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Capacity and Facilities

(Layout)

Capacity
Maximum capability to produce
Capacity planning
establishes overall level of productive

resources for a firm


3 basic strategies for timing of capacity expansion

in relation to steady growth in demand (lead, lag,


and average)

Capacity Expansion Strategies

Capacity
Capacity increase depends on
volume and certainty of anticipated demand
strategic objectives
costs of expansion and operation

Best operating level


% of capacity utilization that minimizes unit costs

Capacity cushion
% of capacity held in reserve for unexpected
occurrences

Economies of Scale
Unit cost decreases as output volume increases
fixed costs can be spread over a larger number of
units
production or operating costs do not increase linearly
with output levels
quantity discounts are available for material
purchases
operating efficiency increases as workers gain
experience

Best Operating Level for a Hotel

Objectives of Facility Layout


Minimize material-handling costs
Utilize space efficiently
Utilize labor efficiently
Facilitate communication and interaction
Reduce manufacturing cycle time
Reduce customer service time
Eliminate wasted or redundant movement

Objectives of Facility Layout


Facilitate entry, exit, and placement of material,
products, and people
Incorporate safety and security measures
Promote product and service quality
Encourage proper maintenance activities
Provide a visual control of activities
Provide flexibility to adapt to changing conditions
Increase capacity

Basic Layouts
Process layouts
group similar activities together according to process or
function they perform

Product layouts
arrange activities in line according to sequence of operations
for a particular product or service

Fixed-position layouts
are used for projects in which product cannot be moved

Process layout
A process layout is characteristic of job shops
production, which serve different customers with
different needs
The volume of each customer is low and sequence
of operations required to complete a customers
order vary considerably
Grouping of like machines in one department

A quantity of material is issued to a machine which performs


the first operation. This machine may be situated anywhere in
the factory.
For the next operation, a different machine may be required,
which may be situated in another part of the factory
Thus, material would move long distances and along crossing
paths
If required, material may be taken to a separate building
If machine in one department is engaged , the partly finished
material awaiting for operation may be taken to store
Machines in each department attend to any product that is
taken to them and are therefore general purpose machine

Process Layout in Services


Womens
department

Shoes

Womens
dresses

Cosmetics
and jewelry

Womens
sportswear

Entry and
display area

Housewares

Childrens
department

Mens
department

Manufacturing Process Layout

Advantages :
Greater flexibility in operation
Reduced investment on machines
Scope for expansion
Better utilization of men and machines
Easy to handle breakdown of machines
Greater incentive to individual worker to increase
performance
Disadvantages :
Inefficiency as jobs or customers do not flow to the
system in an orderly manner
Time required is more as each new arrival require a
new setup differently for processing requirements
and more work in progress has to travel from place
to place Difficulty in movement of materials
More floor space

Product layout
Known as assembly lines
Arrangement of activities and machines in a line according to the
sequence of operations that need to be performed to assemble a
particular product
Materials are fed into the first machine and finished products come
out
Partly finished goods travel automatically throughout processes
Each product has its own line specifically designed to meet its
requirements
Conveyors are most common material handling equipment
Product layouts are suitable for mass production or repetitive
operations in which demand is stable and volume is high

A Product Layout
In

Out

Advantages :
Efficiency increases
Reduction in material handling cost
Economy in manufacturing time
Layout facilitates better control
Work in progress is reduced and investment on that
can be minimized
Disadvantages :
Inflexibility
Expensive
Difficulty in supervision
Any breakdown can disturb the whole system

Comparison of Product
and Process Layouts
Description
Description

Type
Type of
of process
process

Product
Product
Demand
Demand
Volume
Volume
Equipment
Equipment

Product

Process

Sequential
arrangement of
activities
Continuous, mass
production, mainly
assembly

Functional
grouping of
activities
Intermittent, job
shop, batch
production, mainly
fabrication
Varied, made to
order
Fluctuating
Low
General purpose

Standardized,
made to stock
Stable
High
Special purpose

Comparison of Product
and Process Layouts
Product
Workers
Workers
Inventory
Inventory

