Chapter 09 Layout Strategy 8th Ed 2011 -...

© 2011 Pearson Education, Inc. publishing as Prentice Hall

SCM 352

9 Layout Strategies

Outline

• Global Company Profile: McDonald’s• The Strategic Importance of Layout

Decisions• Process-Oriented and Repetitive Layout• Assembly Line Balancing

© 2011 Pearson Education, Inc. publishing as Prentice Hall

McDonald’s New Layout

• Redesigning all 30,000 outlets around the world• Three separate dining areas

• Linger zone with comfortable chairs and Wi-Fi connections

• Grab and go zone with tall counters• Flexible zone for kids and families

• Facility layout is a source of competitive advantage

© 2011 Pearson Education, Inc. publishing as Prentice Hall

McDonald’s

Savings of $100,000,000 per year in food costs

New Kitchen Layout

Drive-Up Grocery

In France, a Drive-Up Grocery Takes Off, Wall Street Journal, Jan 14, 2010

© 2011 Pearson Education, Inc. publishing as Prentice Hall

Facility Layout Strategy

• The objective of layout strategy is to develop a cost-effective layout that will meet a firm’s competitive needs

• Location or arrangement of everything within & around a facility to achieve:– 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

© 2011 Pearson Education, Inc. publishing as Prentice Hall

Surgery

Radiology

ER Triage Room

ER Beds Pharmacy

Emergency room admissions

Billing/exit

Laboratories

Patient A - broken leg

Patient B - erratic heart pacemaker

Figure 9.3

Process-Oriented Layout

© 2011 Pearson Education, Inc. publishing as Prentice Hall

Minimize cost = ∑ ∑ Xij Cij

n

i = 1

n

j = 1

where n = total number of work centers or departments

i, j = individual departmentsXij = number of loads moved from

department i to department jCij = cost to move a load between

department i and department j

Process-Oriented Layout

© 2011 Pearson Education, Inc. publishing as Prentice Hall

Process Layout Example

Arrange six departments in a factory to minimize the material handling costs. Each department is 20 x 20 feet and the building is 60 feet long and 40 feet wide.• Construct a “from-to matrix”• Determine the space requirements• Develop an initial schematic diagram• Determine the cost of this layout • Try to improve the layout• Prepare a detailed plan

© 2011 Pearson Education, Inc. publishing as Prentice Hall

Department Assembly Painting Machine Receiving Shipping Testing(1) (2) Shop (3) (4) (5) (6)

Assembly (1)

Painting (2)

Machine Shop (3)

Receiving (4)

Shipping (5)

Testing (6)

Number of loads per week

50 100 0 0 20

30 50 10 0

20 0 100

50 0

0

Process Layout Example

© 2011 Pearson Education, Inc. publishing as Prentice Hall

Process Layout Example

Room 1 Room 2 Room 3

Room 4 Room 5 Room 660’

40’

Receiving Shipping TestingDepartment Department Department

(4) (5) (6)

Assembly Painting Machine ShopDepartment Department Department

(1) (2) (3)

© 2011 Pearson Education, Inc. publishing as Prentice Hall

100

50

50

10100

30

Interdepartmental Flow Graph

1 2 3

4 5 6

Process Layout Example

© 2011 Pearson Education, Inc. publishing as Prentice Hall

Cost = $50*20 + $100*40 + $20*60(1 and 2) (1 and 3) (1 and 6)

+ $30*20 + $50*40 + $10*20(2 and 3) (2 and 4) (2 and 5)

+ $20*60 + $100*20 + $50*20(3 and 4) (3 and 6) (4 and 5)

= $13,200

Cost = ∑ ∑ Xij Cij

n

i = 1

n

j = 1

Process Layout Example

© 2011 Pearson Education, Inc. publishing as Prentice Hall

Room 1 Room 2 Room 3

Room 4 Room 5 Room 660’

40’

Receiving Shipping TestingDepartment Department Department

(4) (5) (6)

Painting Assembly Machine ShopDepartment Department Department

(2) (1) (3)

Process Layout Example

© 2011 Pearson Education, Inc. publishing as Prentice Hall

30

50

50

50 100

100

Revised Interdepartmental Flow Graph

2 1 3

4 5 6

Process Layout Example

© 2011 Pearson Education, Inc. publishing as Prentice Hall

Cost = $50*20 + $100*20 + $20*40(1 and 2) (1 and 3) (1 and 6)

