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Operations Management/Ch. 8 Facility Design and Layout

2007 Thomson South-Western
1
Facility Design and Layout
CHAPTER 8
OPERATIONS
MANAGEMENT
An Integrated Goods and Services
Approach
JAMES R. EVANS
AND
DAVID A. COLLIER
2
1. To understand different types of layout patterns,
how they relate to process choice, and some of
the methods to evaluate alternative layout plans.

2. To understand the key issues involved in
designing product layouts and balance assembly
lines to enable efficient and economical
production of goods and services.

3. To understand the major issues involved in
designing process layouts, and to be able to
apply simple tools to develop a good process
layout design.
Chapter 8 Learning Objectives
3
4. To understand the issues that operations
managers must address in designing individual
workstations to meet productivity, quality, and
employee safety requirements.

5. To understand the importance of addressing the
social and environmental aspects of work in
designing jobs and team-based processes to
enhance employee motivation and satisfaction.

Chapter 8 Learning Objectives
4
Chapter 8 Facility Design and Layout
Facility layout refers to the specific arrangement
of physical facilities. Facility-layout studies are
necessary whenever
(1) a new facility is constructed,
(2) there is a significant change in demand or
throughput volume,
(3) a new good or service is introduced to the
customer benefit package, or
(4) different processes, equipment, and/or
technology are installed.
5
Purposes of layout studies are to:
minimize delays in materials handling and customer
movement,
maintain flexibility,
use labor and space effectively,
promote high employee morale and customer
satisfaction,
provide for good housekeeping and maintenance, &
enhance sales as appropriate in manufacturing and
service facilities.
6
Other Facility Layout Issues
Essentially, a good layout should support the
ability of operations to accomplish its mission.
If the facility layout is flawed in some way,
process efficiency and effectiveness suffers.
In manufacturing, facility layout is generally
unique, and changes can be accomplished
without much difficulty.

7
Other Facility Layout Issues
For service firms, however, the facility layout is
often duplicated in hundreds or thousands of
sites. This makes it extremely important that the
layout be designed properly, as changes can be
extremely costly.
Also see Supply Chain Design for Multisite
Services in Chapter 9.

8
Types of Facility Layouts
A product layout is an arrangement based
on the sequence of operations that are
performed during the manufacturing of a
good or delivery of a service.
Examples: winemaking industry, credit card
processing, Subway sandwich shops, paper
manufacturers, insurance policy processing,
and automobile assembly lines.
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Product Layout
Advantages of product layouts include lower
work-in-process inventories, shorter processing
times, less material handling, lower labor skills,
and simple planning and control systems.
Disadvantages include a breakdown at one
workstation can cause the entire process to shut
down, a change in product design or the
introduction of new products may require major
changes in the layout, and little job satisfaction.
10
Exhibit 8.1 Product Layout for Wine Manufacturer
11
A process layout consists of a functional
grouping of equipment or activities that do
similar work.
Examples: legal offices, shoe manufacturing,
jet engine turbine blades, and hospitals use a
process layout.
12
Process Layout
Advantages of process layouts include a lower
investment in general purpose equipment, and the
diversity of jobs inherent in a process layout can
lead to increased worker satisfaction.
Disadvantages include high movement and
transportation costs, more complicated planning
and control systems, longer total processing time,
higher in-process inventory or waiting time, and
higher worker-skill requirements.
13
Exhibit 8.2 Process Layout for a Machine Shop
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Cellular/Group Layout
Group technology, or cellular
manufacturing, classifies parts into families
so that efficient mass-production-type layouts
can be designed for the families of goods or
services.
In a group, or cellular, layout, the design is not
according to the functional characteristics of
equipment, but rather by groups of different
equipment (called cells) needed for producing
families of goods or services.
15
Cellular/Group Layout
Group layouts are used to centralize people
expertise and equipment capability.
Examples: groups of different equipment (called
cells) needed for producing families of goods or
services, group legal (labor law, bankruptcy,
divorce, etc.) or medical specialties (maternity,
oncology, surgery, etc.).
16
Exhibit 8.3 Cellular Manufacturing Layout
Source: E. Paul Degarmo, J. T. Black, and Ronald A. Kosher, Materials and
Processes in Manufacturing, 9th Edition, John Wiley & Sons, 2003.
17
Exhibit 8.4 Two Part Families
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Exhibit 8.5 Process Layout Without Part Families

19
Exhibit 8.6 Group Layout Based on Part Families

20
Exhibit 7.7 Exhibit 8.7 Process (Job Shop) Layout at
Rockwells Dallas Factory
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Exhibit 8.8 Cellular Layout at Rockwells Dallas Factory
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A fixed-position layout consolidates the
resources necessary to manufacture a good
or deliver a service, such as people, materials,
and equipment, in one physical location.
The production of large items such as heavy
machine tools, airplanes, buildings,
locomotives, and ships is usually
accomplished in a fixed position layout.