Limited skills
Low in-process, high
finished goods
Small
Storage
Storage space
space
Material
Material handling Fixed path (conveyor)
Layout
Layout decision
decision Line balancing
Equalize work at each
Goal
Goal
station
Efficiency
Advantage
Advantage

Process
Varied skills
High in-process, low
finished goods
Large
Variable path (forklift)
Machine location
Minimize material
handling cost
Flexibility

Fixed-Position Layouts
Typical of projects
Fragile, bulky, heavy items
Equipment, workers & materials brought to site
Low equipment utilization
Highly skilled labor
Typically low fixed cost
Often high variable costs

7-21

Forklift

7-22

Designing Process Layouts


Goal: minimize material handling costs
Block Diagramming
minimize nonadjacent loads
use when quantitative data is available

Relationship Diagramming
based on location preference between areas
use when quantitative data is not available

Block Diagramming
Unit load
quantity in which
material is normally
moved

Nonadjacent load
distance farther
than the next block

Steps
calculate composite (two
way) movements
develop trial layouts
minimizing number of
nonadjacent loads

Block Diagramming: Example


Load Summary Chart
1

FROM/TO

DEPARTMENT

Department

1
2
3
4
5

100

50
200

60
100

50

4
50
40

50
60

Block Diagramming: Example


2
2
1
1
4
3
2
3
1
1

3
4
3
2
5
5
5
4
4
5

200 loads
150 loads
110 loads
100 loads
60 loads
50 loads
50 loads
40 loads
0 loads
0 loads

Nonadjacent Loads
110+40=150
110

100
150

4
Grid 1

60

2
50

200
50

5
40

Block Diagramming: Example


2
2
1
1
4
3
2
3
1
1

3
4
3
2
5
5
5
4
4
5

200 loads
150 loads
110 loads
100 loads
60 loads
50 loads
50 loads
40 loads
0 loads
0 loads

Nonadjacent Loads: 0

100

110

200 50

3
Grid 2

150

4
40 60

50

Relationship Diagramming
Schematic diagram that uses
weighted lines to denote
location preference
Muthers grid
format for displaying manager
preferences for department
locations

Relationship Diagramming

Production
Offices
Stockroom
Shipping and
receiving
Locker room
Toolroom

O
U
A
U
O

A
O
U
O

A
E
I
O
U
X

I
X
O

E
U

Absolutely necessary
Especially important
Important
Okay
Unimportant
Undesirable

Relationship Diagramming
(a) Relationship diagram of original layout

Offices

Stockroom

Locker
room

Toolroom

Shipping
and
receiving

Production

Key: A
E
I
O
U
X

Relationship Diagramming
(b) Relationship diagram of revised layout

Stockroom

Offices

Toolroom

Shipping
and
receiving

Production

Locker
room

Key: A
E
I
O
U
X

Computerized Layout Solutions


CRAFT
Computerized Relative Allocation of Facilities Technique

CORELAP
Computerized Relationship Layout Planning

PROMODEL and EXTEND


visual feedback
allow user to quickly test a variety of scenarios

Three-D modeling and CAD


integrated layout analysis
available in VisFactory and similar software

Types of Store Layouts

Designing Service Layouts


Must be both attractive and functional
Free flow layouts
encourage browsing, increase impulse purchasing, are
flexible and visually appealing

Grid layouts
encourage customer familiarity, are low cost, easy to
clean and secure, and good for repeat customers

Loop and Spine layouts


both increase customer sightlines and exposure to
products, while encouraging customer to circulate
through the entire store

Hybrid or combined layout


A combination of the product and process layout
It is possible to have both types of layout in an
efficiently combined form if the products
manufactured are somewhat similar and not
complex

Cellular Layouts
Cellular layouts:
group dissimilar machines into work centers (called cells)
that process families of parts with similar shapes or
processing requirements
1. Identify families of parts with similar flow paths
2. Group machines into cells based on part families
3. Arrange cells so material movement is minimized
4. Locate large shared machines at point of use

