Process Selection and Facility Layout
• Process selection:
– The importance
– Basic processing types
• Facility layout:
– The basic layout types
– Their advantages and disadvantages
– Line-balancing problems
• Reading: 226-264
Sept 22
ISMT162/ Weixin Shang
1
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 more than 4000 stores globally.
• Revenue in 2005:
• Ranking in Global 100:
Sept 22
ISMT162/ Weixin Shang
2
A Case Study
• "The secret of successful retailing is to give
your customers what they want. And really, if
you think about it from your point of view as a
customer, you want everything: a wide
assortment of good-quality merchandise; the
lowest possible prices; guaranteed satisfaction
with what you buy; friendly, knowledgeable
service; convenient hours; free parking; a
pleasant shopping experience."
- Sam Walton (1918-1992)
Sept 22
ISMT162/ Weixin Shang
3
A Case Study
• Wal-Mart currently has 46 stores in 17 provinces
of China. It has 11 stores in Shenzhen. It plans
to open another 42 new stores in China this
year.
• But Wal-Mart has no store in Hong Kong. Why?
• If Wal-Mart decides to open a store in Hong
Kong, what decisions do they need to make?
Sept 22
ISMT162/ Weixin Shang
4
What Is This?
Sept 22
ISMT162/ Weixin Shang
5
A Layout Design for a Supermarket
Sept 22
ISMT162/ Weixin Shang
6
Importance of Facilities Planning
• Large investment is involved.
– In a developed country, on average, about 10% of the gross
national product (GNP) is invested on new facilities.
– In China, it is even more.
• Large proportion in 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.
• Interactions with production/service management
•
– A well-designed facility is easier to manage.
– Expandability is very important.
Safety and health
Sept 22
ISMT162/ Weixin Shang
7
Introduction
• Process selection
– Deciding on the way production of goods or services
will be organized
• Major implications
– Capacity planning
– Layout of facilities
– Equipment
– Design of work systems
Sept 22
ISMT162/ Weixin Shang
8
Process Selection and System Design
Figure 6.1
Forecasting
Capacity
Planning
Product and
Service Design
Technological
Change
Sept 22
Facilities and
Equipment
Layout
Process
Selection
ISMT162/ Weixin Shang
Work
Design
9
Process Strategy
• Key aspects of process strategy
Sept 22
–
Capital intensive – equipment/labor
–
Process flexibility
–
Technology
–
Adjust to changes
–
Design
–
Volume
–
technology
ISMT162/ Weixin Shang
10
Technology
• Technology: The application of scientific
discoveries to the development and
improvement of products and services and
operations processes.
• Technology innovation: The discovery and
development of new or improved products,
services, or processes for producing or providing
them.
Sept 22
ISMT162/ Weixin Shang
11
Kinds of Technology
• Operations management is primarily concerned
with three kinds of technology:
– Product and service technology
– Process technology
– Information technology
• All three have a major impact on:
– Costs
– Productivity
– Competitiveness
Sept 22
ISMT162/ Weixin Shang
12
Technology Competitive Advantage
• Innovations in
– Products and services
• Cell phones
• PDAs
• Wireless computing
– Processing technology
• Increasing productivity
• Increasing quality
• Lowering costs
Sept 22
ISMT162/ Weixin Shang
13
Technology Acquisition
• Technology can have benefits but …
• Technology risks include:
– What technology will and will not do
– Technical issues
– Economic issues
•
•
•
•
Sept 22
Initial costs, space, cash flow, maintenance
Consultants and/or skilled employees
Integration cost, time resources
Training, safety, job loss
ISMT162/ Weixin Shang
14
Process Selection
Batch
• Variety
– How much
• Flexibility
Job Shop
– What degree
Repetitive
• Volume
– Expected output
Sept 22
ISMT162/ Weixin Shang
Continuous
15
Process Types
• Job shop
– Small scale
• Batch
– Moderate volume
• Repetitive/assembly line
– High volumes of standardized goods or services
• Continuous
– Very high volumes of non-discrete goods
Sept 22
ISMT162/ Weixin Shang
16
Examples: Job Shop
• A job shop process: A midwestern hospital
medical team performs a diagnostic procedure
involving a cardiac catheterization.
