Chapter 10, 11, 17 Class 3 Webster Summer 2011. Facilities

Chapter 10, 11, 17Chapter 10, 11, 17

Class 3

Webster Summer 2011

FacilitiesFacilities

Objectives of Facility LayoutObjectives of Facility Layout Minimize material handling costsMinimize material handling costs Utilize space efficientlyUtilize space efficiently Utilize labor efficientlyUtilize labor efficiently Eliminate bottlenecksEliminate bottlenecks Facilitate communication and interaction Facilitate communication and interaction

between workers, between workers and between workers, between workers and their supervisors, or between workers and their supervisors, or between workers and customerscustomers

Reduce manufacturing cycle time or customer service time

Objectives of Facility LayoutObjectives of Facility Layout Eliminate waste or redundant movementEliminate waste or redundant movement Facilitate the entry, exit, and placement of Facilitate the entry, exit, and placement of

material, products, or peoplematerial, products, or people Incorporate safety and security measuresIncorporate safety and security measures Promote product and service qualityPromote product and service quality Encourage proper maintenance activitiesEncourage proper maintenance activities Provide a visual control of operations or Provide a visual control of operations or

activitiesactivities Provide flexibility to adapt to changing Provide flexibility to adapt to changing

conditionsconditions Increase capacityIncrease capacity

Process LayoutProcess Layout Machines grouped by process they performMachines grouped by process they perform

Product LayoutProduct Layout Linear arrangement of workstations to Linear arrangement of workstations to

produce a specific productproduce a specific product

Fixed Position LayoutFixed Position Layout Used in projects where the product cannot Used in projects where the product cannot

be movedbe moved

Basic Types of LayoutsBasic Types of Layouts

Manufacturing Process LayoutManufacturing Process Layout

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A A AReceiving andShipping Assembly

Painting Department

Lathe DepartmentMilling

Department Drilling Department

Grinding Department

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A Product LayoutA Product Layout

InIn

OutOut

Fixed-Position LayoutsFixed-Position Layouts

Typical of projectsTypical of projectsEquipment, workers, materials, other Equipment, workers, materials, other

resources brought to the siteresources brought to the siteHighly skilled laborHighly skilled laborOften low fixed Often low fixed Typically high variable costsTypically high variable costs

Designing Process LayoutsDesigning Process Layouts

Minimize material handling costsMinimize material handling costs Block DiagrammingBlock Diagramming

Minimize nonadjacent loadsMinimize nonadjacent loads Use when quantitative data Use when quantitative data

is availableis available

Relationship DiagrammingRelationship Diagramming Based on location preference between areasBased on location preference between areas Use when quantitative data is not availableUse when quantitative data is not available

Block DiagrammingBlock DiagrammingCreate load summary chartCreate load summary chartCalculate composite (two way) Calculate composite (two way)

movementsmovementsDevelop trial layouts minimizing Develop trial layouts minimizing

number of nonadjacent loadsnumber of nonadjacent loads

Block DiagramsBlock Diagrams

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(a) Initial block diagram(a) Initial block diagram

Block DiagramsBlock Diagrams

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(a) Initial block diagram(a) Initial block diagram (b) Final block diagram(b) Final block diagram

Relationship DiagrammingRelationship Diagramming(Murther’s Grid)(Murther’s Grid)

Used when quantitative Used when quantitative data is not availabledata is not available

Muther’s grid displays Muther’s grid displays preferencespreferences

Denote location Denote location preferences with preferences with weighted linesweighted lines

Relationship Diagramming Relationship Diagramming ExampleExample

ProductionProduction

OfficesOffices

StockroomStockroom

Shipping and Shipping and receivingreceiving

Locker roomLocker room

ToolroomToolroom


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11 Absolutely Absolutely necessarynecessary22 Especially Especially importantimportant33 ImportantImportant44 OkayOkay55UnimportantUnimportant66UndesirableUndesirable


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Service LayoutsService LayoutsUsually process layouts due to Usually process layouts due to

customers needscustomers needsMinimize flow of customers or Minimize flow of customers or

paperworkpaperworkRetailing tries to maximize customer Retailing tries to maximize customer

exposure to productsexposure to productsComputer programs consider shelf Computer programs consider shelf

space, demand, profitabilityspace, demand, profitabilityLayouts must be aesthetically pleasingLayouts must be aesthetically pleasing

