Layout Strategy
Introduction
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What – Layout Decisions
Where – For efficiency or customer
appeal
Why – Improve Profitability
What is Layout?
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Placement of machines
Offices
Service centers
Efficient flow of materials, people,
information
Layout Achieves
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Higher utilization of space, equipment,
people
Improved flow of information,
materials, people
Improved morale and safe working
conditions
Improved customer / client interaction
Flexibility
Good Layout Requires
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Material handling equipment
Capacity and space requirements
Environment and aesthetics
Flows of Information
Cost of moving between work areas
Fixed Position Layout
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Project remains in one place
Workers and equipment come to the
work area
Limited space
At different stages, different materials
needed
Volume of materials needed is dynamic
New Innovations
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Move some construction off-site
Modular construction – ie shipbuilding
Group technology – group components
Process-Oriented Layout
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Low volume
High variety
Similar machines grouped together
Product moves from one department to
another
Advantage: flexibility
Disadvantage: set-up and movement
Material Handling Costs
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Arrange departments to minimize
material handling
Work cells
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Temporary
Product-oriented arrangement
Reduced work-in-process inventory
Less floor space
Reduced raw material and finished goods
inventory
Reduced labour
More employee participation
Increased use of equipment
Reduced investment in machinery
Work cells require
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Identified families of products
Highly trained and flexible employees
Support to get up and running
Focused Work Centre
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Product oriented arrangement
Office Layout
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Moving information instead of materials
Work cell concept still valid
Technology allows increasing layout
flexibility
Virtual companies – hoteling
Retail Layout
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Profitability related to customer exposure to
products
High-draw items around periphery
Prominent locations for high-impulse and
high-margin
Disperse “power items” around store
End-aisle locations have high exposure
Convey mission by position lead-off
department
Warehouse and Storage
Layout
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Find optimum cost between material
handling and storage space
Variety of items stored and number of
items picked per order
Shipping and receiving areas
Cross-Docking
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Avoid placing in storage
Ship what is received
Reduce distribution costs
Speed restocking
Requires tight scheduling
Requires accurate product information
Random Stocking
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Locate stock wherever there is space
Customizing
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Warehouse adds value to product by
customizing it for customer
Modification
Repair
Labeling
Packaging
Repetitive Product-Oriented
Layout
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High volume
Low variety
Expensive!
Volume adequate for high equipment
utilization
Product demand stable
Product standardized
Adequate supplies of raw materials
Product Layouts
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Fabrication line
Assembly line
Time spent at each stage in the line
must be balanced
Advantages
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Low variable cost per unit
Low material handling cost
Reduced work-in-process inventory
Easier training and supervision
Rapid throughput
Disadvantages
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High investment – requires high volume
Work stoppage stops entire operation
Low flexibility
Assembly-Line Balancing
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Cycle time = Production time available
per day / units per day
Minimum Workstations = Sum of task
times / Cycle time
Efficiency = Sum of task times / (actual
workstations x assigned cycle time)