Administración Industrial
Operations Management
Chapter 9 –
Layout Strategy
© 2006
Prentice
Hall, Inc. Hall, Inc.
©
2006
Prentice
19 – 1
McDonald’s New Kitchen
Layout
Fifth major innovation
Administración Industrial

© 2006 Prentice Hall, Inc.






Sandwiches assembled in order
Elimination of some steps, shortening of others
No food prepared ahead except patty
New bun toasting machine and new bun formulation
Repositioning condiment containers
Savings of $100,000,000 per year in food costs
29 – 2
Administración Industrial
McDonald’s
New Kitchen
Layout
© 2006 Prentice Hall, Inc.
39 – 3
Administración Industrial
Strategic Importance of
Layout Decisions
The objective of layout strategy
is to develop an economic layout
that will meet the firm’s
competitive requirements
© 2006 Prentice Hall, Inc.
49 – 4
Layout Design Considerations
Administración Industrial
 Higher utilization of space, equipment,
and people
 Improved flow of information, materials,
or people
 Improved employee morale and safer
working conditions
 Improved customer/client interaction
 Flexibility
© 2006 Prentice Hall, Inc.
59 – 5
Types of Layout
1. Office layout
2. Retail layout
Administración Industrial
3. Warehouse layout
© 2006 Prentice Hall, Inc.
4. Fixed-position layout
5. Process-oriented layout
6. Work cell layout
7. Product-oriented layout
69 – 6
Types of Layout
Administración Industrial
1. Office layout - positions workers,
their equipment, and spaces/offices
to provide for movement of
information
2. Retail layout - allocates shelf space
and responds to customer behavior
3. Warehouse layout - addresses
trade-offs between space and
material handling
© 2006 Prentice Hall, Inc.
79 – 7
Types of Layout
Administración Industrial
4. Fixed-position layout - addresses
the layout requirements of large,
bulky projects such as ships and
buildings
5. Process-oriented layout - deals with
low-volume, high-variety production
(also called job shop or intermittent
production)
© 2006 Prentice Hall, Inc.
89 – 8
Administración Industrial
Types of Layout
6. Work cell layout - a special
arrangement of machinery and
equipment to focus on production of
a single product or group of related
products
7. Product-oriented layout - seeks the
best personnel and machine
utilizations in repetitive or
continuous production
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99 – 9
Good Layouts Consider
1. Material handling equipment
Administración Industrial
2. Capacity and space requirements
3. Environment and aesthetics
4. Flows of information
5. Cost of moving between various
work areas
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109 – 10
Layout Strategies
Office
Retail
Warehouse (storage)
Examples
Allstate Insurance
Administración Industrial
Microsoft Corp.
Kroger’s
Supermarket
Federal-Mogul’s
warehouse
Walgreens
The Gap’s
distribution center
Bloomingdale’s
Problems/Issues
Locate workers
requiring frequent
contact close to one
another
Expose customer to
high-margin items
Balance low-cost
storage with low-cost
material handling
Table 9.1
© 2006 Prentice Hall, Inc.
119 – 11
Layout Strategies
Project
(fixed position)
Job Shop
(process oriented)
Administración Industrial
Examples
Ingall Ship Building Corp.
Arnold Palmer Hospital
Trump Plaza
Hard Rock Cafes
Pittsburgh Airport
Problems/Issues
Move material to the
limited storage area
around the site
Manage varied material
flow for each product
Table 9.1
© 2006 Prentice Hall, Inc.
129 – 12
Layout Strategies
Work Cells
(product families)
Repetitive/ Continuous
(product oriented)
Administración Industrial
Examples
Hallmark Cards
Sony’s TV assembly line
Wheeled Coach
Dodge minivans
Standard Aero
Problems/Issues
Identify product family,
build teams, cross train
team members
Equalize the task time at
each workstation
Table 9.1
© 2006 Prentice Hall, Inc.
139 – 13
Administración Industrial
Office Layout
 Grouping of workers, their
equipment, and spaces to provide
comfort, safety, and movement of
information
 Movement of information is main
distinction
 Typically in state of flux due to
frequent technological changes
© 2006 Prentice Hall, Inc.
