Long-Range Capacity Planning and Facility Location

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Chapter 5, Part B

• Facility Layout
• Manufacturing and Services

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Overview

• Facility Layout
• Manufacturing Facility Layouts
• Analyzing Manufacturing Facility Layouts
• Service Facility Layouts
• Wrap-Up What World-Class Companies Do

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Facility Layout

• Facility layout means planning
• for the location of all machines, utilities,
  employee workstations, customer service areas,
  material storage areas, aisles, restrooms,
  lunchrooms, internal walls, offices, and computer
  rooms
• for the flow patterns of materials and people
  around, into, and within buildings

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Locate All Areas In and Around Buildings

• Equipment
• Work stations
• Material storage
• Rest/break areas
• Utilities
• Eating areas
• Aisles
• Offices

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Characteristics of the Facility Layout Decision

• Location of these various areas impacts the flow
  through the system.
• The layout can affect productivity and costs
  generated by the system.
• Layout alternatives are limited by
• the amount and type of space required for the
  various areas
• the amount and type of space available
• the operations strategy
• . . . more

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Characteristics of the Facility Layout Decision

• Layout decisions tend to be
• Infrequent
• Expensive to implement
• Studied and evaluated extensively
• Long-term commitments

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Manufacturing Facility Layouts
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Materials Handling

• The central focus of most manufacturing layouts
  is to minimize the cost of processing,
  transporting, and storing materials throughout
  the production system.
• Materials used in manufacturing include
• Raw material
• Purchased components
• Work-in-progress
• Finished goods
• Packaging material
• Maintenance, repair, and operating supplies

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Materials Handling

• A materials-handling system is the entire network
  of transportation that
• Receives material
• Stores material in inventories
• Moves material between processing points
• Deposits the finished products into vehicles for
  delivery to customers

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Materials Handling

• Material-Handling Principles
• Move directly (no zigzagging/backtracking)
• Minimize human effort required
• Move heavy/bulky items the shortest distances
• Minimize number of times same item is moved
• MH systems should be flexible
• Mobile equipment should carry full loads

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Materials Handling

• Material-Handling Equipment
• Automatic transfer devices
• Containers/pallets/hand carts
• Conveyors
• Cranes
• Elevators
• Pipelines
• Turntables
• AGVS

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Basic Layout Forms

• Process
• Product
• Cellular
• Fixed-Position
• Hybrid

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Process (Job Shop) Layouts

• Equipment that perform similar processes are
  grouped together
• Used when the operations system must handle a
  wide variety of products in relatively small
  volumes (i.e., flexibility is necessary)

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Characteristics of Process Layouts

• General-purpose equipment is used
• Changeover is rapid
• Material flow is intermittent
• Material handling equipment is flexible
• Operators are highly skilled
• . . . more

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Characteristics of Process Layouts

• Technical supervision is required
• Planning, scheduling and controlling functions
  are challenging
• Production time is relatively long
• In-process inventory is relatively high

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Product (Assembly Line) Layouts

• Operations are arranged in the sequence required
  to make the product
• Used when the operations system must handle a
  narrow variety of products in relatively high
  volumes
• Operations and personnel are dedicated to
  producing one or a small number of products

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Characteristics of Product Layouts

• Special-purpose equipment are used
• Changeover is expensive and lengthy
• Material flow approaches continuous
• Material handling equipment is fixed
• Operators need not be as skilled
• . . . more

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Characteristics of Product Layouts

• Little direct supervision is required
• Planning, scheduling and controlling functions
  are relatively straight-forward
• Production time for a unit is relatively short
• In-process inventory is relatively low

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Cellular Manufacturing Layouts

• Operations required to produce a particular
  family (group) of parts are arranged in the
  sequence required to make that family
• Used when the operations system must handle a
  moderate variety of products in moderate volumes

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Characteristics of Cellular ManufacturingRelative
to Process Layouts

• Equipment can be less general-purpose
• Material handling costs are reduced
• Training periods for operators are shortened
• In-process inventory is lower
• Parts can be made faster and shipped more quickly

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Characteristics of Cellular ManufacturingRelative
to Product Layouts

• Equipment can be less special-purpose
• Changeovers are simplified
• Production is easier to automate

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Fixed-Position Layouts

• Product remains in a fixed position, and the
  personnel, material and equipment come to it
• Used when the product is very bulky, large, heavy
  or fragile

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Hybrid Layouts

• Actually, most manufacturing facilities use a
  combination of layout types.
• An example of a hybrid layout is where
  departments are arranged according to the types
  of processes but the products flow through on a
  product layout.

