Layout

   Straight-line Flow Pattern when possible
   Backtracking kept to a Minimum
   Predictable Production Time
   Little In-process materials storage
   Open Floor plans so everyone can see what is going on
   Bottlenecks under control
   Workstations close together
   Minimum of material handling
   Easy adjustment to changing conditions

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Layout in Services - Office
Situation: The office layout process deals with situations where the
primary consideration is the movement of information and
communications carried out by:
    face-to-face conversations
    phone or computers
    movement of hard copy
    e-mail
    meetings
    intercom speakers

 Hotel Executive Offices
 Accounting Firm Offices

    An increasing number of the U.S. workforce work in an office environments

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Layout in Services – Office
Situation: Service buildings differ from manufacturing facilities in that
instead of product flow, the flow involves people and information.

Buildings must:
   be attractive
   have handicap access
   be secure
   be wired for communications (computer networks, etc)
   provide for efficient customer flow
   have adequate parking

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Layout in Services – Office

                              Facilities Planning Introduction - 27
Principles of a Good Layout
Face to Face Services
   Easily understood service flow pattern
   Adequate waiting facilities
   Easy communication with customers
   Customers in view of servers throughout the process
   Clear entry and exit points with adequate checkout facilities
   Customers see only what you want them to see
   Balance between waiting and service areas
   Minimum walking and material movement
   Lack of clutter

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   Layout Levels
                                               Space Planning
                 Level          Activity                         Environment     Output

                    I        Site Location &                      World or
                 Global         Selection                         Country

                   II                           Buildings or
                             Site Planning                          Site
                 Supra                          Site Features

                   III                          Work cells or
                             Department or                        Building
              Macro Layout                      Departments
                             Block Layout

                                               Workstations or
                   IV         Work cell of                         Cells or
                                                 Work cell
              Micro Layout    Department                         Departments

                              Workstation      Tool & Fixture
               Sub Micro                                         Workstation
                               Design            Locations

From:                     Facilities Planning Introduction - 29
   Layout Levels - Continued
   At the Global level, we select a site location. This involves factors such as
   freight cost, labor cost, skill availability and site focus.

   At the Supra-Layout level we plan the site. This includes number, size,
   and location of buildings. It includes infrastructure such as roads, water, gas
   and rail. This plan should look ahead to plant expansions and eventual site

   The Macro-Layout plans each building, structure or other sub-unit of
   the site. Operating departments are defined and located at this level.
   Frequently, this is the most important level of planning. A Macro-Layout
   institutionalizes the fundamental organizational structure in steel and

From:       Facilities Planning Introduction - 30
   Layout Levels - Continued

   The Micro-Level IV determines the location of specific equipment and
   furniture. The emphasis shifts from gross material flow to personal space
   and communication. Socio-Technical considerations dominate.

   The sub micro level focuses on individual workers. Here we design
   workstations for efficiency, effectiveness and safety. Ergonomics is key.

   Ideally, the design progresses from Global to Sub-Micro in distinct,
   sequential phases. At the end of each phase, the design is "frozen" by

From:      Facilities Planning Introduction - 31
New Trends in Manufacturing Layouts
 Designed for quality and flexibility
 Ability to quickly shift to different product models or
  to different production rates
 Cellular layout within larger process layouts
 Automated material handling
 U-shaped production lines
 More open work areas with fewer walls, partitions, or
  other obstacles
 Smaller and more compact factory layouts
 Less space provided for storage of inventories
  throughout the layout

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Wrap-Up: World-Class Practices
 Strive for flexibility in layouts
    Multi-job training of workers
    Sophisticated preventive-maintenance programs
    Flexible machines
    Empowered workers trained in problem solving
    Layouts small and compact
 Services follow the above practices plus incorporate
  customer needs in design

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Few More Words on
Layout Strategy Objectives
 Develop an economical layout which will meet the
  requirements of:
    product design and volume (product strategy)
    process equipment and capacity (process strategy)
    quality of work life (human resource strategy)
    building and site constraints (location strategy)

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Facilities Planning – What’s Coming up?
   Unit 01 - Facilities Planning Introduction
   Unit 02 - Transformation Systems and Process Selection
   Unit 03 - Layout Flow Analysis
   Unit 04 - Layout Types: Manufacturing
   Unit 05 - Layout Types: Service and Retail
   Unit 06 - Balancing Production Lines
   Unit 07 - Layout Design: Systematic Layout Planning
   Unit 08 - General Layout Planning and Evaluation
   Unit 09 - Material Handling Principles
   Unit 10 - Material Handling Equipment
   Unit 11 - Warehousing and Storage
   Unit 12 - Facilities Location Planning and Analysis

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