149 – 14
Relationship Chart
Value
1
President
Chief Technology Officer
Engineer’s area
3
Absolutely
necessary
E
Especially
important
I
Important
O
Ordinary OK
U
Unimportant
X
Not desirable
4
U
A
I
Secretary
I
I
A
A
Central files
Equipment cabinet
Photocopy equipment
9
O
E
A
O
U
O
I
X
O
U
8
U
E
U
O
U
O
E
U
7
I
I
X
6
I
I
Office entrance
5
A
O
Administración Industrial
A
2
O
Closeness
A
E
E
Storage room
© 2006 Prentice Hall, Inc.
Figure 9.1
159 – 15
Supermarket Retail Layout
Administración Industrial
 Objective is to maximize
profitability per square foot of
floor space
 Sales and profitability vary
directly with customer exposure
© 2006 Prentice Hall, Inc.
169 – 16
Five Helpful Ideas for
Supermarket Layout
1. Locate high-draw items around the
periphery of the store
Administración Industrial
2. Use prominent locations for high-impulse
and high-margin items
3. Distribute power items to both sides of
an aisle and disperse them to increase
viewing of other items
4. Use end-aisle locations
5. Convey mission of store through careful
positioning of lead-off department
© 2006 Prentice Hall, Inc.
179 – 17
Administración Industrial
Store Layout
Figure 9.2
© 2006 Prentice Hall, Inc.
189 – 18
Servicescapes
Administración Industrial
 Ambient conditions - background
characteristics such as lighting,
sound, smell, and temperature
 Spatial layout and functionality which involve customer circulation
path planning, aisle characteristics,
and product grouping
 Signs, symbols, and artifacts characteristics of building design
that carry social significance
© 2006 Prentice Hall, Inc.
199 – 19
Retail Slotting
 Manufacturers pay fees to retailers
to get the retailers to display (slot)
their product
Administración Industrial
 Contributing factors
© 2006 Prentice Hall, Inc.
 Limited shelf space
 An increasing number of new
products
 Better information about sales
through POS data collection
 Closer control of inventory
209 – 20
Retail Store Shelf Space
Planogram
Shampoo
Shampoo
Shampoo
Shampoo
Conditioner
Shampoo
Shampoo
Shampoo
Conditioner
© 2006 Prentice Hall, Inc.
Conditioner

Shampoo

Computerized tool
for shelf-space
management
Generated from
store’s scanner
data on sales
Often supplied by
manufacturer
Shampoo
Administración Industrial

5 facings
2 ft.
219 – 21
Warehousing and Storage
Layouts
Administración Industrial
 Objective is to optimize trade-offs
between handling costs and costs
associated with warehouse space
 Maximize the total “cube” of the
warehouse – utilize its full volume
while maintaining low material
handling costs
© 2006 Prentice Hall, Inc.
229 – 22
Warehousing and Storage
Layouts
Material Handling Costs
 All costs associated with the transaction
Administración Industrial
 Incoming transport
 Storage
 Finding and moving material
 Outgoing transport
 Equipment, people, material, supervision,
insurance, depreciation
 Minimize damage and spoilage
© 2006 Prentice Hall, Inc.
239 – 23
Warehousing and Storage
Layouts
Administración Industrial
 Warehouse density tends to vary
inversely with the number of
different items stored
 Automated Storage and Retrieval
Systems (ASRS) can significantly
improve warehouse productivity
 Dock location is a key design
element
© 2006 Prentice Hall, Inc.
249 – 24
Administración Industrial
Cross-Docking
 Materials are moved directly from
receiving to shipping and are not
placed in storage in the
warehouse
 Requires tight scheduling and
accurate shipments, typically
with bar code identification
© 2006 Prentice Hall, Inc.
259 – 25
Random Stocking
Administración Industrial
 Typically requires automatic identification
systems (AISs) and effective information
systems
 Random assignment of stocking locations
allows more efficient use of space
1. Maintain list of open locations
2. Maintain accurate records
3. Sequence items to minimize travel time
4. Combine picking orders
5. Assign classes of items to particular areas
© 2006 Prentice Hall, Inc.