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New Trends in Manufacturing Layouts

• Designed for quality
• Designed for flexibility - to quickly shift to
  different product models or to different
  production rates
• Cellular layout within larger process layouts
• Automated material handling
• U-shaped production lines
• . . . more

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New Trends in Manufacturing Layouts

• More open work areas with fewer walls,
  partitions, or other obstacles
• Smaller and more compact factory layouts
• Less space provided for storage of inventories
  throughout the layout

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Planning Manufacturing Facility Layouts

• Two Categories of Software Tools
• Computer aided design (CAD)
• Allows 3-D, full-color views of facility design
• Allows virtual walk-throughs
• Ex. ArchiCAD, AutoSketch, AutoCAD
• Computer simulation
• Can simulate proposed system layout in operation
  and measure its performance
• Ex. ProModel, VisFactory, SIMPROCESS

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Planning Manufacturing Facility Layouts

• Process and Warehouse Layouts
• Product Layouts
• Cellular Manufacturing Layouts

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Planning Manufacturing Facility Layouts

• Process Layouts
• Primary focus is on the efficient flow of
  materials
• The wide variety of potential product routings
  through the facility can be evaluated using
  computer simulation
• Warehouse Layouts
• Primary focus is the fast storage and retrieval
  of inventory items
• Decisions about aisle size/placement and location
  of each inventory item can be evaluated using
  computer simulation

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Planning Manufacturing Facility Layouts

• Product Layouts
• Primary focus is on the analysis of production
  lines
• The goal of the production line analysis is to
• Determine how many workstations to have
• Determine which tasks to assign to which
  workstation
• Minimize the number of workers machines used
• Provide the required amount of capacity
• Line balancing is a key part of the analysis

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Planning Product Layouts

• Line Balancing Procedure
• 1. Determine the tasks involved in completing 1
  unit
• 2. Determine the order in which tasks must be
  done
• 3. Draw a precedence diagram
• 4. Estimate task times
• 5. Calculate the cycle time
• 6. Calculate the minimum number of workstations
• 7. Use a heuristic to assign tasks to workstations

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Planning Product Layouts

• Line Balancing Heuristics
• Heuristic methods, based on simple rules, have
  been developed to provide good (not optimal)
  solutions to line balancing problems
• Heuristic methods include
• Incremental utilization (IU) method
• Longest-task-time (LTT) method
• and many others

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Planning Product Layouts

• Incremental Utilization Method
• Add tasks to a workstation in order of task
  precedence one at a time until utilization is
  100 or is observed to fall
• Then the above procedure is repeated at the next
  workstation for the remaining tasks
• Pro Appropriate when one or more task times is
  equal to or greater than the cycle time
• Con Might create the need for extra equipment

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Planning Product Layouts

• Longest-Task-Time Method
• Adds tasks to a workstation one at a time in the
  order of task precedence.
• If two or more tasks tie for order of precedence,
  the one with the longest task time is added
• Conditions for its use
• No task time can be greater than the cycle time
• There can be no duplicate workstations

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Example Armstrong Pumps

• Line Balancing
• Armstrong produces bicycle tire pumps on a
  production line. The time to perform the 6 tasks
  in producing a pump and their immediate
  predecessor tasks are shown on the next slide.
• Ten pumps per hour must be produced and 45
  minutes per hour are productive.
• Use the incremental utilization heuristic to
  combine the tasks into workstations in order to
  minimize idle time.

