Facility Planning

1
Facility Planning

• Definition and Objectives
• Engineering Design Process
• Important Factors to Evaluate Facility Plans
• Evaluation of Alternative Facility Plans
• - Pairwise Comparison Technique - Factor
  Analysis Technique
• - Prioritization Matrix
• Material Handling Checklist
• Principles of Material Handling
• Objectives of Facility Layout
• Traditional Facility Layout Procedures
• - Naddlers Ideal System Approach - Immers
  Basic Steps
• - Apples Plant Layout Procedure - Reeds Plant
  Layout Procedure
• - Muthers Systematic Layout Planning
• Information Gathering
• - Information about Product - Information about
  Process
• - Information about Schedule

2
Definition of Facility Planning

• Facility Planning determines how an activitys
  tangible fixed assets best support achieving the
  activitys objectives.
• Examples
• a. In manufacturing, the objective is to support
  production.
• b. In an airport, the objective is to support the
  passenger airplane interface.
• c. In a hospital, the objective is to provide
  medical care to patients.

3
Hierarchy of Facility Planning
Handling System Design

• Location is the placement of a facility with
  respect to customers, suppliers, and other
  facilities with which it interfaces.
• Structure consists of the building and services
  (e.g., gas, water, power, heat, light, air,
  sewage).
• Layout consists of all equipment, machinery, and
  furnishings within the structure.
• Handling System consists of the mechanism by
  which all interactions required by the layout are
  satisfied (e.g., materials, personnel,
  information, and equipment handling systems).

4
Significance of Facility Planning

• 1. Since 1955, approximately 8 of the gross
  national product (GNP) is spent in new facilities
  in the U.S.
• 2. It is estimated that 20 to 50 of operating
  costs within manufacturing are attributed to
  material handling. It is generally agreed that
  effective facilities planning can reduce
  material handling costs by 10 to 30 .

5
Strategic Facilities Planning Issues

• 1. Number, location, and sizes of warehouses
  and/or distribution centers.
• 2. Centralized versus decentralized storage
  supplies, raw materials, work-in-process, and
  finished goods for single- and multi-building
  sites, as well as single- and multi-site
  companies.
• 3. Acquisition of existing facilities versus
  design of model factories and distribution
  centers of the future.
• 4. Flexibility required because of market and
  technological uncertainties.
• 5. Interface between storage and manufacturing.
• 6. Level of vertical integration, including
  "subcontract versus manufacture" decisions.
• 7. Control systems, including materials control
  and equipment control.
• 8. Movement of materials between buildings,
  between sites.
• 9. Changes in customers' and suppliers'
  technology as well as firm's own manufacturing
  technology and materials handling, storage, and
  control technology.
• 10. Design-to-cost goals for facilities.

6
Facility Planning Objectives

• 1. Support the organization's mission through
  improved material handling, materials control,
  and good housekeeping.
• 2. Effectively utilize people, equipment, space,
  and energy.
• 3. Minimize capital investment.
• 4. Be flexible and promote ease of maintenance.
• 5. Provide for employee safety and job
  satisfaction.

7
Engineering Design Process

• Typically, design problems do not have
  well-defined, unique, optimum solutions. We are
  interested in obtaining a satisfactory solution.
• General Procedure for Solving Engineering Design
  Problems
• 1. Formulate the problem.
• 2. Analyze the problem.
• 3. Search for alternative solutions.
• 4. Evaluate the design alternatives.
• 5. Select the preferred design.
• 6. Implement the design.

8
Application of the Engineering Design Process to
Facility Planning

• 1. Define (or redefine) the objective of the
  facility
• Specify quantitatively the products to be
  produced or service to be provided.
• 2. Specify the primary and support activities to
  be performed in accomplishing the objective
• Requirements for primary activities include
  operations, equipment, personnel, and material
  flows.
• 3. Determine the interrelationships among all
  activities
• Both qualitative and quantitative relationships
  should be defined.
• 4. Determine the space requirements for all
  activities
• These are determined considering the equipment,
  materials, and personnel requirements.
• 5. Generate alternative facility plans
• Including alternative facility locations and
  alternative designs for the facility.
• 6. Evaluate alternative facility plans
• Determine the important factors (see list of
  factors). For each candidate plan, evaluate if
  and how those factors will affect the facility
  and its operations.

