Manufacturing and Process

Selection

Factors Influencing Process

Choices

Volume: Average quantity of the products produced in a

manufacturing system

Low volume: Turnkey project management firms such as L&T and BHEL
High volume: Consumer non-durable and FMCG sector firms,
Automobile, Chemical Processing
Mid-volume: Consumer durables, white goods and several industrial
products

Variety: Number of alternative products and variants of each

product that is offered by a manufacturing system
Variety of product offerings is likely to introduce variety at various
processes in the system; alternative production resources, materials,
and skill of workers

Flow: Flow indicates the nature and intensity of activities

involved in conversion of components and material from raw
material stage to finished goods stage

Relationship between
volume and variety
Hi g
h

h
g
i
H

Volume

Mass
Production
Petrochemicals,
Automobile

Variety

Mid volume
Mid variety
Motor Manufacturing
Pharmaceuticals

Project
Organisations
Turnkey Project
Execution

Processes & Operations

Systems
Available Alternatives

Two broad process classifications include

Intermittent operations produce a variety of
products in lower volumes
Repetitive operations produce one or a few
standardized products in high volume

Process Selection
Process selection is based on five
considerations
Type of process; range from
intermittent to continuous
Degree of vertical integration
Flexibility of resources
Mix between capital & human
resources
Degree of customer contact

Process Selection
Process types can be:
Project process /Job Shop make a
one-at-a-time product exactly to
customer specifications
Batch process small quantities of
product in groups or batches based on
customer orders or specifications

Process Selection

Line process large quantities of a

standard product

Continuous process very high

volumes of a fully standard product

 2007 Wiley

 2007 Wiley

 2007 Wiley

 2007 Wiley

 2007 Wiley

Between Volume and

Standardization Continuum

Differences between Intermittent

and Repetitive Operations
Decision
Product variety

Intermittent Operation
Repetitive Operation
Great

Small

Degree of standardization
Low

High

Organization of resources
Grouped by Function

Line flow

Path of products

Line flow

Varied, depends on product

Factor driving production

Customer orders

Forecast of deman

Critical resource

Labor

Capital

Type of equipment

General purpose

Specialized

Degree of automation Low

High

Throughput time

Shorter

Longer

Work-in-process inventory
More

Less

Designing Processes
Process design tools include
Process flow analysis
Process flowchart (Also used to evaluate
and improve processes.)

Design considerations include

Make-to-stock strategy
Assemble-to-order strategy
Make-to-order strategy

Process Design Tools

Process flow analysis is a tool used to
analyze and document the sequence of
steps within a total process. Usually first
step in Process Reengineering.

Process Re-engineering is a
structured approach used when
major business changes are required
as a result of:
Major new products
Quality improvement needed
Better competitors
Inadequate performance

Flowchart Symbols
Tasks or operations

Decision Points

Examples:
Examples:Giving
Givingan
an
admission
admissionticket
ticketto
toaa
customer,
customer,installing
installingaa
engine
enginein
inaacar,
car,etc.
etc.
Examples:
Examples:How
Howmuch
much
change
changeshould
shouldbe
begiven
givento
toaa
customer,
customer,which
whichwrench
wrench
should
shouldbe
beused,
used,etc.
etc.

Process Analysis Terms

Process: Is any part of an organization
that takes inputs and transforms them
into outputs

Flowchart Symbols
Storage areas or
queues

Flows of materials or
customers

Examples:
Examples:Sheds,
Sheds,lines
linesof
of
people
waiting
for
a
service,
people waiting for a service,
etc.
etc.

Examples:
Examples:Customers
Customersmoving
moving
to
a
seat,
mechanic
getting
to a seat, mechanic gettingaa
tool,
tool,etc.
etc.

Process Analysis Terms

Cycle Time: Is the average successive
time between completions of
successive units

Example: Flowchart of Student

Going to School
Go to school
today?

Yes

Drive to
school

Walk to
class

No

Goof off

Process Analysis
Utilization: Is the ratioTerms
of the time that a
resource is actually activated relative to
the time that it is available for use

Types of Processes

Single-stage Process
Stage 1

Multi-stage Process
Stage 1

Stage 2

Stage 3

Other Process Terminology

Blocking
Occurs when the activities in a stage must stop because there is
no place to deposit the item just completed
Starving
If an employee is waiting at a work station and no work is coming
to the employee to process.

