Introduction to Facility Planning

1
Introduction to Facility Planning
2
Competitive Global Marketplace
Todays world is much more competitive than the
world in which our parents and grandparents
worked. Open-market countries depend heavily
upon imported manufactured goods.
3
Competitive Global Marketplace Example
All components assembled in USA . . . Then
shipped to China for assembly into gas grills
which are then shipped back to the USA for retail
sale!
4
Market Driven Competitiveness
Survival of the fittest!
Every morning in Africa, a gazelle wakes up. It
knows it must run faster than the fastest lion or
it will be killed. Every morning a lion wakes
up. It knows it must outrun the slowest gazelle
or it will starve to death. It doesnt matter
whether you are a lion or a gazellewhen the sun
comes up, you had better be running.
5
Competitive Business Challenges
What makes some companies products seem to have
a cost advantage over others?

• Better manufacturing processes
• Desire to continuously improve
• Streamlined plant layout

6
Cycle Time
One of the most noteworthy accomplishments in
keeping the price of Ford products low is the
gradual shortening of the production cycle. The
longer an article is in the process of
manufacture and the more it is moved about, the
greater is its ultimate cost. Henry Ford, 1926
7
Cycle Time
One factor contributing to this lengthy
production cycle is the facility layout.
Manufacturing facilities design and material
handling affect the productivity and
profitability of a company more than almost any
other corporate decision.
8
Brief History of Plant Layout

• Companies of the past utilized a draftsperson to
  complete the plant layout.
• The general belief was that there was a void of
  expertise in facility layout design.
• Problems could be overcome with an extra
  forklift or conveyor length.

9
Plant Layout
Ship
QC
Rec
Raw Stock
QC
Screw Machine
Shear
Stamp
Drill
Lathe
Assembly
Brake
Mill
Weld
Grind
Finish
Parts Stock
10
Impact of Poor Plant Layout

• High material handling costs
• Cycle and lead time delays
• High WIP inventories
• Lower quality
• Product damage
• Safety and morale problems
• Poor equipment utilization
• Congested aisles
• Wasted floor space

11
How Can We Improve?
Lean Manufacturing and Cellular Flow
Before
6 Assemblers Batch Assembly C/T 4.5 days
12
How Can We Improve?
Lean Manufacturing and Cellular Flow
After
6 Assemblers Flow / Pull C/T 53 minutes
13
Facility Improvement Pitfalls

• Poorly planned layout
• Lack of employee involvement
• Lack of management commitment
• Budgetary constraints leading to a piecemeal
  approach
• Focus on the almighty ROI versus the future of
  the business
• Short term management focus

14
Facilities Planning Definition

• Analysis
• Concept
• Design
• Implementation
• ? For producing of products and services

15
Manufacturing Savings
Where can we save costs in manufacturing?

• Reduce or Eliminate-
• Work-in-process inventories (WIP)
• Non-value added activities
• Material handling costs
• Processing time
• Product defects

16
Manufacturing Savings
The largest components of factory labor and the
cost of materials purchased and used in a factory
are

• Internal transportation costs
• Material handling costs
• Storage costs

This includes both our manufacturing plants and
those of our suppliers!
17
Facilities Layout Goals

• Goals should include
• Minimize unit cost. Minimize project cost.
• Optimize quality.
• Promote the effective use of (a) people, (b)
  space, (c) equipment, and (d) energy.
• Provide for (a) employee convenience, (b)
  employee safety, and (c) employee comfort.
• Control project cost.
• Achieve the production start date.
• Build flexibility into the plan.
• Reduce or eliminate excessive inventory.
• Achieve miscellaneous goals.

18
Five Types of Facility Design Projects

1. New Facility fewer restrictions and
   constraints on the layout since it is new
2. New Product integration of a new product into
   the existing process and layout
3. Design Changes incorporate the impact of
   design changes into the manufacturing process
4. Cost Reduction redesign the existing layout to
   facilitate cost reduction programs and ideas
5. Retrofit similar to a new facility layout
   except with the constraints present

19
Continuous Improvement Doctrine (CID)
The continuous improvement doctrine (CID)
mandates that a company will commit to
continuous, ongoing improvement plans for
production processes, materials handling, and
plant layout. They further recognize that these
items are essential to achieve competitive
advantage. The CID plan will be developed and
maintained on an ongoing basis.
1