IEDA 4200
Design of Logistics and
Manufacturing Systems
Xuan QIU
Dept. of IEDA
HKUST
Spring 2023
Instructor’s Information
• Instructor: Xuan QIU
• Contact Information:
– Room 5549
– E-mail: xuanqiu@ust.hk
• Office Hour:
– 2-3pm, Tuesday
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TA’s Information
• Ms. HE Yihua
– Email: yyanaz@connect.ust.hk
– Room 5568
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Course Description
• This course is designed to provide some fundamental
concepts, theories and procedures for the study of
facility location, process and material flow analysis,
physical layouts, computerized layout planning, and
warehouse operations.
• Lecture notes are uploaded to canvas
(http://canvas.ust.hk).
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Textbook
— Tompkins, J.A., White, J.A., Bozer,
Y.A., Tanchoco, M.A. (2010).
Facilities Planning (4th Ed). Hoboken,
NJ: John Wiley and Sons, Inc.
— We will move around the text
according to the tentative course plan
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Grading Criteria
• Homework + Lab reports
15%
(No late homework is accepted. Please submit through canvas)
•
•
•
•
Project
Participation (small Quiz)
Mid-Term Exam (23 Mar. 2023)
Final Exam
15%
5%
25%
40%
• Both mid-term and final exams are closed book and
closed notes
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Course Requirements
• Lab
– 1:30 – 2:20pm, Room 3207
– 14, 21, 28 Feb., 7 Mar., 4 &18 April 2023 (6 lab sessions,
the schedule is subject to change at the instructor’s
discretion)
– Lab reports due at the end of the lab. Late reports are not
accepted.
• Project
– Find a layout that can be improved in your daily life and
redesign it
– Grouping due (3-4 members): 2 Mar. 2023
– Presentation dates: 2, 4 & 9 May 2023
– Final report & PowerPoint due: 9 May 2023
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Course Outline
1.
2.
3.
4.
5.
6.
7.
Introduction to Facilities Planning
Facility Location Models
Machine Layout and Group Technology
Flow and Activity Relationship Analysis
Layout Design
Warehouse Operations and Warehouse Layout
Product, Process, and Schedule Design
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IEDA 4200 Design of Logistics and Manufacturing Systems
Introduction to
Facilities Planning
IEDA4200, Xuan QIU (HKUST)
What is a “Facility”?
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Facilities
• Facilities:
– Fixed assets like building structures and inanimate resources
that support the operations of a given activity
– Facilities put together with humans, $, and/or materials,
energy result in the activity
• Facilities are used to…
–
–
–
–
Hold finished products and ship to customers (DC)
Manufacture products (manufacturing plant)
Display and sell products to customers (retail)
Provide healthcare services
• Clinic
• Hospital
• Vaccination center
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Facilities Planning
• Facilities Planning involves
– determination of how an activity’s tangible fixed assets best
support achieving the activity’s objectives.
• Disciplines involved:
– Civil engineering; electrical/mechanical engineering;
architectural; real estate; urban planning; industrial engineering
• Industrial engineers focus on requirements, resource
allocation, and efficient use of resources
– Space requirements
– Personnel requirements
– System design/layout
– Movement within a facility
– Movement between facilities……
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Applications of Facilities Planning
• Facilities planning can be applied to planning of
– A new hospital
– An assembly department
– An existing warehouse
– The baggage department in an airport
– Academic buildings in universities
– A production plant
– A retail store
– A dormitory
– A bank
– An office
– A cinema
– A parking lot
– Or any portion of these activities etc…
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Why Plan Facilities?
•
•
•
•
•
•
•
Expanding production, based on increased demand
Entering a new field
Introduction of new products/services
Replacing an obsolete or inadequate facility
Reallocating or consolidating production facilities
Improving service to market(s)
Changes in other resources (e.g. labor, subcontracted
companies, political / environmental environment)
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Significance of Facilities Planning
• Cost of design changes during a project
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Significance of Facilities Planning
• Large investment is involved.
– Majority of an organization’s capital investment is in facilities
– 8% of GNP spent annually of facilities
• Large impact on production cost
– 20-50% of the total operating cost of a finish product is
material handling cost.
– Better designs of products and material handling systems can
reduce at least 10-30% of the total material handling cost.