9
Application of the Engineering Design Process to
Facility Planning (cont.)

• 7. Select a facility plan
• Cost may not be the only major consideration.
• Use the information in step 6 to determine a
  plan (pairwise comparison is a good ranking
  procedure).
• 8. Implement the facility plan
• Considerable amount of planning must precede the
  construction of a facility or the layout of an
  area.
• 9. Maintain and adapt the facility plan
• The facility plan must be modified as new
  requirements are placed, e.g., new energy saving
  measures, changes in product design may require
  different flow pattern or handling equipment,
  etc.
• 10. Redefine the objective of the facility
• Similar to step 1.
• Changes in product design and/or quantities may
  require changes into the layout plan.

10
Important Factors to Evaluate Facility Plans

• In developing well-thought facilities design
  alternatives it is important to look into issues
  such as
• a) Layout characteristics
• - total distance traveled
• - manufacturing floor visibility
• - overall aesthetics of the layout
• - ease of adding future business
• b) Material handling requirements
• - use for the current material handling
  equipment
• - investment requirements on new equipment
• - space and people requirements

11
Important Factors to Evaluate Facility Plans
(cont.)

• c) Unit load implied
• - impact on WIP levels
• - space requirements
• - impact on material handling equipment
• d) Storage strategies
• - space and people requirements
• - impact on material handling equipment
• - human factors risks
• e) Overall building impact
• - estimated cost of the alternatives
• - opportunities for new business

12
Pairwise Comparison Technique

• It is a good ranking procedure. All combinations
  of two candidate plans are ranked for each
  factor.
• If n number of candidate plans, and m number
  of factors, the total number of comparison is
  m?n?(n-1)/2.
• It is a good procedure in testing for
  inconsistencies, e.g.,
• A gt B, B gt C, and C gt A.
• If there are not inconsistencies and, for
  example, four candidate plans (A, B, C, and D),
  the pairwise comparison may produce the following
  results
• A lt B B lt C C gt D
• A lt C B gt D
• A gt D
• Next, a factor analysis technique can be used to
  determine the facility plan, i.e., assign a
  weight to each factor, and compute the total
  weight for each candidate plan.

13
Factor Analysis Technique

• The facility plan scoring method is a very
  popular, subjective-decision making tool that is
  relatively easy to use. It consists of these
  steps
• Step 1. List all factors that are important -
  that have an impact on the facility plan
  decision.
• Step 2. Assign an appropriate weight (typically
  between 0 and 1) to each factor based on the
  relative importance of each.
• Step 3. Assign a score (typically between 0 and
  100) to each facility plan with respect to
  each factor identified in Step 1.
• Step 4. Compute the weighted score for each
  factor for each facility plan by multiplying
  its weight by the corresponding score.
• Step 5. Compute the sum of the weighted scores
  for each facility plan and choose a facility
  plan based on these scores.

14
Example 1

• A payroll processing company has recently won
  several major contracts in the Midwest region of
  the United States and Central Canada and wants to
  open a new, large facility to serve these areas.
  Because customer service is so important, the
  company wants to be as near its customers as
  possible. A preliminary investigation has shown
  that Minneapolis, Winnipeg, and Springfield,
  Illinois are the three most desirable locations,
  and the payroll company has to select one of
  these. A subsequent thorough investigation of
  each location with respect to eight important
  factors generated the raw scores and weights.
  Using the location scoring method, determine the
  best location for the new payroll processing
  facility.

15
Example 1 (cont.)
Factors and weights for three locations
Score
Weight 0.25 0.15 0.15 0.10 0.10 0.10 0.08 0.07
Factor Proximity to customer Land and
construction prices Wage rates Property
taxes Business taxes Commercial travel Insurance
costs Office services
Minneapolis 95 60 70 70 80 80 70 90
Winnipeg 90 60 45 90 90 65 95 90
Springfield 65 90 60 70 85 75 60 80
16
Example 1 Solution
Weighted scores for three locations
Weighted Score
Factor Proximity to customer Land and
construction prices Wage rates Property
taxes Business taxes Commercial travel Insurance
costs Office services Sum of weighted scores
Minneapolis 23.75 9.00 10.50 7.00 8.00 8.00 5.60 6
.30 78.15
Winnipeg 22.50 9.00 6.75 9.00 9.00 6.50 7.60 6.30
76.65
Springfield 16.25 13.50 9.00 7.00 8.50 7.50 4.80 5
.60 72.15
17
Prioritization Matrix

• The prioritization matrix can be used to judge
  the relative importance of each criterion as
  compared to each other. Table 1 represents the
  prioritization of the criteria for the facilities
  design example. The criteria are labeled to help
  in building a table with weights
• A. Total distance traveled G. Space
  requirements
• B. Manufacturing floor visibility H. People
  requirements
• C. Overall aesthetics of the layout I. Impact
  on WIP levels
• D. Ease of adding future business J. Human
  factor risks
• E. Use of material handling equipment K.
  Estimated cost of alternative
• F. Investment in new material handling equipment
• The weights typically used to compare the
  importance of each pair of criteria are
• 1 equally important
• 5 significantly more important 1/5
  significantly less important
• 10 extremely more important 1/10 extremely
  less important