23
Fixed-position layout
This fixed-position layout is synonymous
with the "project" classification of processes
presented in Chapter 7.
Service-providing firms also use fixed-
position layouts; examples include major
hardware and software installations,
sporting events, and concerts.
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Exhibit 8.9 Comparison of Basic Layout Patterns

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Materials Handling Issues and Systems
Industrial trucks
Fixed-path conveyor systems
Overhead cranes
Automated storage and retrieval systems
(see OM Spotlight: Ocular Sciences Contact
Lenses Distribution Center)
Tractor-trailer systems
Automated guided vehicles (AGVs)
26
Exhibit 8.10 Ocular Sciences Contact Lenses
Distribution Center

27
Chapter 8 Facility Layout in Service Organizations
Facility Design in Service Organizations

Service organizations use product, process,
group, and fixed-position layouts to organize
different types of work.
Process Layout Examples
Libraries place reference materials, serials, and
microfilms into separate areas; hospitals group
services by function also, such as maternity,
oncology, surgery, and X-ray; and insurance
companies have office layouts in which
claims, underwriting, and filing are individual
departments.
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Chapter 8 Facility Layout in Service Organizations
Facility Design in Service Organizations

Product Layout Examples
Service organizations that provide highly standardized
services tend to use product layouts. For example,
Exhibit 8.11 shows the layout of the kitchen at a small
pizza restaurant that has both dine-in and delivery.
Lenscrafter Uses Both Process and Product
Layouts
In Exhibit 6.14 we see the customer contact area is
arranged in a process layout. In the lab area,
however, where lenses are manufactured, a group
layout is used.
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Exhibit 8.11 Product Layout for a Pizza Kitchen
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Designing Product Layouts
A product layout is an arrangement based on the
sequence of operations that are performed during
the manufacturing of a good or delivery of a service.

Flow-blocking delay occurs when a work center
completes a unit but cannot release it because the
in-process storage at the next stage is full. The
worker must remain idle until storage space
becomes available.

Lack-of-work delay occurs whenever one stage
completes work and no units from the previous
stage are awaiting processing.
31
Exhibit 8.12 A Typical Manufacturing Workstation Layout
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Exhibit 8.13 Product Layout Design Options
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Chapter 8 Assembly Line Balancing
Assembly-Line Balancing
An assembly line is a product layout dedicated to
combining the components of a good or service
that has been created previously.
Assembly line balancing is a technique to group
tasks among workstations so that each
workstation has in the ideal case the same
amount of work.
Examples: winemaking industry, credit card
processing, Subway sandwich shops, paper
manufacturers, insurance policy processing, and
automobile assembly lines.
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Assembly-Line Balancing

To begin, we need to know three types of information
to balance an assembly line:
the set of tasks to be performed and the time
required to perform each task (work content),

the precedence relations among the tasks that
is, the sequence in which tasks must be
performed, and

the desired output rate or forecast of demand for
the assembly line.
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Exhibit 8.14 A Three-Task Assembly Line
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Cycle time is the interval between successive
outputs coming off the assembly line.

In the three-operation example shown in Exhibit
8.14, if we use only one workstation, the cycle
time is 1 minute; that is, one completed assembly
is produced every minute.

If two workstations are used, as just described,
the cycle time is 0.5 minute.

If three workstations are used, the cycle time is
still 0.5 minute, because task A is the bottleneck,
or slowest operation. The line can produce only
one assembly every 0.5 minute.
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Cycle time is the interval between successive outputs
coming off the assembly line.

Cycle time is related to the output rate (R) by the following
equation
C = A/R (8.2)
where A = available time to produce the output.

The output rate is normally the demand forecast,
adjusted for on-hand inventory if appropriate, or orders
released to the factory.
Both A and R must have the same time units (hour, day,
week, and so on).