Designing Product LayoutsDesigning Product Layouts

Product layouts or assembly linesProduct layouts or assembly linesDevelop precedence diagram of Develop precedence diagram of

taskstasksJobs divided into work elementsJobs divided into work elementsAssign work elements to Assign work elements to

workstationsworkstationsTry to balance the amount work of Try to balance the amount work of

each workstationeach workstation

Line BalancingLine BalancingPrecedence diagramPrecedence diagram

Network showing order of tasks Network showing order of tasks and restrictions (constraints) on and restrictions (constraints) on their performancetheir performance

Cycle timeCycle time Maximum time product spends at Maximum time product spends at

any one workstationany one workstation

Hybrid LayoutsHybrid LayoutsCellular layoutsCellular layouts

Group machines into machining cellsGroup machines into machining cells

Flexible manufacturing systemsFlexible manufacturing systems Automated machining & material Automated machining & material

handling systemshandling systems

Mixed-model assembly linesMixed-model assembly lines Produce variety of models on one lineProduce variety of models on one line

Cellular LayoutsCellular Layouts1.1. Identify families of parts with Identify families of parts with

similar flow pathssimilar flow paths

2.2. Group machines into cells Group machines into cells based on part familiesbased on part families

3.3. Arrange cells so material Arrange cells so material movement is minimizedmovement is minimized

4.4. Locate large shared machines Locate large shared machines at point of useat point of use

Advantages Of Advantages Of Cellular LayoutsCellular Layouts

Reduced material handling and transit timeReduced material handling and transit time Reduced setup timeReduced setup time Reduced work-in-process inventoryReduced work-in-process inventory Better use of human resourcesBetter use of human resources Easier to control - visibilityEasier to control - visibility Easier to automateEasier to automate

Disadvantages Of Disadvantages Of Cellular LayoutsCellular Layouts

Inadequate part familiesInadequate part familiesPoorly balanced cellsPoorly balanced cellsExpanded training and scheduling Expanded training and scheduling

of workersof workers Increased capital investmentIncreased capital investment

Manufacturing Manufacturing CellCell

Key:Key:

SS = Saw= SawLL = Lathe= LatheHMHM = Horizontal milling = Horizontal milling

machinemachineVMVM = Vertical milling machine= Vertical milling machineGG = Grinder= Grinder

Paths of three Paths of three workers moving workers moving within cellwithin cell

Material Material movementmovement

InIn OutOutWorker 1Worker 1

Worker 2Worker 2

Worker 3Worker 3

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Final inspection

Finished part

Mixed Model Mixed Model Assembly LinesAssembly Lines

Produce multiple models in any Produce multiple models in any order on one assembly lineorder on one assembly line

Harley, OpelHarley, Opel Issues in mixed model linesIssues in mixed model lines

Line balancingLine balancing U-shaped lineU-shaped line Flexible workforceFlexible workforce Model sequencingModel sequencing

Facility Location Facility Location ModelsModels

Types Of FacilitiesTypes Of Facilities

Heavy manufacturingHeavy manufacturingAuto plants, steel mills, chemical plantsAuto plants, steel mills, chemical plants

Light industryLight industrySmall components mfg, assemblySmall components mfg, assembly

Warehouse & distribution centersWarehouse & distribution centersRetail & serviceRetail & service

Factors in Heavy Factors in Heavy Manufacturing LocationManufacturing Location

Construction costsConstruction costsLand costsLand costsRaw material and finished goods Raw material and finished goods

shipment modesshipment modesProximity to raw materialsProximity to raw materialsUtilitiesUtilitiesLabor availabilityLabor availability

Factors in Light Factors in Light Industry LocationIndustry Location

Construction costsConstruction costsLand costsLand costsEasily accessible Easily accessible

geographic regiongeographic regionEducation & training capabilitiesEducation & training capabilities

Factors in Factors in Warehouse LocationWarehouse Location

Transportation costsTransportation costsProximity to markets (Customers)Proximity to markets (Customers)