269 – 26
Customization
Administración Industrial
 Value-added activities performed at
the warehouse
 Enable low cost and rapid response
strategies
 Assembly of components
 Loading software
 Repairs
 Customized labeling and packaging
© 2006 Prentice Hall, Inc.
279 – 27
Warehouse Layout
Traditional Layout
© 2006 Prentice Hall, Inc.
Customization
Administración Industrial
Storage racks
Conveyor
Staging
Shipping and receiving docks
Office
289 – 28
Warehouse Layout
Cross-Docking Layout
© 2006 Prentice Hall, Inc.
Office
Administración Industrial
Shipping and receiving docks
Shipping and receiving docks
299 – 29
Fixed-Position Layout
 Product remains in one place
Administración Industrial
 Workers and equipment come to
site
 Complicating factors
© 2006 Prentice Hall, Inc.
 Limited space at site
 Different materials required at
different stages of the project
 Volume of materials needed is
dynamic
309 – 30
Alternative Strategy
Administración Industrial
As much of the project as possible
is completed off-site in a productoriented facility
This can significantly improve
efficiency but is only possible when
multiple similar units need to be
created
© 2006 Prentice Hall, Inc.
319 – 31
Process-Oriented Layout
Administración Industrial
 Like machines and equipment are
grouped together
 Flexible and capable of handling a
wide variety of products or
services
 Scheduling can be difficult and
setup, material handling, and labor
costs can be high
© 2006 Prentice Hall, Inc.
329 – 32
Process-Oriented Layout
Patient A - broken leg
ER
triage
room
Patient B - erratic heart
pacemaker
Surgery
Administración Industrial
Emergency room admissions
Laboratories
Radiology
© 2006 Prentice Hall, Inc.
ER Beds
Pharmacy
Billing/exit
Figure 9.3
339 – 33
Process-Oriented Layout
Administración Industrial
 Arrange work centers so as to
minimize the costs of material
handling
 Basic cost elements are
© 2006 Prentice Hall, Inc.
 Number of loads (or people) moving
between centers
 Distance loads (or people) move
between centers
349 – 34
Administración Industrial
Layout at Arnold Palmer
Hospital
© 2006 Prentice Hall, Inc.
359 – 35
Process-Oriented Layout
n
Minimize cost = ∑
n
∑ Xij Cij
Administración Industrial
i=1 j=1
where
© 2006 Prentice Hall, Inc.
n = total number of work centers or
departments
i, j = individual departments
Xij = number of loads moved from
department i to department j
Cij = cost to move a load between
department i and department j
369 – 36
Process Layout Example
Administración Industrial
Arrange six departments in a factory to
minimize the material handling costs.
Each department is 20 x 20 feet and the
building is 60 feet long and 40 feet wide.
© 2006 Prentice Hall, Inc.
1. Construct a “from-to matrix”
2. Determine the space requirements
3. Develop an initial schematic diagram
4. Determine the cost of this layout
5. Try to improve the layout
6. Prepare a detailed plan
379 – 37
Process Layout Example
Number of loads per week
Department Assembly Painting
(1)
(2)
Assembly (1)
Administración Industrial
Painting (2)
Machine Shop (3)
Receiving (4)
Shipping (5)
50
Machine Receiving
Shop (3)
(4)
Shipping
(5)
Testing
(6)
100
0
0
20
30
50
10
0
20
0
100
50
0
0
Testing (6)
© 2006 Prentice Hall, Inc.
Figure 9.4
389 – 38
Administración Industrial
Process Layout Example
Figure 9.5
© 2006 Prentice Hall, Inc.
Room 1
Room 2
Room 3
Assembly
Department
(1)
Painting
Department
(2)
Machine Shop
Department
(3)
40’
Receiving
Department
(4)
Shipping
Department
(5)
Testing
Department
(6)
Room 4
Room 5
Room 6
60’
399 – 39
Process Layout Example
n
Cost = ∑
n
∑ Xij Cij
i=1 j=1
Administración Industrial
Cost =
© 2006 Prentice Hall, Inc.