Other Process Terminology

Bottleneck

If an employee works too slow in a multi-stage process,

work will begin to pile up in front of that employee. In
this is case the employee represents the limited capacity
causing the bottleneck.

Pacing

Refers to the fixed timing of the movement of items

through the process

A buffer refers to a storage area between stages

where the output of a stage is placed prior to
being used in a downstream stage
Make-to-order
Only activated in response to an actual order

Make-to-stock
Customer orders are served from target stocking level

Process Design Tools

2007 Wiley

Process Performance Metrics

Operation time = Setup time + Run time
Throughput time = Average time for a unit to
move through the system
Velocity =
Throughput time
Value-added time
Cycle time = Average time between completion
of units
Throughput rate =
1
Cycle time

Efficiency =
Actual output
Standard Output

Process Performance Metrics (Cont.)

Productivity = Output
Input
Utilization = Time Activated
Time Available

Process Throughput Time Reduction

Perform activities in parallel
Change the sequence of activities
Reduce interruptions

Process Performance
Metrics

Linking Product Design &

Process Selection
Product design and process selection
directly linked
Type of product selected defines type
of operation required
Type of operation available defines
broader organizational aspects such
as
Equipment required
Facility arrangement
Organizational structure

Linking Design & Process

Selection
The organizational strategy drives decisions
about competitive priorities.
Competitive priorities drive decisions about
product design.
Product design decisions drive process design
decisions.
Product and process decisions drive
operations planning and control decisions.

Product and Service

Strategy
Type of operation is directly related
to product and service strategy
Three basic strategies include
Make-to-stock; in anticipation of
demand
Assemble-to-order; built from
standard components on order
Make-to-order; produce to customer
specification at time of order

Facility Layout and Process Choice

2007 Wiley

Facility Location

BMW
In the late 1980s fluctuating exchange rates and rising
costs convinced BMW that it was time to consider operating
a new production facility outside the European borders.
A blank page approach was used to compile a list of 250
potential worldwide sites. Analysis pared the list down to 10
options; a location in the United States was preferred due to
its proximity to a large market segment for BMWs
automobiles.
BMW spent 3 1/2 years considered the labor climate, port
and road access, geographical requirements and
constraints, airport access, and its relations with the
governments.
The plant was located in Spartanburg, SC, and now employs
approximately 4,700 workers who produce more than 500
vehicles a day.

LI & FUNG
European
retailer order
10,000
garments

5 weeks later
10,000
garments reach
Europe

Buy yarn from a

Korean mfgr.

Manufacture
garments in
Thailand

Weave & dye in

Taiwan

Buy the best

Japanese zipper
& button from
Chaina

Ellora Times
In 2001, Ellora Time Pvt. Ltd. (Ellora), a company based in
Gujarat, India, was the world's largest manufacturer of
clocks. It also manufactured calculators, telephones,
timepieces and educational toys. Ajanta and Orpat were
closely held Ellora companies with a combined investment of
Rs 2 billion.
Almost all their products, marketed through a countrywide
network of 25,000 dealers and 180 service stations, were
leaders in their respective categories. For the year 1999-00,
the group recorded a combined turnover of over Rs 2.50
billion. Both Ajanta and Orpat received awards by the
Government of India for superior exports performance
throughout the 1990s. Ajanta, an ISO 9002 certified
company, had even received the Best Electronics
Industry'award many times.

Ellora Times
In early 2001, Ellora shocked the corporate
world by announcing its decision to shift
its manufacturing activities to China.

