Chapter 7: Capacity and Facilities
 Capacity Planning
 Basic Layouts
 Designing Process Layouts
 Designing Service Layouts
 Designing Product Layouts
 Hybrid Layouts
Copyright 2009, John Wiley & Sons, Inc.
7-1
Capacity
 Maximum capability to produce
 Capacity planning

establishes overall level of productive
resources for a firm
 3 basic strategies for timing of capacity
expansion in relation to steady growth in
demand (lead, lag, and average)
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7-2
Capacity Expansion Strategies
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7-3
Capacity (cont.)
 Capacity increase depends on



volume and certainty of anticipated demand
strategic objectives
costs of expansion and operation
 Best operating level

% of capacity utilization that minimizes unit costs
 Capacity cushion

% of capacity held in reserve for unexpected
occurrences
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7-4
Economies of Scale
 it costs less per unit to produce high levels of
output




fixed costs can be spread over a larger number of
units
production or operating costs do not increase
linearly with output levels
quantity discounts are available for material
purchases
operating efficiency increases as workers gain
experience
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7-5
Best Operating Level for a Hotel
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7-6
Facility Layout
Arrangement of areas within a facility to:








Minimize material-handling costs
Utilize space efficiently
Utilize labor efficiently
Increase capacity
Facilitate communication and interaction
Incorporate safety and security measures
Provide flexibility to adapt to changing conditions
Increase quality
Copyright 2009, John Wiley & Sons, Inc.
7-7
BASIC LAYOUTS
 Process layouts

group similar activities together
according to process or function they
perform
 Product layouts

arrange activities in line according to
sequence of operations for a particular
product or service
 Fixed-position layouts

are used for projects in which product
cannot be moved
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7-8
Process Layout in Services
Women’s
lingerie
Shoes
Housewares
Women’s
dresses
Cosmetics
and jewelry
Children’s
department
Women’s
sportswear
Entry and
display area
Men’s
department
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7-9
Manufacturing Process Layout
Lathe Department
L
L
L
L
L
L
L
L
L
L
Milling
Department
Drilling Department
M
M
D
D
D
D
M
M
D
D
D
D
G
G
G
P
G
G
G
P
Grinding
Department
Receiving and
Shipping
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Painting Department
A
A
A
Assembly
7-10
A Product Layout
In
Out
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7-11
Comparison of Product
and Process Layouts
Product
 Description
 Type of process
Process
 Sequential
arrangement of
activities
 Continuous, mass
production, mainly
assembly
 Product

 Demand
 Volume
 Equipment



 Functional
grouping of
activities
 Intermittent, job
shop, batch
production, mainly
fabrication
Standardized, made  Varied, made to
to stock
order
Stable
 Fluctuating
High
 Low
Special purpose
 General purpose
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7-12
Comparison of Product
and Process Layouts
Product
 Workers
 Inventory
 Limited skills
 Low in-process, high
finished goods
 Storage space
 Small
 Material handling  Fixed path (conveyor)
 Aisles
 Narrow
 Scheduling
 Part of balancing
 Layout decision
 Line balancing
 Goal
 Equalize work at each
station
 Advantage
 Efficiency
Copyright 2009, John Wiley & Sons, Inc.
Process
 Varied skills
 High in-process, low
finished goods
 Large
 Variable path (forklift)
 Wide
 Dynamic
 Machine location
 Minimize material
handling cost
 Flexibility
7-13
Fixed-Position Layouts
 Typical of projects
 Equipment, workers,
materials, other
resources brought to the
site
 Highly skilled labor
 Often low fixed cost
 Typically high variable
costs
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7-14
Designing Process Layouts
 Goal: minimize material handling costs
 Block Diagramming
 minimize nonadjacent loads
 use when quantitative data is available
 Relationship Diagramming
 based on location preference between areas
 use when quantitative data is not available
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7-15
Computerized layout
Solutions
 CRAFT

Computerized Relative Allocation of Facilities
Technique
 CORELAP

Computerized Relationship Layout Planning
 PROMODEL and EXTEND


visual feedback
allow user to quickly test a variety of scenarios
 Three-D modeling and CAD


integrated layout analysis
available in VisFactory and similar software
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7-16
Designing Service
Layouts
 Must be both attractive and functional
 Types
 Free flow layouts


Grid layouts


encourage browsing, increase impulse purchasing, are flexible
and visually appealing
encourage customer familiarity, are low cost, easy to clean and
secure, and good for repeat customers
Loop and Spine layouts

both increase customer sightlines and exposure to products,
while encouraging customer to circulate through the entire
store
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7-17
Types of Store Layouts
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7-18
Designing Product
Layouts
 Objective