$50
+ $200 +
$40
(1 and 2)
(1 and 3)
(1 and 6)
+
$30
+
$50
+
$10
(2 and 3)
(2 and 4)
(2 and 5)
+
$40
+ $100 +
$50
(3 and 4)
(3 and 6)
(4 and 5)
= $570
409 – 40
Process Layout Example
Interdepartmental Flow Graph
Administración Industrial
100
1
50
2
30
3
10
100
4
© 2006 Prentice Hall, Inc.
50
5
6
Figure 9.6
419 – 41
Process Layout Example
n
Cost = ∑
n
∑ Xij Cij
i=1 j=1
Administración Industrial
Cost =
© 2006 Prentice Hall, Inc.
$50
+ $100 +
$20
(1 and 2)
(1 and 3)
(1 and 6)
+
$60
+
$50
+
$10
(2 and 3)
(2 and 4)
(2 and 5)
+
$40
+ $100 +
$50
(3 and 4)
(3 and 6)
(4 and 5)
= $480
429 – 42
Process Layout Example
Interdepartmental Flow Graph
Administración Industrial
30
50
2
1
100
3
50
4
© 2006 Prentice Hall, Inc.
100
50
5
6
Figure 9.7
439 – 43
Administración Industrial
Process Layout Example
Figure 9.8
© 2006 Prentice Hall, Inc.
Room 1
Room 2
Room 3
Painting
Department
(2)
Assembly
Department
(1)
Machine Shop
Department
(3)
40’
Receiving
Department
(4)
Shipping
Department
(5)
Testing
Department
(6)
Room 4
Room 5
Room 6
60’
449 – 44
Computer Software
Administración Industrial
 Graphical approach only works for
small problems
 Computer programs are available to
solve bigger problems
© 2006 Prentice Hall, Inc.
 CRAFT
 ALDEP
 CORELAP
 Factory Flow
459 – 45
Administración Industrial
CRAFT Example
PATTERN
3
4
5
1
2
1
D
D
D
D
B
B
B
2
D
D
D
D
B
B
D
D
3
D
D
D
E
E
E
D
D
D
4
C
C
D
E
E
F
F
F
F
D
5
A
A
A
A
A
F
E
E
E
D
6
A
A
A
F
F
F
1
2
1
A
A
A
A
B
B
2
A
A
A
A
B
3
D
D
D
D
4
C
C
D
5
F
F
6
E
E
TOTAL COST
20,100
EST. COST REDUCTION
ITERATION
0
© 2006 Prentice Hall, Inc.
PATTERN
3
4
5
(a)
6
.00
TOTAL COST
14,390
EST. COST REDUCTION
ITERATION
3
(b)
6
70.
Figure 9.9
469 – 46
Work Cells
Administración Industrial
 Reorganizes people and machines
into groups to focus on single
products or product groups
 Group technology identifies
products that have similar
characteristics for particular cells
 Volume must justify cells
 Cells can be reconfigured as
designs or volume changes
© 2006 Prentice Hall, Inc.
479 – 47
Advantages of Work Cells
1.
2.
3.
Administración Industrial
4.
5.
6.
7.
© 2006 Prentice Hall, Inc.
Reduced work-in-process inventory
Less floor space required
Reduced raw material and finished
goods inventory
Reduced direct labor
Heightened sense of employee
participation
Increased use of equipment and
machinery
Reduced investment in machinery and
equipment
489 – 48
Administración Industrial
Improving Layouts Using
Work Cells
Current layout - workers
in small closed areas.
Cannot increase output
without a third worker and
third set of equipment.
Improved layout - cross-trained
workers can assist each other.
May be able to add a third worker
as additional output is needed.
Figure 9.10 (a)
© 2006 Prentice Hall, Inc.
499 – 49
Administración Industrial
Improving Layouts Using
Work Cells
Current layout - straight
lines make it hard to balance
tasks because work may not
be divided evenly
Figure 9.10 (b)
© 2006 Prentice Hall, Inc.
Improved layout - in U
shape, workers have better
access. Four cross-trained
workers were reduced.