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Example Armstrong Pumps

• Line Balancing
• Tasks that Time to
• Immediately Perform
• Task Precede Task (min.)
• A -- 5.4
• B A 3.2
• C -- 1.5
• D B,C 2.8
• E D 17.1
• F E 12.8
• Total 42.8

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Example Armstrong Pumps

• Line Balancing Network (Precedence) Diagram

A
B
E
D
F
C
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Example Armstrong Pumps

• Line Balancing Cycle Time
• 45/10 4.5 minutes per pump

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Example Armstrong Pumps

• Line Balancing Minimum Number of Workstations
• Minimum
• Number of
• Workstations
• (42.8)(10)/45 9.51 workstations

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Example Armstrong Pumps

• Line Balancing Incremental Utilization
  Heuristic
• WS Tasks Mins./pump WSs
  Incr.Util.
• 1 A 5.4 5.4/4.51.2 2 60.0
• 1 A,B 5.4 3.2 8.6/4.51.9 2
  95.0
• 1 A,B,C 8.6 1.5 10.1/4.52.2 3
  49.8
• 2 C 1.5 1.5/4.5.33 1 33.3
• 2 C,D 1.5 2.8 4.3/4.5.96 1
  95.6
• 2 C,D,E 4.3 17.1 21.4/4.54.8 5
  95.1
• 3 E 17.1 17.1/4.53.8 4 95.0
• 3 E,F 17.1 12.8 29.9/4.56.6 7
  94.9
• 4 F 12.8 12.8/4.52.8 3 94.8

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Example Armstrong Pumps

• Line Balancing Utilization of Production Line
• 9.51/10 .951 95.1

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Planning Product Layouts

• Rebalancing a Production Line
• Changes that can lead to production lines being
  out of balance or having insufficient/excess
  capacity are
• Changes in demand
• Machine modifications
• Variations in employee learning and training

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Planning Cellular Manufacturing Layouts

• Cell Formation Decision
• Which machines are assigned to manufacturing
  cells
• Which parts will be produced in each cell

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Planning Cellular Manufacturing Layouts

• Fundamental Requirements for Parts to be Made in
  Cells
• Demand for the parts must be high enough and
  stable enough that moderate batch sizes of the
  parts can be produced periodically.
• Parts must be capable of being grouped into parts
  families.

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Planning Cellular Manufacturing Layouts

• More-Complex Issues to be Resolved
• If all the parts cannot be cleanly divided
  between cells, how will we decide which are to be
  the exceptional parts?
• If inadequate capacity is available to produce
  all the parts in cells, which parts should be
  made outside the cells?

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Planning Cellular Manufacturing Layouts

• Cell Formation Procedure
• 1. Form the Parts-Machines Matrix.
• 2. Rearrange the Rows.
• Place the machines that produce the same parts in
  adjacent rows.
• 3. Rearrange the Columns.
• Place the parts requiring the same machines in
  adjacent columns.
• 4. Use the rearranged parts-machines matrix to
  identify cells, the machines for that cell and
  the parts that will be produced in that cell.

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Example Maxx Superchargers

• Cell Formulation
• Maxx produces superchargers for high
  performance cars and trucks. Maxx has
  implemented a group technology program in its
  shop and now must formulate the manufacturing
  cells. Maxx has identified six parts that meet
  the requirements for CM.
• The parts-machines matrix on the next slide
  identifies the 6 parts and 5 machines on which
  the parts are presently produced.

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Example Maxx Superchargers

• Cell Formulation Original Matrix

Parts
1
2
3
4
5
6
X
X
X
A
X
X
X
X
B
Machines
X
X
C
X
X
D
X
X
X
E
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Example Maxx Superchargers

• Cell Formulation Rows Rearranged

Parts
1
2
3
4
5
6
X
X
X
A
X
X
X
E
Machines
X
X
D
X
X
C
X
X
X
X
B
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Example Maxx Superchargers

• Cell Formulation Columns Rearranged

Parts
3
5
6
1
2
4
X
X
X
A
X
X
X
E
Machines
X
X
D
X
X
C
X
X
X
X
B
exceptional part
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Example Maxx Superchargers

• Cell Formulation Summary
• 2 manufacturing cells (MC1, MC2) will be used.
• Parts 3 and 5 will be produced in MC1 on machines
  A and E.
• Parts 1, 2 and 4 will be produced in MC2 on
  machines B, C and D.
• Part 6 is an exceptional part that cannot be
  produced within a single cell.