Balance the assembly line
 Line balancing

tries to equalize the amount of work at each
workstation
 Precedence requirements

physical restrictions on the order in which operations
are performed
 Cycle time

maximum amount of time a product is allowed to
spend at each workstation
Copyright 2009, John Wiley & Sons, Inc.
7-19
Desired Cycle Time, Cd
Cd =
Cd =
production time available
desired units of output
(8 hours x 60 minutes / hour)
(120 units)
Cd =
Copyright 2009, John Wiley & Sons, Inc.
480
120
= 4 minutes
7-20
Flow Time vs Cycle Time
 Cycle time = max time spent at any station
 Flow time = time to complete all stations
1
2
3
4 minutes
4 minutes
4 minutes
Flow time = 4 + 4 + 4 = 12 minutes
Cycle time = max (4, 4, 4) = 4 minutes
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7-21
Efficiency of Line
Efficiency
Minimum number
of workstations
i
t
i
t
i
i=1
E = nC
a
N=
i
i=1
Cd
where
ti
j
n
Ca
Cd
= completion time for element i
= number of work elements
= actual number of workstations
= actual cycle time
= desired cycle time
Copyright 2009, John Wiley & Sons, Inc.
7-22
Line Balancing Rules
 Use heuristics to assign tasks to
workstations
 Longest processing time (LPT) rule
(Pick the feasible task with the LPT)
 Most number of following tasks rule
(Pick the feasible task with the
largest number of following tasks)
 Ranked positional weight rule
Copyright 2009, John Wiley & Sons, Inc.
7-23
Designing Product Layouts –
con’t
Step 1: Identify tasks & immediate predecessors
Step 2: Determine output rate
Step 3: Determine cycle time
Step 4: Compute the Theoretical Minimum number of
Stations
Step 5: Assign tasks to workstations (balance the
line)
Step 6: Compute efficiency, idle time & balance delay
Copyright 2009, John Wiley & Sons, Inc.
7-24
Step 1: Identify Tasks &
Immediate Predecessors
Example 10.4 Vicki's Pizzeria and the Precedence Diagram
Immediate
Task Time
Work Element Task Description
Predecessor
(seconds
A
B
C
D
E
F
G
H
I
Roll dough
Place on cardboard backing
Sprinkle cheese
Spread Sauce
Add pepperoni
Add sausage
Add mushrooms
Shrinkwrap pizza
Pack in box
Copyright 2009, John Wiley & Sons, Inc.
None
A
B
C
D
D
D
E,F,G
H
Total task time
50
5
25
15
12
10
15
18
15
165
7-25
Layout Calculations
 Step 2: Determine output rate

Vicki needs to produce 60 pizzas per hour
 Step 3: Determine cycle time
 The amount of time each workstation is allowed to
complete its tasks
C ycl eti m e(se c./u n i)t

avai l abl eti m ese c./day
60 m i n /h rx 60 se c/m i n

 60 se c./u n i t
de si re dou tpu tu n i ts/h r
60 u n i ts/h r
Limited by the bottleneck task (the longest task in a
process):
Maximum output 
available time
3600 sec./hr.

 72 units/hr, or pizzas per hour
bottleneck task time
50 sec./unit
Copyright 2009, John Wiley & Sons, Inc.
7-26
Layout Calculations (continued)
 Step 4: Compute the theoretical minimum
number of stations

TM = number of stations needed to achieve
100% efficiency (every second is used)
TM 


 tasktime s 
cycletime
165 se conds
 2.75, or 3 stations
60 se c/statio
n
Always round up (no partial workstations)
Serves as a lower bound for our analysis
Copyright 2009, John Wiley & Sons, Inc.
7-27
Layout Calculations (continued)
 Step 5: Assign tasks to workstations



