IFLV301
Layout is the physical arrangement of production machines and equipment, workstations,
people , location of materials of all kinds and stages and material handling equipment.
Material handling is defined simply as moving material,
Cost Reduction formula
Reduce takt time
optimize process
5W + 1H
Why, Who, what, where, when, how
Lean thinking & Lean Manufacturing
Andon
Automation
Kaizen
Kanban
Value stream mapping
Assembly stations
Big lot sizes in between stations, transport of lot size between stations
Production cannot be constantly 100%, adjustments must be made to account for that.
Life cycle of operation as well is factored into cost, waste of movement.
Layout of stations determine known cost for transportation beforehand.
Cell layout creates a compact arena so to speak for easy intergration cutting distance
fruther than a linear layout would
The indented bill of material
Test date - 24th March
Design layouts following a methodical and logic thought process
Analyse product and equipment requirement
Analyse space and flow requirements
Apply lean and traditional solutions to layout problems
Apply material handling selection methodologies
Apply algorithmic solutions to layout problems
Model layouts using advanced software and simulations
Apply techniques to design warehouses
Apply principles to services and other types of facilities
Calculate takt time and plant rate
Calculate scrap rate and rework rates
Construct and indented bill of material (BOM)
Discuss Make or buy decisions
Facility design depends on manufacturing department
sources of information can also entail Marketing, product design and management policy
The marketing department
• number of units required per day
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determines equipment and people needed in the layout to make space for
Plant rate = rate of machines and workstation required to meet the goal
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The marketing department is focused on what the customer needs and wants:
◦ The selling price
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Volume
Seasonality
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Replacement for old equipment
Calculating the takt time or plant rate
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Usually to meet a specified goal, equipment and workstations must work at a
determined rate
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Plant/ Takt time is the required pace that all components, processes, operations and
parts must run at in order to meet production goal
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Standard/ cycle time for all processes documented
Planned downtimes and non productive time
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Production goal
These are the three factors viewed when takt time is calculated
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Furthermore a general knowledge of :
◦ The overall plant efficiency
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determined by unplanned downtimes
inventory stock outs , absenteeism
We need to produce and ship 1,000 units of product from the plant in an 8-hour shift.
Thirty minutes for lunch, 10 minutes for break, and 8 minutes for team meetings are
allotted during each shift.
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Let us assume that the plant is operating at 90 percent efficiency (unexpected issues
that lead to lost time).
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How much time do you have to produce one unit of product?
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8 x 60 = 480 - (10 + 30 + 8) = 432
.9 x 432 = 388,8
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1000 / 388,8 = 0,3888
0,3888 x 60 = 23,33 seconds per unit
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To find how many parts will be finished under a minute at this rate = divide 1 unit per
rate
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1 / 0,3888 = 2,57 per minute
Scrap - unusable parts
Rework - a need to redo an operation simply because the part was not produced within
the desired specifications for the first time
Quality and production departments have historical data that indicate the level of rework
and scrap for each operation
Include scrap and rework rates into your takt time calculations and in the calculations for
spare or replacements parts
To find required amount of units with indicated scrap rate; you'd take into account the
actual number you'd produce
for example, if there's a 1000 units required, and there's 3% scrap rate
you'd need to = 1000 / (1 -.03) = 1,031
General formula = output / (1 - %scrap1) (1 - %scrap2) ( 1 - %scrap3)
The product design department
• Blueprints, a bill of materials, assembly drawings and model shops samples inform the
facilities designer of what needs to be accomplished - the product design is the source
of this valuable information
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Blueprints sketches, pictures, CAD and model shop samples all communicate the idea
of what the company wants to build.
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There will be drawings of each individual part of the product, assemblies and subassemblies as well as the final product.