Warehouse Size Warehouse Size ConsiderationsConsiderations

• Customer service level• layout• # of products (Stock Keeping Units - SKUs)• customer base• size of products• racks/shelving• demand variability• MHE requirements/aisle size• regulations - CAL OSHA - earthquake; safety; fire

Factors in Retail LocationFactors in Retail Location

Proximity to customersProximity to customersEase of customer entry and Ease of customer entry and

exitexitLocation is everythingLocation is everything

Global Location FactorsGlobal Location Factors

Government stabilityGovernment stability Government regulationsGovernment regulations Political and economic Political and economic

systemssystems Economic stability and Economic stability and

growthgrowth Exchange ratesExchange rates CultureCulture ClimateClimate Export import regulations, Export import regulations,

duties and tariffsduties and tariffs

Raw material availability Raw material availability Number and proximity of Number and proximity of

supplierssuppliers Transportation and Transportation and

distribution systemdistribution system Labor cost and educationLabor cost and education Available technologyAvailable technology Commercial travelCommercial travel Technical expertiseTechnical expertise Cross-border trade Cross-border trade

regulationsregulations Group trade agreementsGroup trade agreements

Regional Location FactorsRegional Location Factors Labor (availability, Labor (availability,

education, cost and education, cost and unions)unions)

Proximity of Proximity of customerscustomers

Number of customersNumber of customers Construction/leasing Construction/leasing

costscosts Land costsLand costs Modes and quality of Modes and quality of

transportationtransportation Transportation costsTransportation costs

Incentive packages Incentive packages Governmental Governmental

regulationsregulations Environmental Environmental

regulationsregulations Raw material Raw material

availabilityavailability Commercial travelCommercial travel ClimateClimate InfrastructureInfrastructure Quality of lifeQuality of life

Regional Location FactorsRegional Location Factors

Community Community governmentgovernment

Local business Local business regulationsregulations

Government servicesGovernment services Business climateBusiness climate Community servicesCommunity services TaxesTaxes

Availability of sitesAvailability of sites Financial ServicesFinancial Services Community Community

inducementsinducements Proximity of suppliersProximity of suppliers Education systemEducation system

Site Location FactorsSite Location Factors

Customer baseCustomer base Construction/ Construction/

leasing costleasing cost Land costLand cost Site sizeSite size TransportationTransportation UtilitiesUtilities

Zoning restrictionsZoning restrictions TrafficTraffic Safety/securitySafety/security CompetitionCompetition Area business Area business

climateclimate Income levelIncome level

Location IncentivesLocation Incentives

Tax credits Wal-Mart in WyandotteTax credits Wal-Mart in WyandotteRelaxed government regulationRelaxed government regulationJob trainingJob training Infrastructure improvementInfrastructure improvementMoneyMoney

Locate facility at center of geographic area Locate facility at center of geographic area Based on weight and distance traveledBased on weight and distance traveled Establish grid-map of areaEstablish grid-map of area Identify coordinates Identify coordinates

and weights shipped and weights shipped for each locationfor each location

Center-of-Gravity TechniqueCenter-of-Gravity Technique

Center of gravity

DataWeight X coord Y coord

Location 1 0.2 100 400Location 2 0.2 250 200Location 3 0.2 50 125Location 4 0.2 300 300Location 5 0.2 10 475

ResultsSum 1 710 1500Average 142 300Weighted Average 142 300

Distance tableX coord 100 250 50 300 10Y coord 400 200 125 300 475

X coord Y coord Location 1 Location 2 Location 3 Location 4 Location 5100 400 Location 1 0 250 279.5085 223.6068 117.1537250 200 Location 2 250 0 213.6001 111.8034 365

50 125 Location 3 279.5085 213.6001 0 305.1639 352.2783300 300 Location 4 223.6068 111.8034 305.1639 0 338.7108

10 475 Location 5 117.1537 365 352.2783 338.7108 0Total 870.269 940.4035 1150.551 979.2849 1173.143Weighted Total 174.0538 188.0807 230.1102 195.857 234.6286

Location

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Center of gravity

DataWeight X coord Y coord

Location 1 0.3 100 400Location 2 0.25 250 200Location 3 0.1 50 125Location 4 0.2 300 300Location 5 0.15 10 475