Sept 22
ISMT162/ Weixin Shang
17
Examples: Batch
• A batch process: Food is prepared, one menu
item at a time, in the kitchen of the Spago
Restaurant in the Forum at Caesar’s Palace, Las
Vegas, Nevada.
Sept 22
ISMT162/ Weixin Shang
18
Examples: Repetitive
• A repetitive process: Binney & Smith, maker of Crayola
products, produces nearly 3 billion crayons each year in
its Easton, PA, manufacturing facility.
Sept 22
ISMT162/ Weixin Shang
19
Examples: Continuous
• A continuous process. An oil refinery performs a
continuous process, breaking down crude oil into
petroleum, chemicals, and many other products.
Sept 22
ISMT162/ Weixin Shang
20
Product and Service Processes
Figure 6.2
Sept 22
ISMT162/ Weixin Shang
21
Product – Process Matrix
Figure 6.2 (cont’d)
Dimension
Job Shop
Batch
Repetitive
Continuous
Job variety
Very High
Moderate
Low
Very low
Process
flexibility
Very High
Moderate
Low
Very low
Unit cost
Very High
Moderate
Low
Very low
Volume of
output
Very Low
Low
High
Very high
Sept 22
ISMT162/ Weixin Shang
22
Product and Process Profiling
• Process selection can involve substantial investment in
– Equipment
– Layout of facilities
• Product profiling: Linking key product or service
requirements to process capabilities
• Key dimensions
–
–
–
–
–
Sept 22
Range of products or services
Expected order sizes
Pricing strategies
Expected schedule changes
Order winning requirements
ISMT162/ Weixin Shang
23
Automation
• Automation: Machinery that has sensing and
control devices that enables it to operate
– Fixed automation
– Programmable automation
Sept 22
ISMT162/ Weixin Shang
24
Automation
• Computer-aided design and manufacturing
systems (CAD/CAM)
• Numerically controlled (NC) machines
• Robot
• Manufacturing cell
• Flexible manufacturing systems(FMS)
• Computer-integrated manufacturing (CIM)
Sept 22
ISMT162/ Weixin Shang
25
Facilities Layout
• Layout: the configuration of departments,
work centers, and equipment, with particular
emphasis on movement of work (customers
or materials) through the system
– Product layouts
– Process layouts
– Fixed-Position layout
– Combination layouts
Sept 22
ISMT162/ Weixin Shang
26
Objective of Layout Design
1. Facilitate attainment of product or service
quality
2. Use workers and space efficiently
3. Avoid bottlenecks
4. Minimize unnecessary material handling costs
5. Eliminate unnecessary movement of workers
or materials
6. Minimize production time or customer service
time
7. Design for safety
Sept 22
ISMT162/ Weixin Shang
27
Importance of Layout Decisions
• Requires substantial investments of money
and effort
• Involves long-term commitments
• Has significant impact on cost and
efficiency of short-term operations
Sept 22
ISMT162/ Weixin Shang
28
The Need for Layout Decisions
Inefficient operations
Changes in the design
of products or services
For Example:
High Cost
Bottlenecks
Accidents
The introduction of new
products or services
Safety hazards
Sept 22
ISMT162/ Weixin Shang
29
The Need for Layout Design
Changes in
environmental
or other legal
requirements
Changes in volume of
output or mix of
products
Morale problems
Changes in methods
and equipment
Sept 22
ISMT162/ Weixin Shang
30
Basic Layout Types
• Product layouts
• Process layouts
• Fixed-Position layout
• Combination layouts
Sept 22
ISMT162/ Weixin Shang
31
Basic Layout Types
• Product layout
–
Layout that uses standardized processing
operations to achieve smooth, rapid, high-volume
flow
• Process layout
–
Layout that can handle varied processing
requirements
• Fixed Position layout
–
Sept 22