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the parts list or bill of materials list all the parts that make up a finished product
The list includes part members, part names, the quantity of each part, what parts make
up assemblies, and may include material specifications, parts and raw material units
costs and make or buy decisions, the decision to either make or buy a part is up to top
management, not just the product engineering department but the parts list is a good
place to indicate that decision
The indented Bill of material (BOM)
Also called the multilevel BOM
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important aid in the design of the facility and configuration of the work cells and assembly
lines
An indented bill of material provides the same basic information as the parts list
However it also provides the hierarchical structure of the product by identifying each
assembly subassembly and the required or subordinate parts of each assembly or
subassembly.
The indented bill of material provides not only data regarding the composition of the final
assembly but also valuable insight into the flow of parts and components in the final
assembly
Management policy information
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Management refers to upper level employees who are responsible for the financial
performance of a company]
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Such information such as :
◦ Inventory policy and lean thinking
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Investment policy
startup schedules
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make or buy decisions
organizational relationships
◦ feasibility studies
Facility designers must understand these policies up front; otherwise, they may waste
a lot of time
Make or buy decisions
• The decision to either make or buy is up to the top management; not just the product
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engineering department, but the parts list is a good place to indicate that decision
If you are an existing company with a product line; you know what you can and what
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you cannot make
The fabrication section of your manufacturing department is always in competition
with your purchasing department because the cheapest way to provide the part to the
assembly department is the best source.
Organisational relationships
An organizational chart communicates to the facilities designer the number of employees,
therefore:
The size of areas such as:
Cafeterias
Restrooms
Office space
medical facilities
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Feasibility studies
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Many new product ideas are recommended to management
These ideas need to be evaluated before they are accepted as new manufacturing
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facilities design projects
One method used to determine whether a project idea is workable is a feasibility
study,
Activity relationship analysis
• Design layout following a methodical and logic thought process
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Analyse product and equipment requirements
Analyse space and flow requirements
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Apply Lean and traditional solutions to layout problems
Apply material handling selection methodologies
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Apply algorithmic solutions to layout problems
Model layouts using advanced software and simulations (including industry 4.0
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layouts)
Apply techniques to design warehouses
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Apply principles to services and other types of facilities
Use the ARD to determine space requirements and location relationships
Form a worksheet from the ARD
Construct a dimensionless block diagram
Draw the flow analysis on the dimensionless block diagram
Introduction
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In addition to manufacturing flow, other departments, services and facilities must be
included to establish good overall flow
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Material flows from receiving - (to stores) - (to the process) - (to warehousing )- (to
shipping)
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The techniques in this chapter will help establish the optimum placement of
everything that needs space
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The activity relationship diagram
the worksheet
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The dimensionless block diagram
The flow analysis
Activity relationship diagram (ARD)
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the activity relationship diagram also called affinity analysis diagram shows the
relationship of every department, office or service area with every other department
and area
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It answers the question: "How important is it for this department, office or service
facility to be close to another department, office or service facility?"
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Closeness codes are used to reflect the importance of each relationship.
A code - for the movement of massive amiunts of material or people between
departments. use code sparingly
E code - if doubt regarding its A code assignation- A lot of material between department
but not at the same time
I and O codes - when some level of importance is desired. do not omit these codes at least
for the first few layout designs
U codes- tell you when no activity or interface is needed between two departments. They
can be placed far from each other
X codes- as important as A codes but for the opposite reason.
List all departments in a vertical column on the lefthand side of the form
Starting with line 1 fabrication, establish the relationship code for each following
department
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Reason codes can be used to explain why a code was used
Do not overstate the relationship between work centres (use the codes mindfully)
A rule of thumb - approach states that you should not exceed the following percentages
for a given code
The remaining relationships will probably be assigned as U with the exception of X where
necessary
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The total number of relationships, N, between all possible pairs of work centers in any
facility can be determined as follows: N = n(n-1)/2
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Where n = number of departments or work centers in the facility. E.g. for a facility with
25 different departments or work centers: N = 25(25 -1)/2
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The facilities planner in this case should have no more than 15 A relationship codes
(300 × 5 percent = 15). Similarly, the number of E and I codes should not exceed 30
and 45, respectively.