ResultsSum 1 710 1500Average 142 300Weighted Average 159 313.75

Distance tableX coord 100 250 50 300 10Y coord 400 200 125 300 475

X coord Y coord Location 1 Location 2 Location 3 Location 4 Location 5100 400 Location 1 0 250 279.5085 223.6068 117.1537250 200 Location 2 250 0 213.6001 111.8034 365

50 125 Location 3 279.5085 213.6001 0 305.1639 352.2783300 300 Location 4 223.6068 111.8034 305.1639 0 338.7108

10 475 Location 5 117.1537 365 352.2783 338.7108 0Total 870.269 940.4035 1150.551 979.2849 1173.143Weighted Total 152.7453 173.4707 251.1271 176.3559 229.3661

Location

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Project ManagementProject Managementand Operationsand Operations

Project Project ManagementManagement

First Essay on Project Management:1697 – “An Essay Upon Projects”

1959 HBR Article – “The Project Manager”

Air Force Manual 1964

Project ManagementProject ManagementIn today’s global marketplace, complexity and speed are certainties. In such an environment, a good axiom for project management is, Do It, Do It Right, Do It Right Now. Creating clear direction, efficiency, timely response, and quality outcomes requires project managers who are agile -- adept at change. The associated disciplinary areas are clearly spelled out in the following PMI definition.

“Project management is the application of knowledge, skills, tools, and techniques to a broad range of activities in order to meet the requirements of a particular project. Project management is comprised of five Project Management Process Groups – Initiating Processes, Planning Processes, Executing Processes, Monitoring and Controlling Processes, and Closing Processes.

Source: Project Management Institute - http://www.pmi.org/info/PP_AboutProfessionOverview.asp?nav=0501

http://www.pmi.org/info/PP_AboutProfessionOverview.asp?nav=0501

Elements of Project Elements of Project ManagementManagement

Project teamProject team Individuals from different departments within Individuals from different departments within

companycompany Matrix organizationMatrix organization

Team structure with members from different Team structure with members from different functional areas depending on skills neededfunctional areas depending on skills needed

Project manager - Leader of project teamProject manager - Leader of project team Project Charter – high level description of what is Project Charter – high level description of what is

to be accomplished in a project and delegates to be accomplished in a project and delegates authority to project manager to implement authority to project manager to implement actions to complete projectactions to complete project

Project PlanningProject PlanningStatement of workStatement of work

Written description of goals, work & Written description of goals, work & time frame of projecttime frame of project

Activities require labor, resources & Activities require labor, resources & timetime

Precedence relationship shows Precedence relationship shows sequential relationship of project sequential relationship of project activitiesactivities

Elements of Elements of Project PlanningProject Planning

Define project objective(s)Define project objective(s) Identify activitiesIdentify activitiesEstablish precedence relationshipsEstablish precedence relationshipsMake time estimatesMake time estimatesDetermine project completion timeDetermine project completion timeCompare project schedule objectivesCompare project schedule objectivesDetermine resource requirements to Determine resource requirements to

meet objectivemeet objective

Work Breakdown Work Breakdown StructureStructure

Hierarchical organization of work to Hierarchical organization of work to be done on a projectbe done on a project

Project broken down into modulesProject broken down into modules Modules subdivided into Modules subdivided into

subcomponents, activities, and taskssubcomponents, activities, and tasks Identifies individual tasks, workloads, Identifies individual tasks, workloads,

and resource requirementsand resource requirements

Project ControlProject ControlAll activities identified and includedAll activities identified and includedCompleted in proper sequenceCompleted in proper sequenceResource needs identifiedResource needs identifiedSchedule adjustedSchedule adjustedMaintain schedule and Maintain schedule and

budgetbudgetComplete on timeComplete on time

A Gantt ChartA Gantt Chart

Popular tool for project schedulingPopular tool for project schedulingGraph with bar for representing the Graph with bar for representing the

time for each tasktime for each taskProvides visual display of project Provides visual display of project

schedulescheduleAlso shows slack for activitiesAlso shows slack for activities

Amount of time activity can be Amount of time activity can be delayed without delaying projectdelayed without delaying project

Around since 1914

Gantt ChartsGantt Charts

Gantt charts were employed on major infrastructure projects including the Hoover Dam and Interstate highway system and still are an important tool in project management.