18
Prioritization Matrix (cont.)

• Note that the values in cells (i, j) and (j, i)
  are reciprocals. The resulting relative
  importance is presented in the last column in
  parenthesis. The most important criterion for
  facilities design selection is the impact on WIP
  levels (weight 18.3), followed by the estimated
  cost of the solution (weight 13.5).
• This same methodology can be employed to compare
  all facilities design alternatives in each
  weighted criterion. For example, suppose five
  layout alternatives are generated namely, P, Q,.
  R, S, and T. Table 2 represents the ranking of
  the layout alternatives based on the impact of
  WIP levels criterion.
• If we construct a similar table for the remaining
  ten criteria, we will be able to evaluate each
  layout alternative in the eleven criteria to
  identify the best layout. The format of this
  final table is presented in Table 3. The last
  column is computed as in Tables 1 and 2. The row
  totals (represented by ?) are added to obtain the
  grand total, after which the percentages (P, ,
  T) are determined. These percentages tell us the
  relative goodness of each layout alternative.
  These results should be presented to plant
  management to facilitate final decisions
  regarding the layout.

19
Table 1 Prioritization Matrix for the Evaluation
of Facilities Design Alternatives
20
Table 2 Prioritization of Layout Alternatives
Based on WIP Levels
21
Table 3 Ranking of Layouts by All Criteria
22
Material Handling Checklist

• Is the material handling equipment more than 10
  years old?
• Do you use a wide variety of makes and models
  which require a high spare parts inventory?
• Are equipment breakdowns the result of poor
  preventive maintenance?
• Do the lift trucks go too far for servicing?
• Are there excessive employee accidents due to
  manual handling of materials?
• Are materials weighing more than 50 pounds
  handled manually?
• Are there many handling tasks that require 2 or
  more employees?
• Are skilled employees wasting time handling
  materials?
• Does material become congested at any point?
• Is production work delayed due to poorly
  scheduled delivery and removal of materials?
• Is high storage space being wasted?
• Are high demurrage charges experienced?

23
Material Handling Checklist (cont.)

• Is material being damaged during handling?
• Do shop trucks operate empty more than 20 of the
  time?
• Does the plant have an excessive number of
  rehandling points?
• Is power equipment used on jobs that could be
  handled by gravity?
• Are too many pieces of equipment being used
  because their scope of activity is continued?
• Are many handling operations unnecessary?
• Are single pieces being handled where unit loads
  could be used?
• Are floors and ramps dirty and in need of repair?
• Is handling equipment being overloaded?
• Is there unnecessary transfer of material from
  one container to another?
• Are inadequate storage areas hampering efficient
  scheduling of movement?
• Is it difficult to analyze the system because
  there is no detailed flow chart?
• Are indirect labor costs too high?

24
Questions to be Resolved in Developing a Material
Handling Plan

• 1. Should automated storage/retrieval systems
  (AR/RS), computer controlled narrow aisle trucks,
  manually operated trucks, or some combination be
  used for palletized storage/retrieval?
• 2. Should miniloads, automated carousels,
  manually operated carousels, operator aboard
  storage/retrieval machines, or come combination
  be used for storage/retrieval of small parts?
• 3. Should automated guided vehicles, tow lines,
  pallet conveyors, tractor-trailer trains, pallet
  trucks, or some combination be used to deliver
  loads to/from palletized storage?
• 4. Should fixed path, variable paths, or some
  combination be used for material handling
  to/from/within manufacturing?
• 5. Should centralized or distributed storage of
  work-in-process be used? How should it be stored,
  moved, protected, and controlled?

25
Questions to be Resolved in Developing a Material
Handling Plan (cont.)

• 6. Should transporter-conveyors, light duty
  roller conveyors, or carts be used to transport
  kits and parts to/from assembly stations? Should
  kitting be performed at all? If so, what issue
  quantities should be used?
• 7. Should modular workstations, modular handling
  systems, and/or modular storage units be used in
  manufacturing and assembly?
• 8. Should real-time inventory control be used to
  shop floor control and storage of raw
  material/work-in-process/finished goods? What
  data entry technology is appropriate?
• 9. Should block stacking, deep-lane storage,
  mobile rack, double-deep rack, drive-in/drive-thro
  ugh rack, selective rack, or some combination be
  used for pallet storage?
• 10. Should automatic loading/unloading of
  trailers be planned for receiving and shipping?
  If so, when, where, and for what materials?