U-shaped line may reduce employee movement
and space requirements while enhancing
communication, reducing the number of
workers, and facilitating inspection
509 – 50
Requirements of Work Cells
1. Identification of families of products
Administración Industrial
2. A high level of training and
flexibility on the part of employees
3. Either staff support or flexible,
imaginative employees to establish
work cells initially
4. Test (poka-yoke) at each station in
the cell
© 2006 Prentice Hall, Inc.
519 – 51
Staffing and Balancing Work
Cells
Determine the takt time
Administración Industrial
total work time available
Takt time =
units required
Determine the number
of operators required
total operation time required
Workers required =
takt time
© 2006 Prentice Hall, Inc.
529 – 52
Staffing Work Cells Example
600 Mirrors per day required
Mirror production scheduled for 8 hours per day
From a work balance chart
total operation time = 140 seconds
© 2006 Prentice Hall, Inc.
Standard time required
Administración Industrial
60
50
40
30
20
10
0
Assemble Paint
Test
Label Pack for
shipment
Operations
539 – 53
Staffing Work Cells Example
Administración Industrial
600 Mirrors per day required
Mirror production scheduled for 8 hours per day
From a work balance chart
total operation time = 140 seconds
Takt time = (8 hrs x 60 mins) / 600 units
= .8 mins = 48 seconds
total operation time required
Workers required =
takt time
© 2006 Prentice Hall, Inc.
= 140 / 48 = 2.91
549 – 54
Work Balance Charts

Administración Industrial



Used for evaluating operation times in
work cells
Can help identify bottleneck
operations
Flexible, cross-trained employees can
help address labor bottlenecks
Machine bottlenecks may require
other approaches
© 2006 Prentice Hall, Inc.
559 – 55
Focused Work Center and
Focused Factory
 Focused Work Center
Administración Industrial
 Identify a large family of similar products
that have a large and stable demand
 Moves production from a general-purpose,
process-oriented facility to a large work cell
 Focused Factory
© 2006 Prentice Hall, Inc.
 A focused work cell in a separate facility
 May be focused by product line, layout,
quality, new product introduction, flexibility,
or other requirements
569 – 56
Focused Work Center and
Focused Factory
Administración Industrial
Work Cell
Focused Work Center
Focused Factory
A work cell is a temporary
product-oriented
arrangement of
machines and
personnel in what is
ordinarily a processoriented facility.
A focused work center is a A focused factory is a
permanent productpermanent facility to
oriented arrangement of
produce a product or
machines and personnel
component in a productin what is ordinarily a
oriented facility. Many
process-oriented facility.
focused factories
currently being built
were originally part of a
process-oriented facility.
Example: A job shop with
machinery and
personnel; rearranged
to produce 300 unique
control panels.
Example: Pipe bracket
manufacturing at a
shipyard.
© 2006 Prentice Hall, Inc.
Example: A plant to
produce window
mechanism for
automobiles.
Table 9.2
579 – 57
Repetitive and ProductOriented Layout
Administración Industrial
Organized around products or families of
similar high-volume, low-variety products
 Volume is adequate for high equipment
utilization
 Product demand is stable enough to justify high
investment in specialized equipment
 Product is standardized or approaching a phase
of life cycle that justifies investment
 Supplies of raw materials and components are
adequate and of uniform quality
© 2006 Prentice Hall, Inc.
589 – 58
Administración Industrial
Product-Oriented Layouts
 Fabrication line
 Builds components on a series of machines
 Machine-paced
 Require mechanical or engineering changes
to balance
 Assembly line
 Puts fabricated parts together at a series of
workstations
 Paced by work tasks
 Balanced by moving tasks
Both types of lines must be balanced so that the
time to perform the work at each station is the same
© 2006 Prentice Hall, Inc.
599 – 59
Product-Oriented Layouts
Administración Industrial
Advantages
1.
2.
3.
4.
5.
Low variable cost per unit
Low material handling costs
Reduced work-in-process inventories
Easier training and supervision
Rapid throughput
Disadvantages
© 2006 Prentice Hall, Inc.
1. High volume is required
2. Work stoppage at any point ties up the
whole operation
3. Lack of flexibility in product or production
rates
609 – 60
Assembly-Line Balancing
Administración Industrial
 Objective is to minimize the imbalance
between machines or personnel while
meeting required output
 Starts with the precedence
relationships
© 2006 Prentice Hall, Inc.