Worksheet
The worksheet is an interim step between the ARD and the dimensionless block diagram
Although it is not necessary, it serves as a summary of the ARD and makes drawing the
dimensionless block diagram easier
Step by Step procedure for the worksheet
• List all the activities down the left hand side of a sheet of paper.
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make six columns to the right of the activity column for A,E,I,O,U,X
Taking one activity at a time, list the activity number under the proper relationship
code.
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Dimensionless
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block diagram
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The dimensionless diagram is the first layout attempt and the result of the activity
relationship diagram and the worksheet
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Even the layout is dimensionless, it will be the basis for the master layout and plot
plan
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If you obey the actvity codes, a good layout will result
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Step-by-step procedure for a dimensionless block diagram:
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Cut up a sheet of paper into about 5cm x 5cm. (In this example, 14 squares are
needed.)
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Place an activity number in the center of each square (1 to 14 in this example).
Taking one square at a time, make a template for that activity by placing the
relationship codes in the following positions (figure 6-3).
◦ A relationship in the top left corner
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E relationship in the top right corner
I relationship in the bottom left corner
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O relationships in the bottom right corner
U relationships omitted
◦ X relationships in the center under the activity number
Each activity center is represented by one square (figure 6-4).
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Once the 14 templates are ready, place them in the arrangement that will satisfy as
many activity/ relationship codes as possible.
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Start with the activity with the most important closeness codes. E.g. in figure 6-2,
activities 1 and 4 have 2 A and 2 E codes. Start with either one of these activities.
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Place the template you chose in the middle of your desk.
◦ All As should have a full side touching.
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All Es should have at least a corner touching.
No X relationship should be touching.
Give:
◦ 2 checkmarks for As that are not touching at all, or for Xs touching with a full side;
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1 checkmark for As with only a corner touching, with an X touching a corner, or
with an E not touching at least one corner.
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Try to accommodate all the A, E, and X codes.
The fewer checkmarks, the better. In this example, 6-4 gets 1 checkmark, and 4-6
gets 1 checkmark.
Flow analysis
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Flow analysis is now shown on the dimensionless block diagram
Starting with receiving, show the movement of material - (to stores) - (to fabrication) (to welding) - (to paint) - (to assembly and pack-out) -(to the warehouse) - (to
shipping)
Auxiliary services Requirement space
Manufacturing departments need support services, and these services need space
Activity centers that require a lot of space are:
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Receiving and shipping
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Storage
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Warehousing
Maintenance and tool room
• Utilities, heating and air conditioning.
Receiving and shipping
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separate departments
similar equipment and space requirements
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receiving department - start of material flow
shipping department - end of the material flow
Advantages of centralised shipping and receiving
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Common equipment
Common personnel
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Improve space utilization
Reduced facility cost (fewer outside construction costs)
Disadvantages of centralised shipping and receiving
Space congestion and material flow
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Material flow is more efficient if the material could flow straight through the plant:
receiving on one side of the plant and shipping on the other side
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Multiple receiving locations is also a possibility
The most cost-efficient method is the correct choice
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Base your decision on balancing the advantages and the disadvantages.
Functions of a receiving department
• Assisting in locating a trailer at the receiving dock door
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Assisting in the unloading of a material
Recording the reciept of the number of containers
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Opening, separating, inspecting and counting the material being received
Preparing average, shortage or damage reports as needed
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Developing a receiving report
Sending raw material to raw material stores or straight to production if needed
Facilities required for a receiving department
• Dock doors
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Dock plates, dock levelers and dock boards
Aisles
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Outside areas
Offices
Space requirements for a shipping department
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space for shipping must always include packaging, staging, aisles, trailer parking,
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roadways and offices; sometimes, lounges for truckers and restrooms are included.
The overall weight of the shipment will help you visualize the size of daily shipments
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Operations can be enhanced and the reduction of human error by using automatic
identification and data capture technology and bar codes (AIDC).