Gantt described two principles for his charts:

1. measure activities by the amount of time needed to complete them

2. the space on the chart can be used the represent the amount of the activity that should have been done in that time.

A Gantt ChartA Gantt Chart| | | | |

Activity

Design house and obtain financing

Lay foundation

Order and receive materials

Build house

Select paint

Select carpet

Finish work

00 22 44 66 88 1010MonthMonth

MonthMonth11 33 55 77 99

Figure 6.2Figure 6.2

Example of Gantt Chart Example of Gantt Chart Problem Problem

CPM/PERTCPM/PERTCritical Path Method (CPM)Critical Path Method (CPM)

DuPont & Remington-Rand (1956)DuPont & Remington-Rand (1956) Deterministic task timesDeterministic task times

Project Eval. & Review Technique Project Eval. & Review Technique (PERT)(PERT)

US Navy, LockheedUS Navy, Lockheed Multiple task time estimatesMultiple task time estimates

PERT/CPMPERT/CPM

Program Evaluation and Review Technique (PERT): developed in conjunction with the development of the Polaris missile program for submarines – developed by the US Navy with Lockheed as the lead contractor

Critical Path Method (CPM): developed through a joint venture between the DuPont Corporation and the Remington Rand Corporation – the original purpose was to monitor and evaluate plant maintenance management projects.

Project Network for a HouseProject Network for a House

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Lay Lay foundationfoundation

Design house Design house and obtain and obtain financingfinancing

Order and Order and receive receive materialsmaterials

DummyDummy

Finish Finish workwork

Select Select carpetcarpet

Select Select paintpaint

Build Build househouse

Figure 6.4Figure 6.4

Critical PathCritical Path A path is a sequence of connected A path is a sequence of connected

activities running from start to end activities running from start to end node in networknode in network

The critical path is the The critical path is the path with the longest path with the longest duration in the networkduration in the network

Project cannot be Project cannot be completed in less than completed in less than the time of the critical the time of the critical pathpath

The Critical The Critical PathPath

A:A: 1-2-3-4-6-71-2-3-4-6-73 + 2 + 0 + 3 + 1 = 93 + 2 + 0 + 3 + 1 = 9 months months

B:B: 1-2-3-4-5-6-71-2-3-4-5-6-73 + 2 + 0 + 1 + 1 + 1 = 83 + 2 + 0 + 1 + 1 + 1 = 8 months months

C:C: 1-2-4-6-71-2-4-6-73 + 1 + 3 + 1 = 83 + 1 + 3 + 1 = 8 months months

D:D: 1-2-4-5-6-71-2-4-5-6-73 + 1 + 1 + 1 + 1 = 73 + 1 + 1 + 1 + 1 = 7 months months

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The Critical The Critical PathPath

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Start at 3 months

Start at 5 months

1

Finish at 9 months

Start at 8 months

Figure 6.6

Activity Start Times

Project CrashingProject CrashingCrashing is reducing project time Crashing is reducing project time

by expending additional resourcesby expending additional resourcesCrash time is an amount of time an Crash time is an amount of time an

activity is reducedactivity is reducedCrash cost is the cost of reducing Crash cost is the cost of reducing

the activity timethe activity timeGoal is to reduce project duration Goal is to reduce project duration

at minimum costat minimum cost

Crashing costs increase as project Crashing costs increase as project duration decreasesduration decreases

Indirect costs increase as project Indirect costs increase as project duration increasesduration increases

Reduce project length Reduce project length as long as crashing as long as crashing costs are less than costs are less than indirect costsindirect costs

Time-Cost Relationship Time-Cost Relationship

Life Cycle ManagementLife Cycle Management

• Long term view of projects to guide decision making – solutions that provide life time success vice short term

• Acquisition; development; production; introduction; sustainment; disposal

• Links system costs to big picture; better use of resources; minimize total cost of ownership

What’s Next What’s Next

• Chap 9, Chap 12 (Capacity and Aggregate Planning, Inventory Management)

Documents

Chapter 10, 11, 17 Class 3 Webster Summer 2011. Facilities