Layout in which the product or project remains
stationary, and workers, materials, and equipment
are moved as needed
ISMT162/ Weixin Shang
32
Product Layout
Figure 6.4
Raw
materials
or customer
Material
and/or
labor
Station
1
Material
and/or
labor
Station
Station
22
Material
and/or
labor
Station
Station
33
Station
Station
44
Finished
item
Material
and/or
labor
Used for Repetitive or Continuous Processing
Sept 22
ISMT162/ Weixin Shang
33
Advantages of Product Layout
•
•
•
•
•
•
•
Sept 22
High rate of output
Low unit cost
Labor specialization
Low material handling cost
High utilization of labor and equipment
Established routing and scheduling
Routing accounting and purchasing
ISMT162/ Weixin Shang
34
Disadvantages of Product Layout
• Creates dull, repetitive jobs
• Poorly skilled workers may not maintain
equipment or quality of output
• Fairly inflexible to changes in volume
• Highly susceptible to shutdowns
• Needs preventive maintenance
• Individual incentive plans are impractical
Sept 22
ISMT162/ Weixin Shang
35
A U-Shaped Production Line
Figure 6.6
In
1
2
3
4
5
Workers
6
Out
Sept 22
10
9
8
ISMT162/ Weixin Shang
7
36
Process Layout
Process Layout
(functional)
Figure 6.7
Dept. A
Dept. C
Dept. E
Dept. B
Dept. D
Dept. F
Used for Intermittent processing
Job Shop or Batch Processes
Sept 22
ISMT162/ Weixin Shang
37
Product Layout
Product Layout
(sequential)
Figure 6.7
Work
Station 1
Work
Station 2
Work
Station 3
Used for Repetitive Processing
Repetitive or Continuous Processes
Sept 22
ISMT162/ Weixin Shang
38
Advantages of Process Layouts
• Can handle a variety of processing
requirements
• Not particularly vulnerable to equipment
failures
• Equipment used is less costly
• Possible to use individual incentive plans
Sept 22
ISMT162/ Weixin Shang
39
Disadvantages of Process Layouts
•
•
•
•
•
•
•
Sept 22
In-process inventory costs can be high
Challenging routing and scheduling
Equipment utilization rates are low
Material handling slow and inefficient
Complexities often reduce span of supervision
Special attention for each product or customer
Accounting and purchasing are more involved
ISMT162/ Weixin Shang
40
Fixed Position Layouts
• Fixed Position Layout: Layout in which the
product or project remains stationary, and
workers, materials, and equipment are moved
as needed.
• Nature of the product dictates this type of layout
– Weight
– Size
– Bulk
• Large construction projects
Sept 22
ISMT162/ Weixin Shang
41
Cellular Layouts
• Cellular Production
–
Layout in which machines are grouped into a
cell that can process items that have similar
processing requirements
• Group Technology
–
Sept 22
The grouping into part families of items with
similar design or manufacturing characteristics
ISMT162/ Weixin Shang
42
A Comparison
Sept 22
ISMT162/ Weixin Shang
43
Functional vs. Cellular Layouts
Table 6.3
Sept 22
Dimension
Functional
Cellular
Number of moves
between departments
many
few
Travel distances
longer
shorter
Travel paths
variable
fixed
Job waiting times
greater
shorter
Throughput time
higher
lower
Amount of work in
process
higher
lower
Supervision difficulty
higher
lower
Scheduling complexity
higher
lower
Equipment utilization
lower
higher
ISMT162/ Weixin Shang
44
Service Layouts
•
•
•
•
Sept 22
Warehouse and storage layouts
Retail layouts
Office layouts
Service layouts must be aesthetically
pleasing as well as functional
ISMT162/ Weixin Shang
45
Design Product Layouts: Line
Balancing
Line Balancing is the process of assigning
tasks to workstations in such a way that the
workstations have approximately
equal time requirements.