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Minimum number of workstations required = Sum of
task times/Cycle time = t / C (8.3)

Total Time Available = (Number work
stations)(Cycle Time) = N*CT (8.4)

Total Idle Time = N*CT - t (8.5)

Assembly Line Efficiency = t/ (N*CT) (7.6)

Balance Delay = 1 - Assembly Line Efficiency (8.7)
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Exhibit 8.15 A Typical In-Line Skate
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Exhibit 8.16 Precedence Network for In-Line Skate
41
Assembly Line Balance for In-Line Skate (Exhibit 8.16)

Workstation Tasks Total Time Idle Time
A 1, 2, 5 5.7 0.3
B 3, 4, 6, 7, 8 3.7 2.3
Total 9.4 2.6

Using equations (8.4) to (8.6) we may compute the following:
Total Time Available = (Number workstations)(Cycle Time) =
N*CT = 2*6 = 12 minutes

Total Idle Time = N*CT - t = 2*6 - 9.4 = 2.6 minutes

Assembly Line Efficiency = t/ N*CT = 9.4/2*6 = 78.3%
42
Chapter 8 Designing Process Layouts
We will assume that cost is proportional to distance
traveled. Since the distance traveled depends on the
layout, we use the following approach:

1. Design a trial layout.
2. Compute the distances between work centers.
3. Multiply interdepartmental distances by the volume of
flow between work centers to create a volume-distance
matrix; then compute the total cost.
4. Use the volume-distance matrix created in Step 3 to
propose changes in the current layout. Repeat the
process (from Step 2) until a satisfactory layout is
obtained.
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Exhibit 8.17
Volume (Load) Matrix for HVE, Inc.
Designing Process Layouts
Home Video Equipment (HVE) is building a new factory and
must determine how eight departments should be organized
within the factory. Square footage per department and
annual movements (volumes) between departments are
know.
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Material Flow for HVE, Inc.

Exhibit 8.18
45
Initial Layout for HVE, Inc.

Exhibit 8.19
46
Volume-Distance Matrix for
Initial HVC, Inc. Layout

Exhibit 8.20
D
AB
= |X
A
- X
B
| + |Y
A
- Y
B
| (Equation 8.8)
Based on Exhibit 8.19, the distance between receiving and storage,
whose center is at the point (5.5, 8), and pressing, whose center is at
the point (2, 6), is |5.5 - 2| + | 8 - 6| = 3.5 + 2 = 5.5. We obtain the
volume-distance matrix shown above by multiplying the load
between receiving and pressing (100) by the distance between the
departments (55) yields a volume-distance figure of 5,500.
47
Second Trial Layout for HVE, Inc.

Exhibit 8.21
48
Process Layouts -- Third Trial for HVE, Inc.

Exhibit 8.22
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Chapter 8 Workplace Design
Workplace Design
Example questions that must be addressed at the
workstation level include:

1. Who will use the workplace? Will the workstation
be shared? How much space is required?
2. How will the work be performed? What tasks are
required? How much time does each task take?
How much time is required to setup for the
workday or for a particular job? How might the
tasks be grouped into work activities most
effectively?
50
Workplace Design
Example questions that must be addressed at the
workstation level include:

3. What technology is needed? Employees may
need a computer or access to customer records
and files, special equipment, intercoms, and
other forms of technology.
51
Pizza Preparation Workplace Design

Exhibit 8.23
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Ergonomics is concerned with improving productivity
and safety by designing workplaces, equipment,
instruments, computers, workstations, and so on that
take into account the physical capabilities of people.

Three key safety issues are lighting, temperature and
humidity, and noise.

A job is the set of tasks an individual performs.

Job design involves determining the specific job tasks
and responsibilities, the work environment, and the
methods by which the tasks will be carried out to meet
the goals of operations.
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Job enlargement is the horizontal expansion
of the job to give the worker more variety
although not necessarily more responsibility.

Job enrichment is vertical expansion of job
duties to give the worker more responsibility.

A team is a small number of people with
complementary skills who are committed to a
common purpose, set of performance goals,
and approach for which they hold themselves
mutually accountable.
54
Virtual Workplaces

About two-thirds of the U.S. work force collects,
organizes, analyses, and disseminates
information.

Physical assets such as paper and offices are
being replaced by virtual projects, offices, and
workplaces.