• Safety and health
– Eliminate or minimize possible hazardous conditions
– Influence worker morale
• Energy and environment concern
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Facilities Planning Objectives
• Improve customer satisfaction (e.g. maximize speed
for quick customer response)
• Maximize inventory turnover
• Reduce costs (e.g. transportation cost, inventory
carrying cost, packaging cost…)
• Effectively utilize people, equipment, space, and
energy
• Be adaptable and promote ease of maintenance
• Provide employee safety, job satisfaction, energy
efficiency, and environmental responsibility
• Assure sustainability and resilience
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Facilities Planning Hierarchy
Facilities Planning
Facilities
Location
Facilities
Design
Facility
System
Design
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Layout
Design
Material
Handling System
Design
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Facilities Planning in Different Sectors
Manufacturing
facilities
planning
Plant location
Plant facility system
Plant design
Plant layout
Material handling
Office facilities
planning
Office location
Office facility system
Office design
Office layout
Information handling
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Facilities Planning in Different Sectors
Hospital
facilities
planning
Emergency
facilities
planning
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Hospital
location
Hospital
design
Emergency
room location
Emergency
room design
Hospital facility system
Hospital layout
Patient handling
Personnel handling
Public handling
Information handling
Material handling
Emergency facility system
Emergency room layout
Patient handling
Personnel handling
Information handling
Material handling
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Facility Location
• The placement of the facilities with respect to customers,
suppliers, other facilities, and etc.
• Different levels of facility location decisions
Site decisions
Country decisions
Region decisions
What factors have to be considered in making facility location
decisions?
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Facility Location
• Questions to be answered:
– How many facilities to
locate?
– Where to locate?
– How should demand be
allocated to the facilities?
China Mainland
New Territories
Tai Po
Yuen Long
Tuen Mun
Central city area
Tsuan Wan
Sha Tin
5
Chek Lap Kok
Tsing
Yi
4
3
Kowloon 0
2
1
Tsing-Ma
Bridge
Lantau Island
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Hong Kong Island
0
1
2
3
4
5
Kai Tak airport
Kwun Tong
Kowloon Bay
Tokwawan
Cheung Sha Wan
Kwai Chung
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Facility Systems Design
• Facility systems:
– structural systems, enclosure systems, atmospheric systems,
electrical and lighting systems, communication system, life
safety systems, sanitation system……
• Objectives:
– Understand of various systems elements within the facility
– Overview of how the systems elements impact the overall
process of facilities planning
• What systems are required?
• Where they are required?
• Integrating the system into the overall facility
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Facility Layout Design
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Facility Layout Design
• The layout problem is to arrange physical spaces
required for several departments in a given space
provided for the departments
Department name
1. Receiving
2. Milling
3. Press
4. Screw m/c
5. Assembly
6. Plating
7. Shipping
Dept
1
2
3
4
5
6
7
1
-
2
45
20
5
Size (ft2)
12,000
8,000
6,000
12,000
8,000
12,000
12,000
Flow
3
4
5
15 25 10
30 25
5
- 35
25
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5
15
10
7
65
-
35
65
-
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Material Handling System
• Material handling
– Art and science of moving, sorting, protecting, controlling
material
– Moving the right amount of material, in the right condition,
space, position, sequence, cost, methods
• Material handling represent 15-70% of the total cost of
a manufactured product.
• In a typical factory, material handling accounts for
– 25% of the workforce
– 55% of the factory space
– 87% of the production time
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Material Handling System
• Material handling activities
– Transportation, receiving, storage, retrieval, packaging and
shipping, postal system, personnel transit system.
• Goals of material handling:
– Reduce unit costs of production
– Maintain or improve product quality, reduce damages, and
provide for protection of materials
– Promote safety and improve working conditions
– Promote productivity
– Control inventory
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Material Handling System Equation
• Materials + Moves + Methods = Preferred system
necessary
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Facility Planning Process
• Facilities planning as
continuous activity
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Facilities Planning Process
• Comparison of the engineering design process and
facilities planning process
Phase
Engineering Design Process
Facilities Planning Process
I
Define problem
Define or redefine objective of the
facility
Specify primary and support activities
II
Analyze the problem
Determine the inter-relationship
Determine space requirements
III
Generate alternatives
Generate alternative facilities plan
Evaluate the alternatives
Evaluate alternative facilities plan.
Select the preferred design
Select a facilities plan
Implement the design
Implement the plan
Maintain and adopt the facilities plan
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Redefine the objective of the facility
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Integration of Facilities Planning Process
• All the company’s functions must support the strategic
plan for entire organization
• Facilities planning is highly affected by other functions:
Sourcing
How?
Product development
and design
Human resources
Inventory control
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A Case Study
• Sam Walton (1918-1992) opened the first Wal-Mart
general store in Arkansas, USA in 1963.
• It is now the largest retail company in the world. It has
10,593 stores globally in 2022.
• Ranking in Fortune Magazine Global 500: 1
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Number of stores globally
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A Case Study
• As of January 2020, there were in total 438 retail units
and 26 wholesale stores covering more than 180 cities
in mainland China
• ButSpace-constraint
Wal-Mart has no store in Hong Kong. Why?
=> Local ppl prefer freshness (frequent replenish, rather than once-off big purchase)
• If Wal-Mart decides to open a store in Hong Kong,
what decisions do they need to make?
Location: Proximity to transportation nodes (container port, custom, airport) & Accessibility to local ppl (Large stores = rural, CBD = small stores)
Operation: Streamline their shelf options, limited space with max. profitability => local consumer behavioural analysis
Meat, Offers special/rare cuts in small packages, which is not commonly seen in market
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