26
Top 10 Principles of Material Handling

• Principle 1. Planning Principle
• All material handling should be the result of a
  deliberate plan where the needs, performance
  objectives and functional specification of the
  proposed methods are completely defined at the
  outset. The plan should be developed in
  consultation between the planner(s) and all who
  will use and benefit from the equipment to be
  employed.
• Principle 2. Standardization Principle
• Material handling methods, equipment, controls
  and software should be standar-dized within the
  limits of achieving overall performance
  objectives and without sacrificing needed
  flexibility, modularity, and throughput.
  Standardization means less variety and
  customization in the methods and equipment
  employed.
• Principle 3. Work Principle
• Material handling work should be minimized
  without sacrificing productivity or the level of
  service required of the operation.

27
Top 10 Principles of Material Handling (cont.)

• Principle 4. Ergonomic Principle
• Human capabilities and limitations must be
  recognized and respected in the design of
  material handling tasks and equipment to ensure
  safe and effective operations. Ergonomics is the
  science that seeks to adapt work or working
  conditions to suit the abilities of the worker.
• Principle 5. Unit Load Principle
• Unit loads shall be appropriately sized and
  configured in a way which achieves the material
  flow and inventory objectives at each stage in
  the supply chain. A unit load is one that can be
  stored or moved as a single entity at one time,
  such as pallet, container or tote, regardless of
  the number of individual items that make up the
  load.
• Principle 6. Space Utilization Principle
• Effective and efficient use must be made of all
  available space. Space in material handling is
  three dimensional and therefore is counted as
  cubic space.

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Top 10 Principles of Material Handling (cont.)

• Principle 7. System Principle
• Material movement and storage activities should
  be fully integrated to form a coordinated,
  operational system that spans receiving,
  inspection, storage, production, assembly,
  packaging, unitizing, order selection, shipping,
  transportation and the handling of returns.
• Principle 8. Automation Principle
• Material handling operations should be
  mechanized and/or automated where feasible to
  improve operational efficiency, increase
  responsiveness, improve consistency and
  predictability, decrease operating costs, and
  eliminate repetitive or potentially unsafe manual
  labor.
• Principle 9. Environmental Principle
• Environmental impact and energy consumption
  should be considered as criteria when designing
  or selecting alternative equipment and material
  handling systems.

29
Top 10 Principles of Material Handling (cont.)

• Principle 10. Life Cycle Cost Principle
• A thorough economic analysis should account for
  the entire life cycle of all material handling
  equipment and resulting system. Life cycle costs
  include all cash flows that occur between the
  time the first dollar is spent to plan or procure
  a new piece of equipment, or to put in place a
  new method, until that method and/or equipment is
  totally replaced. Life cycle costs include
  capital investment, installation, setup and
  equipment programming, training, system testing
  and acceptance, operating (labor, utilities,
  etc.), maintenance and repair, reuse value, and
  ultimate disposal.

30
Facility Layout

• A Layout problem may be to
• determine the location for a new machine,
• develop a new layout for an existing production
  plant,
• develop a layout for a new production plant,
• etc.
• A Layout problem may arises due to
• changes in the design of a product,
• addition or deletion of a product,
• change in the demand of a product,
• changes in the design of the process,
• addition or deletion of a process,
• replacement of equipment,
• etc.

31
Objectives of Facility Layout

• Minimize investment in equipment.
• Minimize production time.
• Minimize material handling cost.
• Maximize utilization of space.
• Maintain flexibility of arrangement and
  operation.
• Provide safety and comfort to employees.

32
Sequential Approach vs Integrated Approach
Sequential Approach
33
Sequential Approach vs Integrated Approach
Concurrent Engineering Terms of product, process,
scheduling and facility design planners work with
marketing, purchasing, etc. Personnel address the
design process in an integrated way.
Integrated Approach Impressive results in cost,
quality, productivity, sales, customer
satisfaction, delivery time, inventory levels,
space handling requirements, building size, etc.
34
Facility Layout Procedures

• Naddlers Ideal System Approach (1961)
• Immers Basic Steps (1950)
• Apples Plant Layout Procedure (1977)
• Reeds Plant Layout Procedure (1961)
• Muthers Systematic Layout Planning (1961)

35
Naddlers Ideal System Approach

• The ideal system approach is based on the
  following hierarchical approach toward design
• 1. Aim for the theoretical ideal system.
• 2. Conceptualize the ultimate ideal
• system.
• 3. Design the technologically workable
• ideal system.
• 4. Install the recommended system.