Mitshubishi at Haldia
Hero Hona at Uttranchal
Wipro in Himachal
Tata in Singur
Bio-con in Andhrapradesh

How Location
fits the Operations Management
Philosophy

Operations As a Competitive
Weapon
Operations Strategy
Process Strategy
Project Management
Process Analysis
Process Performance and Quality
Supply Chain Strategy
Constraint Management
Location
Process Layout
Inventory Management
Lean Systems
Forecasting
Sales and Operations Planning
Resource Planning
Scheduling

Location Factors

Factors Affecting
the Location Decision
Economic
Site acquisition, preparation and
construction costs
Labor costs, skills and availability
Utilities costs and availability
Transportation costs
Taxes

Factors Affecting
the Location Decision
Non-economic
Labor attitudes and traditions
Training and employment services
Communitys attitude
Schools and hospitals
Recreation and cultural attractions
Amount and type of housing available

Facility Types and Their

Dominant Locational Factors
Heavy Manufacturing
Near their raw material sources
Abundant supply of utilities
Land and construction costs are inexpensive

Light Manufacturing
Availability and cost of labor

Warehousing
Proximity to transportation facilities
Incoming and outgoing transportation costs

Facility Types and Their

Dominant Locational Factors
R&D and High-Tech Manufacturing
Ability to recruit/retain scientists, engineers,
etc.
Near companies with similar technology
interests

Retailing and For-Profit Services

Near concentrations of target customers

Government and Health/Emergency

Services
Near concentrations of constituents

Some Reasons the

Facility Location Decision
Arises

Changes in the market

Expansion
Contraction
Geographic shift

Changes in inputs
Labor skills and/or costs
Materials costs and/or availability
Utility costs

Some Reasons the

Facility Location Decision
Arises

Changes in the environment

Regulations and laws
Attitude of the community

Changes in technology

Analyzing Service Location

Decisions

Consumer Behavior
Research
Market Research

Why do customers buy our

products and services?

Who are our customers?

What are their characteristics?

Data Gathering for

Where are our customers concentrated?
Each Location Alternative What are their traffic/spending patterns?
Revenue Projections for What are the economic projections?
Each Location Alternative What is the time-phased revenue?
Profit Projections for
What are the projected revenues
Each Location Alternative less time-phased operating costs?

Analyzing Industrial Facility

Locations
Locating a Single Facility
A simple way to analyze alternative
locations is conventional cost analysis

Locating Multiple Facilities

More sophisticated techniques are often
used:
Linear programming, computer simulation,
network analysis, and others

Reasons that Companies

Globalize
(Advantages of Globalization)
To get access to cheaper labor
To get access to materials
To enter new markets and gain
market knowledge
To avoid paying tariffs

Geographical Information
Systems and Location
Decisions
Geographical information system (GIS) is a
system of computer software, hardware, and data
that the firms personnel can use to manipulate,
analyze, and present information relevant to a
location decision. It can be used to:
Store databases
Display maps
Create models that can take information from existing
datasets, apply analytic functions, and write results into
new derived datasets.

Together, these three functionalities of data storage,

map displays, and modeling are critical parts of an
intelligent GIS, used to a varying extent in all GIS
applications.

Starbucks
locations

Population density per square

kilometer for each census
subdivision.

Per Capita Household

Income Map

Facility Location Models

Location Analysis Methods

Analysis should follow 3 step
process:
Step 1: Identify dominant location factors
Step 2: Develop location alternatives
Step 3: Evaluate locations alternatives

Location Analysis Methods

Factor rating method

Load-distance model
Center of gravity approach
Break-even analysis
Transportation method
Dimensional Analysis

Location Rating Factor

Identify important factors

Subjectively score each factor (0 - 100)
Weight factors (0.00 - 1.00)
Sum weighted scores

Location Factor Rating:

Example
SCORES (0 TO 100)
LOCATION FACTOR
Labor pool and climate
Proximity to suppliers
Wage rates
Community environment
Proximity to customers
Shipping modes
Air service

Rating
90
60
45
45
30
15
15

Normalized

Location Factor Rating:

Example
SCORES (0 TO 100)
LOCATION FACTOR
Labor pool and climate
Proximity to suppliers
Wage rates
Community environment
Proximity to customers
Shipping modes
Air service

Rating
90
60
45
45
30
15
15

Normalized
.30
.20
.15
.15
.10
.05
.05

Location Factor Rating:

Example
SCORES (0 TO 100)
LOCATION FACTOR
Labor pool and climate
Proximity to suppliers
Wage rates
Community environment
Proximity to customers
Shipping modes
Air service

Site 1
80
100
60
75
65
85
50

Location Factor Rating:

