Operations Management Layout Strategy

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Operations ManagementLayout Strategy
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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

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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

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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

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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

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Office Layout

• Design positions people, equipment, offices for
  maximum people and information flow, comfort and
  safety
• Relationship chart used
• Examples
• Banks
• Software company

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Office Layout Floor Plan
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Retail/Service Layout

• Design maximizes product exposure to customers
• Decision variables
• Store flow pattern
• Allocation of (shelf) space to products

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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

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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

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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

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Fixed-Position Layout

• Design is for stationary project
• Workers and equipment come to site
• Complicating factors
• Limited space at site
• House, shipyard etc.

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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

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Emergency Room Layout
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Product-Oriented Layout

• Facility organized around product
• Design minimizes line imbalance
• Delay between work stations
• Types Fabrication line assembly line

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Steps in Developing a Process-Oriented Layout

• 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

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Cost of Process-Oriented Layout
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Interdepartmental Flow of Parts
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Interdepartmental Flow Graph Showing Number of
Weekly Loads
100
3
1
2
50
30
20
100
50
20
10
6
5
4
50
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Possible Layout 1
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Interdepartmental Flow Graph Showing Number of
Weekly Loads
30
2
3
221
1
100
50
100
20
50
20
10
6
5
4
50
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Possible Layout 3
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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

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Assembly Line BalancingThe 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

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Assembly Line Balancing Steps

• 1. Determine tasks (operations)
• 2. Determine sequence
• 3. Draw precedence diagram
• 4. Estimate task times
• 5. Calculate cycle time
• 6. Calculate number of work stations
• 7. Assign tasks
• 8. Calculate efficiency

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Precedence Diagram Example
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Assembly Line Balancing Equations
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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 time480/4012 minutes per unit
• Min no. of workstations66/125.5 or 6

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Six Station Solution