Operations
Management
Layout Strategy
1
What is Facility Layout

Location or arrangement of everything within
& around buildings

Determines long-run efficiency of operations

Helps achieve a strategy that supports
differentiation, low cost or quick response
2
Strategic Importance of Layout
Proper layout enables:

Higher utilization of space, equipment and people

Improved flow of information, materials, or people

Improved employee morale and safer working
conditions

Improved customer/client interaction

Flexibility to change--use small, movable or modular
equipment; etc
3
Layout Strategies

Office layout

positions workers, their equipment, and
spaces/offices to provide for movement of
communication and information
 Retail/service layout

allocates shelf space and responds to customer
behavior
 Warehouse layout

addresses trade-offs between space and
material handling
4
Seven Layout Strategies

Fixed-position layout


large bulky projects such as ships and buildings
Process-oriented layout

deals with low-volume, high-variety production
(“job shop”, intermittent production)
 Product-oriented layout

seeks the best personnel and machine use in
repetitive or continuous production, line balancing
5
Office Layout
Design positions people, equipment, &
offices for maximum people and
information flow, comfort and safety
 Relationship chart used
 Examples



Banks
Software company
6
Office Layout Floor Plan
Finance
Accounting
Fin.
Manager
Acct.
Brand X
7
Retail/Service Layout
Design maximizes product exposure to
customers
 Decision variables



Store flow pattern
Allocation of (shelf) space to products
8
Retail Layouts Some Rules of Thumb
Locate high-draw items around the periphery
of the store
 Use prominent locations such as the first or last
aisle for high-impulse and high margin items
 Distribute “power items” (items that may
dominate a shopping trip) to both sides of an
aisle, and disperse them to increase the
viewing of other items
 Use end aisle locations because they have a
very high exposure rate

9
A Good Service Layout Considers

Ambient conditions - background characteristics
such as lighting, sound, smell, and temperature.

Spatial layout and functionality - which involve
customer circulation path planning

Signs, Symbols, and Artifacts - characteristics
of building design that carry significance
10
Warehouse Layout

Design balances between space utilization &
handling cost

Similar to process layout


Items moved between dock & various storage
areas
Optimum layout depends on

Variety of items stored

Number of items picked
11
Fixed-Position Layout

Design is for stationary project

Workers and equipment come to site

Complicating factors

Limited space at site

House, shipyard etc….
12
Process-Oriented Layout

Design places departments with large flows of
material or people together

Department areas having similar processes
located in close proximity


e.g., All x-ray machines in same area
Supports process-focused strategy i.e. product
differentiation stategy
13
Emergency Room Layout
Triage room
Patient A broken leg
Patient B – heart
problems
Labs
E.R. beds
Pharmacy
Billing/exit
14
Product-Oriented Layout
Facility organized around product
 Design minimizes line imbalance



Delay between work stations
Types: Fabrication line; assembly line
15
Steps in Developing a
Process-Oriented Layout
1
2
3
4
5
6
Construct a “from-to matrix”
Determine space requirements for each
department
Develop an initial schematic diagram
Determine the cost of this layout
By trial-and-error (or more sophisticated
means), try to improve the initial layout
Prepare a detailed plan that evaluates
factors in addition to transportation cost
Cost of Process-Oriented Layout
n
n
Minimize cost   X ijC ij
i 1 j1
where n  total number of work centers
or department s
i, j  individual department s
X ij  number of loads moved from
department i to department j
C ij  cost to move a load between
department i and department j
Interdepartmental Flow of Parts
1
1
2
3
4
5
6
2
3
4
5
50
6
100
0
0
20
30
50
10
0
20
0
100
50
0
0
Interdepartmental Flow Graph
Showing Number of Weekly Loads
100
1
50
2
30
3
100
10
4
50
5
6
Possible Layout 1
Room 1
Room 2
Room 2
Assembly
Printing
Machine Shop
Department
Department
Department
(1)
(2)
(3)
Receiving
Shipping
Testing
Department
Department
Department
(4)
Room 4
(5)
Room 5
60’
(6)
Room 6
40’
Interdepartmental Flow Graph
Showing Number of Weekly Loads
30
2 2
2
1
50
1
100
3
100
4
50
5
6
Possible Layout 3
Room 1
Room 2
Painting
Assembly
Machine Shop
Department
Department
Department
(2)
(1)
Room 2
(3)
Receiving
Shipping
Testing
Department
Department
Department
(4)
Room 4
(5)
Room 5
60’
(6)
Room 6
40’
Assembly Line Balancing
Analysis of production lines
 Nearly equally divides work between
workstations while meeting required output
 Objectives



Maximize efficiency
Minimize number of
work stations
Assembly Line Balancing
The General Procedure



Determine cycle time by taking the demand (or
production rate) per day and dividing it into the
productive time available per day
Calculate the theoretical minimum number of work
stations by dividing total task time by cycle time
Perform the line balance and assign specific
assembly tasks to each work station
Assembly Line Balancing Steps
1.
2.
3.
4.
5.
6.
7.
8.
Determine tasks (operations)
Determine sequence
Draw precedence diagram
Estimate task times
Calculate cycle time
Calculate number of work stations
Assign tasks
Calculate efficiency
Precedence Diagram Example
10
Min.
A
11
B
C
4
5
3
7
3
F
G
I
D
12
11
E
H
Assembly Line Balancing Equations
Production time available
Cycle time
Minimum
number of
work
stations
Efficiency
=
Demand per day
 Task times
=
=
Cycle time
 Task times
(Actual number
* (Cycle time)
of work
stations)
Cycle time calc.
On the basis of precedence diagram and
activity times given above, the firm determines
that there are 480 productive minutes of work
available per day. Furthermore, production
schedule requires that 40 units be completed
as output from the assembly line each day.
 Cycle time:480/40=12 minutes per unit
 Min no. of workstations:66/12=5.5 or 6

Six Station Solution
5
C
10
11
A
B
3
7
F
G
3
I
D
12
11
E
H