Example
SCORES (0 TO 100)
LOCATION FACTOR
Labor pool and climate
Proximity to suppliers
Wage rates
Community environment
Proximity to customers
Shipping modes
Air service

Site 1

Site 2

80
100
60
75
65
85
50

65
91
95
80
90
92
65

Location Factor Rating:

Example
SCORES (0 TO 100)
LOCATION FACTOR
Labor pool and climate
Proximity to suppliers
Wage rates
Community environment
Proximity to customers
Shipping modes
Air service

Site 1

Site 2

Site 3

80
100
60
75
65
85
50

65
91
95
80
90
92
65

90
75
72
80
95
65
90

Location Factor Rating:

Example
SCORES (0 TO 100)
LOCATION FACTOR
Labor pool and climate
Proximity to suppliers
Wage rates
Community environment
Proximity to customers
Shipping modes
Air service

WEIGHT

Site 1

Site 2

Site 3

.30
.20
.15
.15
.10
.05
.05

80
100
60
75
65
85
50

65
91
95
80
90
92
65

90
75
72
80
95
65
90

Location Factor Rating

WEIGHTED SCORES
Site 1
24.00
20.00
9.00
11.25
6.50
4.25
2.50
77.50

Site 2
19.50
18.20
14.25
12.00
9.00
4.60
3.25
80.80

Site 3
27.00
15.00
10.80
12.00
9.50
3.25
4.50
82.05

Site 3 has the highest

factor rating

Example
An electronics manufacturer must expand by building
a second facility. The search has been narrowed to four
locations, all of which are acceptable to management
in terms of dominant factors. Assessment of these
sites in terms of seven location factors is shown below.

Example
SCORES (0 TO 100)
LOCATION FACTOR
Nearness to the port
Proximity to suppliers
Availability of skilled labor
Govt. Policies
Projected cost of operation
Shipping modes
Educational Infrastructure

Score
80
70
90
50
60
70
40

Site 1
75
60
50
70
70
80
60

Site 2

Site 3

70
80
70
45
60
90
80

90
85
85
60
80
70
80

Center of Gravity Method

The Center of Gravity Method is a tool
that seeks to compute geographic
coordinates for a potential single new
facility that will minimize costs.
The Center of Gravity Method takes
many factors into account including:
Markets
Volume of goods shipped
Shipping costs
64

Center-of-Gravity
Technique
Locate facility at center of geographic area
Based on weight and distance traveled
establish grid-map of area
Identify coordinates and weights shipped for
each location

Grid-Map Coordinates
y
2 (x2, y2), W2

y2
y1

1 (x1, y1), W1
3 (x3, y3), W3

y3

x1

x2

x3

xi, yi =
coordinates of existing
facility i
Wi =
annual weight shipped
from facility i

Grid-Map Coordinates
y

xW
i

x=

i=1

1 (x1, y1), W1

i=1
y=

y1

yW

i=1

2 (x2, y2), W2

y2

i=1

where,

3 (x3, y3), W3

y3

x1

x2

x3

x, y =
coordinates of new
facility at center of gravity
xi, yi =
coordinates of existing
facility i
Wi =
annual weight shipped
from facility i

Example
x
y
Wt

A
200
200
75

B
100
500
105

C
250
600
135

D
500
300
60

Center-of-Gravity
Technique: Example
y
700
600

Miles

500

C
(135)

B
(105)

400
300
200

x
y
Wt

D
(60)

A
(75)

100
0

100 200 300 400 500 600 700 x

Miles

A
200
200
75

B
100
500
105

C
250
600
135

D
500
300
60

Center-of-Gravity Technique:
Example (cont.)
n
xW
i
i
i=1

x=
= 238n

(200)(75) + (100)(105) + (250)(135) + (500)(60)

=75 + 105 + 135 + 60

Wi
i=1

n
yW
i
i
i=1

y=
n
= 444

Wi
i=1

(200)(75) + (500)(105) + (600)(135) + (300)(60)

=75 + 105 + 135 + 60

Center-of-Gravity
Technique: Example (cont.)
y
700
600

Miles

500

C
(135)

B
(105)

400
300
200

x
y
Wt

B
100
500
105

Center of gravity (238, 444)

D
(60)

(75)

100
0

A
200
200
75

100 200 300 400 500 600 700 x

Miles

C
250
600
135

D
500
300
60

Center
of
Gravity
with
Excel

Copyright 2006 John

Wiley & Sons, Inc.

