Chapter 8. Infrastructure: Technology and
Facilities
Outline
Technology
Services and Manufacturing
Technology Decision Making
Break Even Analysis
Facilities Decision Making
Facility Location and Facility Layout
Ergonomic Issues
Facility Design - Systematic Layout Planning
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Technology
Dominates products and processes.
Used in services and manufacturing
Services
Share/analyze information: EDI, Decision Making Systems
Internet based commerce
Manufacturing
CAD/CAM, Automated Guided Vehicles
Scheduling and Capacity Planning Systems
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Technology Decision Making
Advantages of new technology
Cost reduction: Labor, Material, quality
Increased Flexibility: manage customer inputs, simplify
customization
Higher Quality: better features, more process control
Increased delivery and development speed: CAD and internet
Risks of new technology
Customers or employees reject new technology
Technology obsolescence
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Technology Decision Making - Break even analysis
A tool to support selection of technology alternatives
Determine payoff line for each alternative
Pi (W) = (Ri – VCi) x W – Fi
Where
Pi (W) = Profit for alternative i given a demand W.
Ri = Revenue generated per item for alternative i.
VCi = Variable cost per item for alternative i.
Fi = Fixed cost for alternative i.
W = Number of items.
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Facility Decision Making
Two types: facility location and facility layout
Facility Location decisions: multiple factors are considered:
Proximity to customers
Labor/Skill availability
Proximity to key suppliers, to existing facilities, to ports and
airports
Taxes and incentives, Political stability
Factor Rating Method: simple tool to help decision making
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Facility Decision Making
Facility Layout Decisions
Three types of layouts: Product, Process, and Cellular
Product
Layout follows the process required by a single (or very
few) product(s)
Receiving Welding
Circuit Board
Assembly
Testing
Cable
Assembly
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General
Assembly
Cable
Assembly
Shipping
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Facility Decision Making - Layouts
Process
Layout is organized by functional areas.
Used for multiple products that require different flows
Welding
Testing
Receiving
Circuit Board
Assembly
Product X
Cable
Assembly
General
Assembly
Shipping
Product Y
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Facility Decision Making - Layouts
Cellular
Layout is organized by product families.
Objective: combine the advantages of the process and product
layouts
Circuit Board
Welding
Family 1
Assembly
Testing
Receiving
Cable
Assembly
Family 3
Cable
Assembly
Family 2
General
Assembly
General
Assembly
Welding
Shipping
Testing
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Ergonomic Issues of Facility DM
 Work area dimensions (space, location of
the equipment)
Study of the interaction
 Force requirements (easy to move, weight
between humans and
of material that must be moved)
machines/equipment/tools
 Noise (limit communication, hearing
damage)
 Lighting (vision fatigue)
 Displays (easy to read/understand)
 Controls (location, complexity)
 Speed of work (stress)
Ergonomics:
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Facilities Decision Making: Systematic Layout Planning
A Process to develop process
layouts
1. Determine the functional groups
2. Determine the relationships between
areas
3. Create a relationship diagram
Letter Code
A
E
I
U
X
4. Create a layout without dimensions
5. Create a layout with dimensions
6. Score the layout
7. Go back to steps 4-6 and try to create
a new layout with a higher score
Meaning
Absolutely Necessary
Especially necessary
Important
Unimportant
Undesired
MAN 3504 - Chapter 8
Weight
16
8
4
0
-100
Line Code
10