Storage
Stores is an area used to set aside raw materials, parts and supplies. There are many
different types
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Raw material stores
Janitorial stores
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Finished goods stores
Office supplies/parts stores
Your primary interest will be in raw material stores, but the same procedure can be used in
calculating space for other stores
The space requirements is dependent on the stated inventory policy
for example
• Provide an area to store one week supply of A items, 2 weeks of B items and one
month supply of C items
A items are those parts that account for 80 percent of the inventory value. Usually 20% of
the part makes up 80% of the dollar value.
Classifying the inventory and keeping less of the high value items will result in a lower
inventory carrying costs
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The less inventory you carry, the lower the costs
Carrying costs measures the cost of carrying inventory. A 25% percent carrying cost is
normal and includes
◦ The cost of maintaining the inventory of raw material
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the space for storing, heating, cooling and lighting the material
The costs of taxes, insurance, damage, obsolescence and so on.
Just in time inventory allows you
• Adjust or eliminate receiving, receiving reports
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Eliminate incoming quality control checks
Eliminate or greatly reduce stores area requirements
The goal of any stores department should be:
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maximize use of the cubic space
provide immediate access to everything
• provide for the safekeeping of the inventory including damage and count control
Maximising the use of cubic space
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requires the use of racks and shelves and minimizing aisle space and empty space.
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This brings up the number-one design criterion for a storeroom:
◦ Leave room to store only half the required inventory
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To explain the criterion, we need the inventory graph
Inventory graph (figure 8-8) terms include:
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Units on hand
Days
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Order quantity
Normal usage
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Minimum usage
Maximum usage
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Normal distribution between minimum usage rate and maximum usage rate
Safety stock
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Reorder points
Reorder time
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Stepped usage
Providing immediate access to everything
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the second design criterion for stores layout with random locations
Put anything anywhere but keep track of it
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A location system is required to keep track of what you put there. A simple locator
system would be to letter each aisle. Number each pallet location
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Each location in the storeroom now has a location code. The storekeeper is asked to
put a pallet load of 1,500 part number 1750-1220 parts away. The driver drives to the
first open spot and deposits the pallet. Then the storekeepers make out a location
ticket such as that shown in figure 8-12. Two copies are needed: one copy is attached
to the pallet and one copy is kept at the stores’ control desk in part number order.
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Production now needs some of part number 1750-1220. The request comes to the
inventory control desk. The storekeeper looks up part number 1750-1220 in the card
file, finds the pallet with the closest quantity to that requested or the oldest ticket, and
goes to that location to retrieve the goods. The ticket can be pulled and sent to data
processing to reduce the inventory. The inventory control department had previously
added this inventory from a receiving report.
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Storage facilities requirements
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Every part must be measured for cubic size, multiplied by the number of parts to be
stored and converted to cubic feet.
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Calculating storeroom size starts with an analysis of storage space needs as follows
◦ List all raw materials and buyout parts
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After each part; list the length, width, height and cubic inches of each part
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List the quantity stated in the inventory policy divided by 2
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Calculate the cubic feet required
Determine the number of storage units required for each part
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Determine if parts will be stored on a shelf, pallet or the floor
Aisle feet:
The concept of aisle feet is very useful. Aisle feet will help determine the space needed.
For example: visualise one shelf (example figure 8-11).
One shelving unit is 3 feet wide. You must place this open 3 feet on the aisle; therefore,
one shelf has a need for 3 aisle feet. You need 200 shelves with 3 aisle feet each, so 600
aisle feet will be required.
Another way of thinking about this is if you assemble 200 shelving units and place them
side by side, they would stretch out to be 600 feet long.
A 600-foot row is too long, but how about two 300-foot rows or ten 60-foot rows?