Supplement 7-72

Example

l x 20 11 15 12 30 4
x

8.0
20 15 30
l
l y 20 8.5 15 9.5 30 1.5
y

5.5
20 15 30
l
i

Finding the Center of Gravity for Health Watch

2007 Pearson Education

Example
Existing
Facility

Annul load

Cost of
moving one
unit

Coordinate
locations

279

10

(20,30)

473

10

(70,10)

350

10

(50,40)

266

10

(10,80)

Load Distance
Method

Euclidean or rectilinear distance measure may be

used.

Euclidean distance between points A and B is the length of the

hypotenuse of a right triangle, or

where dAB

= distance between points A and B

Xa = x-coordinate of point A
Ya = y-coordinate of point A
Xb = x-coordinate of point B
Yb = y-coordinate of point B

Rectilinear distance measures distance between two points with a

series of 900 turns as city blocks. Essentially, this distance is the sum
of the two dashed lines representing the base and side of the triangle
in figure . The distance traveled in the x-direction is the absolute value
of the difference in x-coordinates. Adding this result to the absolute
value of the difference in the y-coordinates gives

Distance Measures
What is the distance between (20,10) and
(80,60)?
Euclidian Distance
dAB =

(20 80)2 + (10 60)2

= 78.1
Rectilinear Distance
dAB = |20 80| + |10 60| = 110

Load-Distance Technique

Compute (Load x Distance) for each site

Choose site with lowest (Load x Distance)
Distance can be actual or straight-line

Load-Distance Calculations
n

LD =

li

di

di

i=1

where,
LD =

ld

load-distance value
load expressed as a weight, number of trips or units
being shipped from proposed site and location i
distance between proposed site and location i
(xi - x)2 + (yi - y)2

or Ixi - xI + Iyi - yI

where,
(x,y) = coordinates of proposed site
(xi , yi) = coordinates of existing facility

Load-Distance: Example
Potential Sites
Site
X
Y
1
360
180
2
420
450
3
250
400

A
200
200
75

X
Y
Wt

Suppliers
B
C
100
250
500
600
105
135

D
500
300
60

Compute distance from each site to each supplier

Site 1 dA =

(xA - x1)2 + (yA - y1)2

(200-360)2 + (200-180)2 = 161.2

dB =

(xB - x1)2 + (yB - y1)2

(100-360)2 + (500-180)2 = 412.3

dC = 434.2

dD = 184.4

Load-Distance: Example
(cont.)
Site 2 dA = 333

dB = 323.9 dC = 226.7 dD = 170

Site 3 dA = 206.2 dB = 180.4 dC = 200

dD = 269.3

Compute load-distance

LD =

l i di
i=1

Site 1 = (75)(161.2) + (105)(412.3) + (135)(434.2) + (60)(434.4) = 125,063

Site 2 = (75)(333) + (105)(323.9) + (135)(226.7) + (60)(170) = 99,791
Site 3 = (75)(206.2) + (105)(180.3) + (135)(200) + (60)(269.3) = 77,555*

* Choose site 3

Example

Example: Matrix Manufacturing is considering where to

locate its warehouse in order to service its four Ohio
stores located in Cleveland, Cincinnati, Columbus,
Dayton. Two sites are being considered; Mansfield and
Springfield, Ohio. Use the load-distance model to make
the decision.

Break-Even Analysis
Break-even analysis can help a manager
compare location alternatives on the
basis of quantitative factors that can be
expressed in terms of total cost.
1. Determine the variable costs and fixed
costs for each site.
2. Plot the total cost linesthe sum of
variable and fixed costsfor all the sites on
a single graph
3. Identify the approximate ranges for which
each location has the lowest cost.
4. Solve algebraically for the break-even
points over the relevant ranges.