1. Determine cycle time
2. Calculate theoretical minimum number
of workstations
3. Balance the line by assigning specific
tasks to workstations
619 – 61
Copier Example
Administración Industrial
Performance
Time
Task
(minutes)
A
10
B
11
C
5
D
4
E
12
F
3
G
7
H
11
I
3
Total time 66
© 2006 Prentice Hall, Inc.
Task Must Follow
Task Listed
Below
—
A
B
B
A
C, D
F
E
G, H
This means that
tasks B and E
cannot be done
until task A has
been completed
629 – 62
Copier Example
Administración Industrial
Performance
Time
Task
(minutes)
A
10
B
11
C
5
D
4
E
12
F
3
G
7
H
11
I
3
Total time 66
© 2006 Prentice Hall, Inc.
Task Must Follow
Task Listed
Below
—
A
B
B
A
C, D
F
E
G, H
5
10
11
A
B
C
3
7
F
G
4
12
E
D
3
11
I
H
Figure 9.13
639 – 63
Copier Example
Administración Industrial
Performance
Time
Task
(minutes)
A
10
B
11
C
5
D
4
E
12
F
3
G
7
H
11
I
3
Total time 66
© 2006 Prentice Hall, Inc.
480 available
mins per day
40 units required
Task Must Follow
Task Listed
Below
—
A
Production time
B
available per day
Cycle
B time = Units required per day
A
= 480 / 40
5
C, D
= 12 minutes per unit
C
F
10
11
3
7
n
E
for taskFi
A ∑ Time
B
G
Minimum
G, H
i=1
4
number of =
workstations
Cycle Dtime
12
11
3
I
= 66 / 12
E
H
= 5.5 or 6 stations
Figure 9.13
649 – 64
Copier Example
Administración Industrial
Line-Balancing Heuristics
1. Longest task time
Choose the available
with
480task
available
Performance Task Must
Follow
the longest task time mins per day
Time
Task Listed
Task2. Most
(minutes)
40 task
units
following tasks Below
Choose the available
withrequired
of following
A
10
—the largest number
Cycle
time = 12 mins
B
11
Atasks
Minimum
= 5.5 or 6
C 3. Ranked5 positional
BChoose the available
workstations
task for
D
Bwhich the sum of following task
weight 4
E
12
Atimes is the longest
5
F
3
C, D
the available
C task with
G 4. Shortest
7 task time
FChoose
10
11
3
7
the shortest
task
time
H
11
E
A
B
G
F
I 5. Least number
3
G,
H
of
Choose the available
4 task with
3
the least number ofDfollowing
Totalfollowing
time 66 tasks
I
12
11
tasks
© 2006 Prentice Hall, Inc.
E
H
Table 9.4
Figure 9.13
659 – 65
Copier Example
Administración Industrial
Performance
Time
Task
(minutes)
A
10
B
11
Station
C
52
D
4
11
E 10
12
F A
B
3
G
7
H
11
I
3
12
Stationtime 66
Total
E
1
© 2006 Prentice Hall, Inc.
480 available
mins per day
40 units required
Task Must Follow
Task Listed
Below
Station
3
—
A
5 B
C B
A
C, D
4
F
D E
G, H
Cycle time = 12 mins
Minimum
workstations = 5.5 or 6
3
7
F
G
Station 4
3
I
11
Station 6
H
Station
5
Figure 9.14
669 – 66
Copier Example
Administración Industrial
Performance
Time
Task
(minutes)
Task Must Follow
Task Listed
Below
480 available
mins per day
40 units required
A
10
—
Cycle time = 12 mins
B
11
A
Minimum
C
5
B
workstations = 5.5 or 6
D
4
B
E
12
A
F
3
C, D
∑ Task times
G
7
F
Efficiency =
(actual number ofE workstations) x (largest cycle time)
H
11
I
3
G, H
= 66 minutes / (6 stations) x (12 minutes)
Total time 66
= 91.7%
© 2006 Prentice Hall, Inc.
679 – 67