36
Immers Basic Steps

• Immer described the analysis of a layout problem
  as follows This analysis should be composed of
  three simple steps, which can be applied to any
  type of layout problem. These steps are
• 1. Put the problem on the paper.
• 2. Show lines of flow.
• 3. Convert flow lines to machine lines.

37
Apples Plant Layout Procedure

• Apple recommended that the following detailed
  sequence of steps be used in designing a plant
  layout.
• 1. Procure the basic data. 11. Determine
  storage requirements
• 2. Analyze the basic data. 12. Plan
  service and auxiliary activities.
• 3. Design the productive process. 13.
  Determine space requirements.
• 4. Plan the material flow pattern. 14.
  Allocate activities to total space.
• 5. Consider the general material handling plan.
  15. Consider building type
• 6. Calculate equipment requirements. 16.
  Consider master layouts.
• 7. Plan individual work stations. 17.
  Evaluate, adjust and check the layout.
• 8. Select specific material handling equipment.
  18. Obtain approval.
• 9. Coordinate groups of related operations.
  19. Install the layout.
• 10. Design activity relationships. 20.
  Follow up on implementation of the layout.

38
Reeds Plant Layout Procedure

• In planning for and preparing the layout, Reed
  recommended that the following steps be taken in
  his systematic plan of attach
• 1. Analyze the product to be produced.
• 2. Determine the process required to manufacture
  the product.
• 3. Prepare layout planning charts.
• 4. Determine work stations.
• 5. Analyze storage area requirements.
• 6. Establish minimum aisle widths.
• 7. Establish office requirements.
• 8. Consider personnel facilities and services.
• 9. Survey plant services.
• 10. Provide for future expansion.

39
Systematic Layout Planning Procedure (Muther 1961)
40
Information Gathering

• Information about product, process and schedule
  is required.
• The major effect of product design decisions is
  felt by the process designer, i.e., the material
  used to make a part will influence processing
  decisions.
• Design for automation programs have been
  developed that consider the impact of the design
  of the product on the assembly process. Their
  primary thrusts are (1) dimensional reduction,
  (2) parts elimination, and (3) parts
  standardization.For (1), the cost of assembly is
  reduced if it occurs in a single dimension. The
  complexity of programming a robot increases
  geometrically with the number of assembly
  dimensions.For (2), if more complex parts can be
  produced, the number of parts can be reduced.
• Schedule design decisions tell us how much to
  produce and when to produce. From the market
  forecast, the production demand is determined and
  decisions about the production rate are made.

41
Information Gathering

• Information about product
• - Photographs about the product
• - Exploded drawings
• - Engineering drawings of individual parts
• - Parts list
• - Bill of materials (structure of product)
• - Assembly chart

42
Gate Valve
43
Exploded Drawing of the Gate Valve
44
Engineering Drawing of the Gate Valve
Provide part specifications and dimensions in
sufficient detail for manufacturing
45
Parts List of the Gate Valve
The parts list provides a listing of the
component parts of a product. In addition to make
or buy decisions, a parts list includes part
number, part name, number of parts per product,
and drawing references
46
Bill of Materials for the Gate Valve
Bill of materials is also referred to as a
structured parts list since it includes all of
the information typically included in the parts
list, as well as information concerning the
structure of the product.
47
Assembly Chart I It is an analog model of the
assembly process. Circles with a single link
denote basic components, circles with several
links denote assembly operations/subassemblies,
and squares represent inspection operations.
48
Assembly Chart II
49
Information Gathering

• Information about process
• - Route sheet (equipment and operation times)
• - Precedence Diagram (prerequisite assembly
  steps before new
• assembly step)
• - Operation process chart (processing
  operations, assembly
• operations, and inspections)

50
Route Sheet for one Component of the Gate Valve
Route sheet summarizes whether a part will be
purchased or produced, how the production of a
part will be achieved, what equipment will be
used, and how long it take to perform each
operation.
51
Precedence Diagram for Assembling the Gate Valve
A precedence diagram establishes the prerequisite
assembly steps that must be completed before
performing a given assembly step.
52
Operations Process Chart By superimposing the
route sheets and the assembly chart, a chart
results that gives an overview of the flow within
the facility. This chart is the operations
process chart.
53
Information Gathering

• Information about schedule
• - Production rate
• - Product mix
• - Market forecast (it is better to work with
  tomorrows data than
• todays data)
• - Gantt charts

54
Gantt Project Planning Chart
Gantt project planning chart indicates the weekly
operation schedule, the estimated amount of time
a particular operation will take, and the actual
amount of time that the particular operation has
taken. The following chart shows that the project
is 1 week behind schedule.
55
Schedule Design

• Schedule design decisions tell us how much to
  produce and when to produce.
• Production schedules can be given in Gantt charts.