Break-Even Analysis
An operations manager has narrowed the search for
a new facility location to four communities.
The annual fixed costs (land, property taxes,
insurance, equipment, and buildings) and the
variable costs (labor, materials, transportation, and
variable overhead) are shown below.
Total costs are for 20,000 units.
Community

Fixed Costs
per Year

Variable Costs
per Unit

Total Costs
(Fixed + Variable)

A
B
C
D

$150,000
$300,000
$500,000
$600,000

$62
$38
$24
$30

$1,390,000
$1,060,000
$ 980,000
$1,200,000

Example

Mile-High Beer
The operations manager for Mile-High Beer has narrowed
the search for a new facility location to seven communities.
Annual fixed costs (land, property taxes, insurance,
equipment, and buildings) and variable costs (labor,
materials, transportation, and variable overhead) are
shown below.

Example
Santro Electronics is considering 2
locations for the audio equipment factory
Ahmedabad & Chennai. At Ahmedabad
fixed cost is estimated at Rs.1 million and
the variable cost at Rs.1,200 per audio
equipment. At Chennai fixed cost is Rs.
1.2 million and variable cost is Rs. 1100
per audio equipment. The selling price of
the equipment will be Rs. 3000 per unit
irrespective of the location. Decide which
location is the best.

The Transportation Method

The transportation method is a
quantitative approach that can help solve
multiple-facility location problems.
The transportation method does not solve all
facets of the multiple-facility location
problem.
It utilizes linear programming to minimize the
cost of shipping products from two or more
plants, or sources of supply, to two or more
warehouses, or destinations.

The Transportation Method

The Sunbelt Pool Company has a plant in Phoenix and three
warehouses. It is considering building a new 500-unit plant because
business is booming. One possible location is Atlanta.
The cost to ship one
unit from Atlanta to
San Antonio.

Initial Tableau

Example

Dimensional Analysis

Considers both tangible and intangible

costs
Intangibles could include (lack of ) facilities
e.g. for education, shopping, recreation,
social life.
Intangibles could be quantified on a scale.
Weightages could be assigned to each
cost.
A pair of sites is compared by a ratio.

Formula for Dimensional

Analysis

If C are costs, M & N are the two sites,

and w are weightages, the relative
demerit of site M to N is:
(C1M

/ C 1N)

where,

W1

C zM

W2

(C2M / C2N)

X .. X

Wz

(CzM / CzN)

is the cost z for site M.

If the above is >1, site N is

superior.

Example
Costs Lbour

Power

Site

Education
al
Facilities
for
children's
(Score)

Recreati
onal
Facilities
(Score)

Rs.1.50.00 Rs.40,00,0
0
00

Rs.1.00.00 Rs.25,0000
0
0

Weightag
e

FACILITY LAYOUT
PROBLEM

FACILITY LAYOUT
PROBLEM
Once a firm has
decided where a
facility will be
located, the next
important decision
is the Arrangement
of people and
Equipment within
the facility.

FACILITY LAYOUT
PROBLEM
Facility Layout problem involves
the location of departments (or
sections) within the facility AND
the arrangement of people and
equipment within each
department.
.

FACILITY LAYOUT
PROBLEM
The layout decision will certainly affect
the
Flow of materials
In-plant Transportation cost
Equipment utilization
General productivity and
effectiveness of the business.

FACILITY LAYOUT
PROBLEM
Usually the layout is planned to minimize a
particular criterion:
Minimizing total traveling time, total cost,
total delays, etc.
There are also situations in which the
layout may be designed to maximize a
criterion:
Maximize quality, flexibility, or space
utilization.

Costs associated with a plant

layout
Costs of customer dissatisfaction due to
poor service (delivery, responsiveness,
quality, flexibility)
Costs of movement of materials
Costs of space
Costs of spoilage of materials
Costs of employee dissatisfaction
Costs of changes required with
operational changes

Basic Production Layout Formats

Process Layout (also called job-shop
or functional layout)
Product Layout (also called flow-shop
layout)
Group Technology (Cellular) Layout
Fixed-Position Layout

Process Layout
Similar pieces of equipment that
perform similar functions are
grouped together. For example;
all drill machines are grouped and
placed together.

Process Layout
An example

Product A
Product B

Product C
L
M

Product Layout
The pieces of equipment
required to make a Particular
product are grouped together, as
in an Automobile assembly line.