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Service Facility Layouts
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Characteristics of Services

• There may be a diversity of services provided
• There are three dimensions to the type of
  service
• Standard or custom design
• Amount of customer contact
• Mix of physical goods and intangible services
• There are three types of service operations
• Quasi manufacturing
• Customer-as-participant
• Customer-as-product

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Characteristics of Service Facility Layouts

• The encounter between the customer and the
  service must be provided for.
• The degree to which customer-related features
  must be provided varies with the amount of
  customer involvement and customer contact.

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Planning Service Facility Layouts

• Quasi-Manufacturing Services
• Several topics previously discussed under
  Manufacturing Layouts are relevant here
• Principles of material handling
• CAD and simulation software
• Line balancing

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Planning Service Facility Layouts

• Customer-as-Participant Customer-as-Product
• An important element is providing for customer
  waiting lines
• Amount of space needed for service counters and
  waiting customers
• Placement of waiting lines in overall layout

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Planning Service Facility Layouts

• For many service operations, layouts are like
  process layouts in manufacturing
• The departments of hospitals are grouped and
  located according to their processes
• In some cases, closeness ratings are used to
  reflect the desirability of having one department
  near another

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Using Closeness Ratings to Develop Service
Facility Layouts
Start
Step 1
Let m 1 and n 6.
Identify dept. pairs with CR of m.
Step 2
Develop layout with dept. pairs iden- tified in
Step 2 adjacent to one another.
Step 3
Let m m 1 and n n - 1.
Identify dept. pairs with CR of n.
Step 4
No
Fit the dept. pairs identified in Step 4 into the
trial layout from Step 3.
Step 5
Does m 3 and n 4 ?
Examine the trial layout from Step 5. If any CRs
of dept. pairs are violated, rearrange depts. to
comply with CRs.
Step 6
Yes
Stop
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Using Closeness Ratings to Develop Service
Facility Layouts

• Typical Closeness Ratings
• Closeness Meaning
• Rating of Rating
• 1 Necessary
• 2 Very Important
• 3 Important
• 4 Slightly Important
• 5 Unimportant
• 6 Undesirable

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Example AG Advertising

• Using Closeness Ratings
• AG Advertising is moving into a new office
  suite having seven large, roughly equal size
  rooms, one for each department of the firm.
  Lisa, the manager, must now assign each
  department to a room. She has developed a grid
  of closeness ratings (on the next slide) for the
  21 unique pairs of departments.

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Example AG Advertising

• Closeness Ratings Grid
• Dept. A
• Dept. B
• Dept. C
• Dept. D
• Dept. E
• Dept. F
• Dept. G

5
2
6
6
2
1
4
4
3
3
4
1
4
6
5
1
5
2
2
3
3
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Example AG Advertising

• Unassigned Rooms of Office Suite

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Example AG Advertising

• Layout Satisfying All Pairings of
• Departments with 1 Closeness Ratings
• CR 1
• B D
• B F
• C G

B
D
F
C
G
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Example AG Advertising

• Trying to satisfying all pairings of departments
  with
• 6 closeness ratings, we see that Dept. C needs
  to be
• moved.
• CR 1 CR 6
• B D A D
• B F B C
• C G

B
D
F

G
C
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Example AG Advertising

• Layout Satisfying All Pairings of Departments
  with 6 Closeness Ratings (note that we swapped
  Dept. D and Dept. F)
• CR 1 CR 6
• B D A D
• B F B C
• C G

B
F
A
D
E
G
C
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Wrap-Up World-Class Practice

• Strive for flexibility in layouts
• Multi-job training of workers
• Sophisticated preventive-maintenance programs
• Flexible machines
• Empowered workers trained in problem solving
• Layouts small and compact
• Services follow the above practices plus
  incorporate customer needs in design

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End of Chapter 5, Part B