Introduction to Facility
Planning
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Competitive Global
Marketplace
Today’s world is much more competitive than the
world in which our parents and grandparents
worked.
“Open-market” countries depend heavily upon
imported manufactured goods.
Through early 1960’s
1960’s - Present
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Competitive Global Marketplace
Example
LP Gas Hose - Canada
Regulator - Italy
Brass Fittings - USA
All components assembled in USA . . .
Then shipped to China for assembly into gas grills which
are then shipped back to the USA for retail sale!
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Market Driven
Competitiveness
Survival of the fittest!
Every morning in Africa, a gazelle wakes up.
It knows it must run faster than the fastest
lion or it will be killed. Every morning a lion
wakes up. It knows it must outrun the
slowest gazelle or it will starve to death.
It doesn’t matter whether you are a lion or a
gazelle—when the sun comes up, you had
better be running.
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Competitive Business
Challenges
What makes some companies’ products seem
to have a cost advantage over others?
• Better manufacturing processes
• Desire to continuously improve
• Streamlined plant layout
5
Cycle Time
“One of the most noteworthy accomplishments in
keeping the price of Ford products low is the
gradual shortening of the production cycle. The
longer an article is in the process of manufacture
and the more it is moved about, the greater is its
ultimate cost.”
Henry Ford, 1926
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Cycle Time
One factor contributing to this lengthy production
cycle is the facility layout. Manufacturing facilities
design and material handling affect the productivity
and profitability of a company more than almost any
other corporate decision.
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Brief History of Plant
Layout
• Companies of the past utilized a draftsperson to
complete the plant layout.
• The general belief was that there was a void of
expertise in facility layout design.
• Problems could be overcome with an extra forklift or
conveyor length.
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Plant Layout
QC
Raw Stock
Shear
Stamp
Screw
Machine
Lathe
Brake
Mill
Weld
Grind
Drill
Finish
Ship
Rec
QC
Assembly
Parts Stock
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Impact of Poor Plant
Layout
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High material handling costs
Cycle and lead time delays
High WIP inventories
Lower quality
Product damage
Safety and morale problems
Poor equipment utilization
Congested aisles
Wasted floor space
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How Can We Improve?
Lean Manufacturing and Cellular Flow
Before:
6 Assemblers
Batch Assembly
C/T 4.5 days
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How Can We Improve?
Lean Manufacturing and Cellular Flow
After:
6 Assemblers
Flow / Pull
C/T 53 minutes
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Facility Improvement
Pitfalls
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Poorly planned layout
Lack of employee involvement
Lack of management commitment
Budgetary constraints leading to a
“piecemeal” approach
Focus on the almighty ROI versus the
future of the business
Short term management focus
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Facilities Planning Definition
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Analysis
Concept
Design
Implementation
 For producing of products and
services
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Manufacturing Savings
Where can we save costs in manufacturing?
Reduce or Eliminate• Work-in-process inventories (WIP)
• Non-value added activities
• Material handling costs
• Processing time
• Product defects
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Manufacturing Savings
The largest components of factory labor and the
cost of materials purchased and used in a
factory are:
• Internal transportation costs
• Material handling costs
• Storage costs
This includes both our manufacturing plants
and those of our suppliers!
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Facilities Layout Goals
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Goals should include:
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Minimize unit cost. Minimize project cost.
Optimize quality.
Promote the effective use of (a) people, (b) space, (c) equipment,
and (d) energy.
Provide for (a) employee convenience, (b) employee safety, and
(c) employee comfort.
Control project cost.
Achieve the production start date.
Build flexibility into the plan.
Reduce or eliminate excessive inventory.
Achieve miscellaneous goals.
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Five Types of Facility
Design Projects
1.
2.
3.
4.
5.
New Facility – fewer restrictions and constraints
on the layout since it is new
New Product – integration of a new product into
the existing process and layout
Design Changes – incorporate the impact of
design changes into the manufacturing process
Cost Reduction – redesign the existing layout to
facilitate cost reduction programs and ideas
Retrofit – similar to a new facility layout except
with the constraints present
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Continuous Improvement
Doctrine (CID)
The continuous improvement doctrine (CID) mandates
that a company will commit to continuous, ongoing
improvement plans for production processes, materials
handling, and plant layout. They further recognize that
these items are essential to achieve competitive
advantage. The CID plan will be developed and
maintained on an ongoing basis.
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