Providing safekeeping
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a good storage system will ensure inventory will remain a valuable asset
proper storage equipment like racks, shelves and trucks protects products
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keeps it away from dust and grime
unauthorized removal of inventory should not be allowed
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inventory records must reflect real time state of inventory
security checkpoint are important parts of a storeroom design
Warehousing
• A warehouse is the storage of finished products
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A warehouse can be a department or an entire building
The warehousing building is where the company send finished products , they could
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be outside warehouses as well
manufacturing plants send finished products to activate the service called distribution
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the primary purpose of a warehouse is to safeguard the products
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stores = raw materials and supplies ; warehouse = finished goods
after assembly and packout; it is kept there till it's ready to ship out to customers
Warehouse design criteria:
Warehousing is the storage, order filing and preparation for shipping of products
Order filing is the most labour intensive portion of the job and affects the layout the most
Two design elements are important to a warehouse layout
• Fixed location
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This means every product must be assigned a fixed location to the warehouse so a
person can find that product quickly; To increase productivity, the most popular
items should be placed in the most convenient location
Small amount of everything
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as a direct result of the first criterion; by putting a small amount of everything in a
fixed location; a warehouse operator can pass all products within a few feet travel
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To find more convenient location for popular and profitable items . this analysis is
called ABC inventory analysis
Functions of a warehouse:
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To safekeep the finished product
To maintain some stock of every product sold by the company
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To prepare customer orders for shipment
ABC inventory analysis:
• Uses the 80/20 rule or Pareto analysis.
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80 percent of sales (in currency) comes from 20 percent of the products.
To maximize efficiency, you want to identify those products that account for most
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of the sales.
This rule divides inventory into three categories:
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Class; Percentage of money; Percentage of parts
Procedure for sales analysis of ABC inventory:
1. List all products with their unit price and average monthly/annual demand (sales).
2. Multiply the price times the average monthly demand.
3. List the product in order of the most monthly sales dollars first and the least monthly
sales dollars last.
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4. Add up all the monthly sales (total sales).
5. Run a cumulative column after the total monthly sales, then add all the previous totals
to each line.
Warehouse space determination
• The size of the finished or packaged product multiplied by the quantity manufactured
each day times the number of days' supply will equal the cubic footage of warehouses
space required
Warehousing equipment
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A mezzanine, a form of balcony, can be built over a shelving area for additional
shelves. Slower moving inventory can be stored upstairs to make good use of an
otherwise poorly used space.
Two-wheeled hand carts are often used to stock shelves. Boxes of material may be
brought to the warehouse department by fork truck, but the aisles are not big enough
to allow fork trucks, therefore hand carts are used.
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Picking carts are four-wheeled shelf carts that are pushed around the shelves to pick
customers’ orders. The carts are unloaded as the packer fills cartons to ship to the
customers.
Racks are used for larger products. The spacing between shelves can be as large or
small as needed. Two or three high is all that can be stacked because of packing
height restrictions.
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Flow racks allow for many parts to be warehoused in a small location.
The main design criteria for warehousing are:
1. Allow a small fixed location for everything.
2. Divide the inventory into ABC classifications.
3. Locate the A items closest to shipping in the most convenient location.
4. Calculate the storage space required for each item in the warehouse and multiply the
unit cubic foot by the number of days supply. Examples:
5. Calculate the total number of shelves.
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6. Determine aisle size.
a. One-way aisles should be 3 to 4 feet depending on the size of material.
b. Two-way aisles should be one foot wider than two pieces of material handling
equipment. An 18-inch picking cart would require a 4-foot aisle.
7. Lay out the shelves and the aisles and determine the warehouse width and length.
8. Maximize the warehouse cubic space. Mezzanines and racks can best use overhead
space.
Maintenance and tool room
• The maintenance and tool room function is to provide and maintain production
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tooling
Sizing the maintenance and tool room is dependent on management's desire to do it
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in-house or to contract out all or part of these jobs.
A tool room is made up of machines and an assembly area similar to production
Utilities, heating and air conditioning
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Heat, air conditioning, electrical panels, air compressors, etc. must be considered when
determining space.
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These areas also must be kept separate from the normal traffic—electrical panels
should be fenced off, heaters must be kept clean, and air compressors require special
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construction because they are noisy.
Once these facilities have been identified, they are sized and placed in an appropriate
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area of the plant.
Many times they can be placed out of the way (on the roof or in the trusses) so that
they do not interfere with material flow.
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