Check out Officescape (www.officescape.com).
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Exhibit 8.25 Advantages and Disadvantages of
Virtual Offices and Teams
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FROM HERE ON THE SLIDES
DEAL WITH PROBLEMS FROM
THE TEXT

READ AT YOUR LEISURE
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Exhibit 8.26 Solved Problem #1 -- Yurtle Mortgage Co.
Warehouse Distances and Daily Folder Volume
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Exhibit 8.27
Solved Problem #1 -- Yurtle Mortgage Co. Facility Layout
Distances
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Exhibit 8.28
Solved Problem #2 -- Lous Machine Shop Load Matrix
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Exhibit 8.29
Solved Problem # 2 -- Lous Machine Shop Solution
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Exhibit 8.30 Toms AirSoft Gun Shop Data Problem #1
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Chapter 8 Assembly Line Balancing Solved Problem # 3
To make one particular model of a personal digital assistant
(PDA) on an assembly line, the work content is defined by the
ten tasks listed to the right.

Work Task Time (seconds) Immediate Predecessor(s)
1 3.0 None
2 2.0 None
3 1.5 1,2
4 5.0 3
5 3.5 4
6 3.0 4
7 2.5 5,6
8 4.0 7
9 2.0 8
10 5.5 9
Total 32.0 seconds
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(a) Draw the precedence diagram for this assembly line.
(b) What is the cycle time if you want to produce 4,500
PDAs per workday assuming 7.5 hours per day?
(c) What is the theoretical minimum number of
workstations to balance this line?
(d) Using the largest task time first decision rule with the
shortest task time rule being used for breaking ties,
balance this assembly line. (Make sure you do not
violate precedent relationships and the total work per
workstation must be less than or equal to 6 seconds.)
(e) Compute process efficiency and evaluate the resulting
balance in part (d).
(f) Comment on the results
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(a)

1
3 sec
2
2 sec
3
1.5
sec
4
5 sec
5
3.5 sec
6
3.0
sec
7
2.5 sec
8
4 sec
9
2 sec
10
5.5 sec
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(b) What is the cycle time if you want to produce 4,500 PDAs
per workday assuming 7.5 hours per day?

C= A/R= (7.5 hours/day)(60 minute/hour)(60seconds/minute)/(4,500 units/day)
= (27,000 seconds/day)/(4,500 units/day)
= 6 seconds

(c) What is the theoretical minimum number of workstations
to balance this line?

TW=(Sum task times/CT= 32 seconds/6 seconds
= 5.33 or rounded to 6 workstations
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(d) Using the largest task time first decision rule with the
shortest task time rule being used for breaking ties,
balance this assembly line. (Make sure you do not violate
precedent relationships and the total work per workstation
must be less than or equal to 6 seconds.)

Workstation Tasks Total Time Idle Time Idleness%
A 1, 2 5.0 1.0 16.7%
B 3 1.5 4.5 75.0%
C 4 5.0 1.0 16.7%
D 5 3.5 2.5 41.7%
E 6, 7 5.5 0.5 8.3%
F 8, 9 6.0 0.0 0.0%
G 10 5.5 0.5 8.3%
Total 32.0 10.0
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(e) Compute process efficiency and evaluate the resulting
balance in part (d).

Total Time Available = (Number work stations)(Cycle Time) = N*CT = 7*6 = 42 seconds
Total Idle Time = N*C - ( t = 7*6 32) = 10 seconds
Assembly Line Efficiency = St/ N*C = 32/(7*6) = 76.2%

(f) Comment on the results?

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Exhibit 8.31 Data for Problem #2 Lous Metal Products
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Exhibit 8.32 Data for CORELAP Problem #3
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Exhibit 8.33 CORELAP Preference Table Problem #3
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Exhibit 8.34 Equipment Movement Frequencies for
DOT Factory Problem #4
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Exhibit 8.35 Distance Data for DOT Factory Problem #4
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Exhibit 8.36 DOT Factory Layout Problem #4
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Exhibit 8.37 Cindys Tax Service Preference Table Problem #6
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Exhibit 8.38 Interdepartmental Distances for Mercy Hospital
Problem # 7
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Exhibit 8.39 Interdepartmental Trips per Day for Mercy Hospital
Problem # 7
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Exhibit 8.40 Unit Flows Between Departments Problem #8
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Exhibit 8.41 Personal Computer Workstation Design Problem #9
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Exhibit 8.42 Precedence Diagram for Problem 13
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Exhibit 8.43 Precedence Diagram for Problem 15
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Exhibit 8.44 Data for Problem 18
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Exhibit 8.45 Case: University Library Current Layout
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Exhibit 8.46 Case: University Library Current Workflow
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Exhibit 8.47
Case: BankUSA: Cash Movement (1 of 2)
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Exhibit 8.47
(continued)
Case: BankUSA: Cash Movement (2 of 2)

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Operations Management/Ch. 8 Facility Design and Layout

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