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Layout Strategy
Dr. Keong LeongManagement Department
UNLV
When you complete this class you should be able to: Explain the strategic importance of
layout decisions Develop a good layout for a process-
oriented facility Balance production flow in a
repetitive or product-oriented facility using the assembly line balancing technique
Key Learning Outcome
Outline
Global Company Profile: McDonalds The Strategic Importance of Layout
Decisions Process-Oriented and Repetitive Layout Assembly Line Balancing
(Principles of Operations Management, Heizer & Render, 7th Edition)
McDonalds New Layout
Redesigning all 30,000 outlets around the world Three separate dining areas
Linger zone with comfortable chairs and Wi-Ficonnections
Grab and go zone with tall counters Flexible zone for kids and families
Facility layout is a source of competitive advantage
(Principles of Operations Management, Heizer & Render, 7th Edition)
McDonalds
Savings of $100,000,000 per year in food costs
New Kitchen Layout
(Principles of Operations Management, Heizer & Render, 7th Edition)
Facility Layout Strategy
The objective of layout strategy is to develop a cost-effective layout that will meet a firms 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
(Principles of Operations Management, Heizer & Render, 7th Edition)
Surgery
Radiology
ER Triage Room
ER Beds Pharmacy
Emergency room admissions
Billing/exit
Laboratories
Patient A - broken leg
Patient B - erratic heart pacemaker
Figure 9.3Figure 9.3
Process-Oriented Layout
(Principles of Operations Management, Heizer & Render, 7th Edition)
Minimize cost = Xij Cijn
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
(Principles of Operations Management, Heizer & Render, 7th Edition)
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
(Principles of Operations Management, Heizer & Render, 7th Edition)
DepartmentDepartment AssemblyAssembly PaintingPainting MachineMachine ReceivingReceiving ShippingShipping TestingTesting(1)(1) (2)(2) Shop (3)Shop (3) (4)(4) (5)(5) (6)(6)
Assembly (1)Assembly (1)
Painting (2)Painting (2)
Machine Shop (3)Machine Shop (3)
Receiving (4)Receiving (4)
Shipping (5)Shipping (5)
Testing (6)Testing (6)
Number of loads per weekNumber of loads per week
50 100 0 0 20
30 50 10 0
20 0 100
50 0
0
Figure 9.4Figure 9.4
Process Layout Example
(Principles of Operations Management, Heizer & Render, 7th Edition)
Process Layout Example
Room 1Room 1 Room 2Room 2 Room 3Room 3
Room 4Room 4 Room 5Room 5 Room 6Room 66060
4040
Receiving Shipping TestingDepartment Department Department
(4) (5) (6)
Figure 9.5Figure 9.5
Assembly Painting Machine ShopDepartment Department Department
(1) (2) (3)
(Principles of Operations Management, Heizer & Render, 7th Edition)
100100
5050
2020
5050
5050
20201010
100100
3030
Interdepartmental Flow GraphInterdepartmental Flow Graph
1 2 3
4 5 6
Figure 9.6Figure 9.6
Process Layout Example
(Principles of Operations Management, Heizer & Render, 7th Edition)
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 Cijn
i = 1
n
j = 1
Process Layout Example
(Principles of Operations Management, Heizer & Render, 7th Edition)
Room 1Room 1 Room 2Room 2 Room 3Room 3
Room 4Room 4 Room 5Room 5 Room 6Room 66060
4040
Receiving Shipping TestingDepartment Department Department
(4) (5) (6)
Figure 9.8
Painting Assembly Machine ShopDepartment Department Department
(2) (1) (3)
Process Layout Example
(Principles of Operations Management, Heizer & Render, 7th Edition)
3030
5050
1010
5050
202020205050 100100
100100
Revised Interdepartmental Flow GraphRevised Interdepartmental Flow Graph
2 1 3
4 5 6
Figure 9.7Figure 9.7
Process Layout Example
(Principles of Operations Management, Heizer & Render, 7th Edition)
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 Cijn
i = 1
n
j = 1
Process Layout Example
Lower Cost Layout
(Principles of Operations Management, Heizer & Render, 7th Edition)
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
(Principles of Operations Management, Heizer & Render, 7th Edition)
Cycle time = Production time available
Demand per day
Minimum number of work stations
Task timesCycle time
Efficiency =
=
Task times(Actual number of work stations)*(Largest cycle time)
Assembly Line Balancing
(Principles of Operations Management, Heizer & Render, 7th Edition)
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
Copier Example
(Principles of Operations Management, Heizer & Render, 7th Edition)
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
Figure 9.13
Copier Example
(Principles of Operations Management, Heizer & Render, 7th Edition)
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
Copier Example
(Principles of Operations Management, Heizer & Render, 7th Edition)
I
GF
C
D
H
B
E
A10
1112
5
4 3
711 3
Copier Example
PerformancePerformance Task Must FollowTask Must FollowTimeTime Task ListedTask Listed
TaskTask (minutes)(minutes) BelowBelowAA 1010 BB 1111 AACC 55 BBDD 44 BBEE 1212 AAFF 33 C, DC, DGG 77 FFHH 1111 EEII 33 G, HG, HTotal time Total time 6666
480 available mins per day
40 units requiredCycle time = 12 mins
Minimum workstations = 5.5 or 6
Line-Balancing Heuristics
Choose the available task with the least number of following tasks
5. Least number of following tasks
Choose the available task with the shortest task time
4. Shortest task time
Choose the available task for which the sum of following task times is the longest
3. Ranked positional weight
Choose the available task with the largest number of following tasks
2. Most following tasks
Choose the available task with the longest task time
1. Longest task time
Table 9.4
Primary Rule
Secondary Rule
(Principles of Operations Management, Heizer & Render, 7th Edition)
480 available mins per day
40 units requiredCycle time = 12 mins
Minimum workstations = 5.5 or 6
PerformancePerformance Task Must FollowTask Must FollowTimeTime Task ListedTask Listed
TaskTask (minutes)(minutes) BelowBelowAA 1010 BB 1111 AACC 55 BBDD 44 BBEE 1212 AAFF 33 C, DC, DGG 77 FFHH 1111 EEII 33 G, HG, HTotal time Total time 6666Station
1
Station 2
Station 4
Station 5
Station 3
Station 6
Figure 9.14
Copier Example
5
I
GF
H
C
D
B
E
A10 11
12
4
3 7
11
3
(Principles of Operations Management, Heizer & Render, 7th Edition)
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%
Copier Example
I
GF
C
D
H
B
E
A10
1112
5
4 3
711 3