Sept 22
ISMT162/ Weixin Shang
46
Cycle Time
Cycle time is the maximum time
allowed at each workstation to
complete its set of tasks on a unit.
Sept 22
ISMT162/ Weixin Shang
47
Determine Maximum Output
Output rate =
OT
CT
OT = operating time per day
D = Desired output rate
CT = cycle time =
Sept 22
OT
D
ISMT162/ Weixin Shang
48
Determine the Minimum Number
of Workstations Required
N=
( ∑ t)
CT
∑ t = sum
Sept 22
of task time
ISMT162/ Weixin Shang
49
Precedence Diagram
Figure 6.11
Precedence diagram: Tool used in line balancing to display
elemental tasks and sequence requirements
0.1 min.
1.0 min.
a
b
c
0.7 min.
Sept 22
A Simple Precedence
Diagram
d
0.5 min.
ISMT162/ Weixin Shang
e
0.2 min.
50
Example 1: Assembly Line Balancing
• Arrange tasks shown in Figure 6.11 into
three workstations.
–
–
Sept 22
Use a cycle time of 1.0 minute (Suppose
OT=D=480 minutes)
Assign tasks in order of the most number of
followers
ISMT162/ Weixin Shang
51
Example 1 Solution
Workstation
1
Sept 22
Time
Remaining
Eligible
Assign
Task
Revised
Time
Remaining
1.0
0.9
0.2
a, c
c
none
a
c
-
0.9
0.2
2
1.0
b
b
0.0
3
1.0
0.5
0.3
d
e
-
d
e
-
0.5
0.3
ISMT162/ Weixin Shang
Station
Idle Time
0.2
0.0
0.3
0.5
52
Calculate Percent Idle Time
Idle time per cycle
Percent idle time =
(N)(CT)
Efficiency = 1 – Percent idle time
Sept 22
ISMT162/ Weixin Shang
53
Line Balancing Rules
Some Heuristic (intuitive) Rules:
• Assign tasks in order of most following
tasks.
– Count the number of tasks that follow
• Break the tie: assign tasks in order of
greatest positional weight.
–
Sept 22
Positional weight is the sum of each task’s time
and the times of all following tasks.
ISMT162/ Weixin Shang
54
Example 2
OT=480 minutes, D=400 minutes, CT=1.2
Sept 22
0.2
0.2
0.3
a
b
e
0.8
0.6
c
d
f
g
h
1.0
0.4
0.3
ISMT162/ Weixin Shang
55
Solution to Example 2
Station 1
a
b
Station 2
Station 3
e
f
c
Sept 22
Station 4
g
h
d
ISMT162/ Weixin Shang
56
Bottleneck Workstation
1 min.
30/hr.
1 min.
30/hr.
2 min.
30/hr.
1 min.
30/hr.
Bottleneck
Sept 22
ISMT162/ Weixin Shang
57
Parallel Workstations
30/hr.
1 min.
60/hr.
2 min.
30/hr.
1 min.
1 min.
60/hr.
30/hr.
2 min.
30/hr.
Parallel Workstations
Sept 22
ISMT162/ Weixin Shang
58
Designing Process Layouts
Information Requirements:
1. List of departments
2. Projection of work flows
3. Distance between locations
4. Amount of money to be invested
5. List of special considerations
6. Location of key utilities
Sept 22
ISMT162/ Weixin Shang
59
Example 3
•
Distance between locations
Sept 22
Interdepartmental work flow
ISMT162/ Weixin Shang
60
Example 3: Interdepartmental Work Flows
for Assigned Departments
Figure 6.13
30
1
A
Sept 22
170
3
B
ISMT162/ Weixin Shang
100
2
C
61
Review Problems
• Problem 1 at page 269
• Problem 2 at page 269
• Problem 7 at page 271
Sept 22
ISMT162/ Weixin Shang
62