Parts Families

A family of
similar parts

A family of related
grocery items

Original Process Layout


Assembly

7
8

5
2

12

10
3

11
Raw materials

Part Routing Matrix


Parts

A
B
C
D
E
F
G
H

Figure 5.8

Machines
4 5 6 7

8 9 10 11 12

x
x

x
x

x
x

x
x
x
x

x
x

x
x

x
x
x

x
x

x
x

Revised Cellular Layout


Assembly
8

10

12
11

Cell 1

Cell 2

Cell 3
7

A B C
Raw materials

Reordered Routing Matrix


Parts

Machines
8 10 3 6

A
D
F
C
G
B
H
E

x
x
x

x
x

x
x
x

x
x
x

9 5

7 11 12

x
x
x
x

x
x

x
x
x

x
x

x
x

x
x
x
x

Cellular Layouts
Advantages
Reduced material handling
and transit time
Reduced setup time
Reduced work-in- process
inventory
Better use of human
resources
Easier to control
Easier to automate

Disadvantages
Inadequate part families
Poorly balanced cells
Expanded training and
scheduling of workers
Increased capital
investment

Flexible Manufacturing Systems (FMS)


Consists of
programmable machine tools
automated tool changing
automated material handling system
controlled by computer network
Combines flexibility with efficiency
Layouts differ based on
variety of parts the system can process
size of parts processed
average processing time required for part completion

Designing Product Layouts


Objective
Balance the assembly line

Line balancing
tries to equalize the amount of work at each
workstation

Precedence requirements
physical restrictions on the order in which operations
are performed

Cycle time
maximum amount of time a product is allowed to
spend at each workstation

Line Balancing Procedure


1. Draw and label a precedence diagram
2. Calculate desired cycle time required for line
3. Calculate theoretical minimum number of workstations
4. Calculate efficiency of line

Cycle Time Example


Cd =
Cd =

production time available


desired units of output
(8 hours x 60 minutes / hour)
(120 units)

Cd =

480
120

= 4 minutes

Flow Time vs Cycle Time


Cycle time = max time spent at any station
Flow time = time to complete all stations

4 minutes

4 minutes

4 minutes

Flow time = 4 + 4 + 4 = 12 minutes


Cycle time = max (4, 4, 4) = 4 minutes

Efficiency of Line and Balance Delay


j
Efficiency

i=1

E=
where

nCa
ti
j
n
Ca
Cd

j
Min# of workstations

ti

t
i=1

N=

Cd

= completion time for element i


= number of work elements
= actual number of workstations
= actual cycle time
= desired cycle time j

Balance delay
total idle time of line = nCa -

t
i=1

Line Balancing
Work Element
A
B
C
D

Precedence

Time (Min)

A
A
B, C

0.1
0.2
0.4
0.3

Press out sheet of fruit


Cut into strips
Outline fun shapes
Roll up and package

B
0.1

0.2

D 0.3
C

0.4

Line Balancing
Work Element
A
B
C
D

Precedence

Time (Min)

A
A
B, C

0.1
0.2
0.4
0.3

Press out sheet of fruit


Cut into strips
Outline fun shapes
Roll up and package

40 hours x 60 minutes / hour


Cd =
6,000 units
0.1 + 0.2 + 0.3 + 0.4
1.0
N=
=
0.4
0.4

2400
=
6000

= 0.4 minute

= 2.5 3 workstations

Line Balancing
Workstation
1

Remaining
Time
0.3
0.1
0.0
0.1

Element
A
B
C
D

2
3

B
0.1

0.2
0.3

D
C

0.4

Remaining
Elements
B, C
C, D
D
none

Cd = 0.4
N = 2.5

Line Balancing
Work
station 1

A, B
0.3
minute

Work
station 2

C
0.4
minute

Work
station 3

Cd = 0.4
N = 2.5

0.3
minute

1.0
0.1 + 0.2 + 0.3 + 0.4
E=
=
= 0.833 = 83.3%
1.2
3(0.4)

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