Start at the first station & choose the longest eligible task following
precedence relationships
Continue adding the longest eligible task that fits without going over the
desired cycle time
When no additional tasks can be added within the desired cycle time, begin
assigning tasks to the next workstation until finished
Workstation
1
2
3
Eligible task
A
B
C
D
E, F, G
E, F
F
H
I
Copyright 2009, John Wiley & Sons, Inc.
Task Selected
A
B
C
D
G
E
F
H
I
Task time
50
5
25
15
15
12
10
18
15
Idle time
10
5
35
20
5
48
38
20
5
7-28
Layout Calculations (Continued)
 Step 6: Compute efficiency and balance delay
 Efficiency (%) is the ratio of total productive time
divided by total time
Efficie ncy(%) 

t 
NC
165se c.
100  91.7%
3 stationsx 60 se c.
Balance delay (%) is the amount by which the line
falls short of 100%
Balancede lay 100% 91.7% 8.3%
Copyright 2009, John Wiley & Sons, Inc.
7-29
Hybrids Layouts
 Cellular layouts

group dissimilar machines into work centers
(called cells) that process families of parts with
similar shapes or processing requirements
 Flexible manufacturing system

automated machining and material handling
systems which can produce an enormous variety
of items
 Mixed-model assembly line

processes more than one product model in one
line
Copyright 2009, John Wiley & Sons, Inc.
7-30
Cellular Layouts
1. Identify families of parts with similar
flow paths
2. Group machines into cells based on
part families
3. Arrange cells so material movement
is minimized
4. Locate large shared machines at
point of use
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7-31
Parts Families
A family of
similar parts
Copyright 2009, John Wiley & Sons, Inc.
A family of related
grocery items
7-32
Original Process Layout
Assembly
4
6
7
8
5
2
A
B
12
10
3
1
9
C
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11
Raw materials
7-33
Part Routing Matrix
Parts
1
2
A
B
C
D
E
F
G
H
x
x
3
Machines
4 5 6 7
8 9 10 11 12
x
x
x
x
x
x
x
x
x
x
x
x
x
x x
x
x
x
x
x
x
x
x
x
x
x
x
x
Figure 5.8
Copyright 2009, John Wiley & Sons, Inc.
7-34
Revised Cellular Layout
Assembly
8
10
9
12
11
4
Cell 1
Cell 2
6
Cell 3
7
2
1
3
5
A C B
Raw materials
Copyright 2009, John Wiley & Sons, Inc.
7-35
Reordered Routing Matrix
Parts
1
2
4
Machines
8 10 3 6
A
D
F
C
G
B
H
E
x
x
x
x
x
x
x
x
x x
x x
x
Copyright 2009, John Wiley & Sons, Inc.
x
x
x
x
9 5
x
x
x
x
7 11 12
x
x
x
x
x
x
x
x
x
7-36
Direction of part movement within cell
A Manufacturing Cell
with Worker Paths
HM
Source: J.T. Black, “Cellular Manufacturing
Systems Reduce Setup Time, Make Small Lot
Production Economical.” Industrial
Engineering (November 1983).
VM
Worker 3
VM
L
Paths of three
workers moving
within cell
Worker 2
Material
movement
L
Key:
S
L
HM
VM
G
G
Final
inspection
= Saw
= Lathe
= Horizontal milling machine
= Vertical milling machine
= Grinder
Copyright 2009, John Wiley & Sons, Inc.
S
Worker 1
In
Finished
part
Out
7-37
Automated Manufacturing Cell
Source: J. T. Black, “Cellular
Manufacturing Systems Reduce Setup
Time, Make Small Lot
Production Economical.” Industrial
Engineering (November 1983)
Copyright 2009, John Wiley & Sons, Inc.
7-38
Advantages and Disadvantages
of Cellular Layouts
 Advantages






Reduced material
handling and transit time
Reduced setup time
Reduced work-inprocess inventory
Better use of human
resources
Easier to control
Easier to automate
Copyright 2009, John Wiley & Sons, Inc.
 Disadvantages




Inadequate part families
Poorly balanced cells
Expanded training and
scheduling
of workers
Increased capital
investment
7-39
Flexible Manufacturing
Systems (FMS)
 FMS consists of numerous programmable
machine tools connected by an automated
material handling system and controlled by
a common computer network
 FMS combines flexibility with efficiency
 FMS layouts differ based on



variety of parts that the system can process
size of parts processed
average processing time required for part
completion
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7-40
Full-Blown FMS
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7-41
Mixed Model
Assembly Lines
 Produce multiple models in any order
on one assembly line
 Issues in mixed model lines




Line balancing
U-shaped line
Flexible workforce
Model sequencing
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7-42
Balancing U-Shaped Lines
Precedence diagram:
A
Cycle time = 12 min
B
C
D
E
(a) Balanced for a straight line
A,B
C,D
E
9 min
12 min
3 min
Efficiency =
(b) Balanced for a U-shaped line
A,B
24
24
=
= .6666 = 66.7 %
3(12)
36
C,D
E
Efficiency =
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24
24
=
= 100 % 12 min
2(12)
24
12 min
7-43