+ $30*40 + $50*20 + $10*40(2 and 3) (2 and 4) (2 and 5)

+ $20*60 + $100*20 + $50*20(3 and 4) (3 and 6) (4 and 5)

= $10,600

Cost = ∑ ∑ Xij Cij

n

i = 1

n

j = 1

Process Layout Example

Lower Cost Layout

© 2011 Pearson Education, Inc. publishing as Prentice Hall

Assembly Line Balancing

• Objective is to minimize the imbalance between machines or personnel while meeting required output

• Starts with the precedence relationships– Determine cycle time– Calculate theoretical minimum number of

workstations– Balance the line by assigning specific tasks to

workstations– Calculate efficiency

© 2011 Pearson Education, Inc. publishing as Prentice Hall

Cycle time = Production time available

Demand per day

Minimum number of work stations

Σ Task timesCycle time

Efficiency =

=

Σ Task times(Actual number of work stations)*(Largest cycle time)

Assembly Line Balancing

© 2011 Pearson Education, Inc. publishing as Prentice Hall

This means that tasks B and E cannot be done until task A has been completed

Performance Task Must FollowTime Task Listed

Task (minutes) BelowA 10 —B 11 AC 5 BD 4 BE 12 AF 3 C,DG 7 FH 11 EI 3 G,HTotal time 66

Example

© 2011 Pearson Education, Inc. publishing as Prentice Hall

Performance Task Must FollowTime Task Listed

Task (minutes) BelowA 10 —B 11 AC 5 BD 4 BE 12 AF 3 C,DG 7 FH 11 EI 3 G,HTotal time 66

I

GF

C

D

H

B

E

A10

1112

5

4 3

711 3

Example

© 2011 Pearson Education, Inc. publishing as Prentice Hall

I

GF

C

D

H

B

E

A10

1112

5

4 3

711 3

Performance Task Must FollowTime Task Listed

Task (minutes) BelowA 10 —B 11 AC 5 BD 4 BE 12 AF 3 C, DG 7 FH 11 EI 3 G, HTotal time 66

480 available mins per day

40 units required

Cycle time =Production time available per day

Units required per day= 480 / 40= 12 minutes per unit

Minimum number of

workstations=

∑ Time for task i

Cycle time

n

i = 1

= 66 / 12= 5.5 or 6 stations

(ROUND UP!)

Example

© 2011 Pearson Education, Inc. publishing as Prentice Hall

I

GF

C

D

H

B

E

A10

1112

5

4 3

711 3

Copier Example

Performance Task Must FollowTime Task Listed

Task (minutes) BelowA 10 —B 11 AC 5 BD 4 BE 12 AF 3 C, DG 7 FH 11 EI 3 G, HTotal time 66

480 available mins per day

40 units requiredCycle time = 12 mins

Minimum workstations = 5.5 or 6

Line-Balancing Heuristics

1. Longest task time Choose the available task with the longest task time

2. Most following tasks Choose the available task with the largest number of following tasks

3. Ranked positional weight

Choose the available task for which the sum of following task times is the longest

4. Shortest task time Choose the available task with the shortest task time

5. Least number of following tasks

Choose the available task with the least number of following tasks

Primary Rule

Secondary Rule

© 2011 Pearson Education, Inc. publishing as Prentice Hall

480 available mins per day

40 units requiredCycle time = 12 mins

Minimum workstations = 5.5 or 6

Performance Task Must FollowTime Task Listed

Task (minutes) BelowA 10 —B 11 AC 5 BD 4 BE 12 AF 3 C, DG 7 FH 11 EI 3 G, HTotal time 66Station

1

Station 2

Station 4

Station 5

Station 3

Station 6

Example

5

I

GF

H

C

D

B

E

A10 11

12

4

3 7

11

3

© 2011 Pearson Education, Inc. publishing as Prentice Hall

480 available mins per day

40 units requiredCycle time = 12 mins

Minimum workstations = 5.5 or 6

Efficiency =∑ Task times

(actual number of workstations) x (largest cycle time)

= 66 minutes / (6 stations) x (12 minutes)= 91.7%

Example

I

GF

C

D

H

B

E

A10

1112

5

4 3

711 3

Thank You

Questions? ?