Product Layout

Product
A
Product
B
Product
C

7-14

Step 1

Step 2

Step 3

Step 4

Step 1

Step 2

Step 3

Step 4

L
Step 1

D
Step 2

Step 3

Step 4

Step 5

Fixed Layout
The equipment is brought to the
object being processed, and the
object does not move. Example;
house construction.

Cellular Manufacturing (CM)

Layouts
Cellular manufacturing is a type of
layout in which machines are grouped
into what is referred to as a cell.
Groupings are determined by the
operations needed to perform work
for a set of similar items, or part
families that require similar
processing.

Process Layout
Example
Frontec Company wants to arrange Four of its
departments in a Row so that the Total
Distance Traveled between Departments is
minimized.
This part of the building will contain four
departments arranged in a row.
Frontec wishes to minimize the total daily
inter-departmental distance traveled.
The number of daily communications between
each pair of department is shown below:

Example

Assume that adjacent

departments are 20 feet apart.

Example
We will use a trial-and-error approach
to this problem.
Assume that we selected the following
configuration for the departments: A-BC-D.
For this configuration, Total
communication cost (based on
distance) is as follows:

Example

Example

Example
In terms of total daily
communication distance, (B-A-CD) is the preferred alternative.
But the firm has to consider all
of the 24 (4! = 4x3x2x1) possible
configurations before it knows if
this is the optimal configuration.

Example
This trial-and-error approach
becomes time-consuming as the
number of departments
increases AND It also becomes
complex when the cost of
communications vary between
departments.

Computerized Relative
Allocation of Facilities(CRAFT)
In CRAFT an initial feasible layout is
formed and a series of improvement
opportunities explored through a pir
wise exchange of departments.
If there are n departments a pair
wise comparison involves n(n-1)/2
evaluations.

Systematic Layout
Planning
Systematic Layout Planning (SLP) is
an organized approach to facility
Layout planning.

Qualitative Approach
Value

Closeness

Absolutely necessary

Especially Important

Important

OK

Unimportant

Undesirable
Software packages ALDEP & CORELAP are available for qualitative
design.

Qualitative Approach

Software packages ALDEP & CORELAP are available for

qualitative design.

Example
A small accounting Firm, GUNTA
Accounting, has rented Space in a
new one-floor building.
The firm has allocated 6000 square
meter to its seven departments as
follows:

Example

Example

Example

Example

Example
This Activity Relationship Diagram is
essentially an Illustration of the
Information Contained in the Activity
Relationship Chart.
All departments in this diagram are
Represented by equal size boxes.
The next step is to anticipate the
space required for each Department.

Example
Since the space assignments are
given before, the following Activity
Relationship Diagram shows the
relative Sizes of Each Department:

Example

Example
In this stage, there are no restrictions
on the length and width of each
department
In the final step, we should develop
and evaluate several alternative
layouts, while keeping in mind the
Practical Limitations.

Example
Some examples of Practical Limitations in
this case were as follows:
1- It is considered that offices for partners
(2), the meeting room (7) and the
reception area (1) should be close to each
other.
2- It is important that the juniors (4) and
the managers (3) be close together.

Product Layout

LINE BALANCING
Essentially ,the layout design seeks to identify
minimum number of resources required to meet
a targeted production rate and the order in
which this sequences are to be used. In the
process it seeks to establish a balance among
the resources so that the production is
Line Balancing is a method by which tasks are
optimally combined without violating the
precedence constraint and a certain number of
workstation is designed to complete the task.

Assembly Lines Balancing Concepts

Question:
Question: Suppose
Suppose you
you load
load work
work into
into the
the three
three
work
workstations
stationsbelow
belowsuch
suchthat
thateach
eachwill
willtake
takethe
the
corresponding
corresponding number
number of
of minutes
minutes as
as shown.
shown.
What
What is
is the
the cycle
cycle time
time of
of this
this line?
line? Determine
Determine
the
the interval
interval between
between producton
producton of
of two
two
successive
successivecomponents?
components?
Minutes
per Unit

Station 1

Station 2

Station 3

Answer:
Answer:One
Onecomponent
componentwill
willcome
comeout
outof
ofthe
the
system
systemonly
onlyevery
every77minutes.
minutes.This
Thismeasure
measureis
is
known
knownas
ascycle
cycletime.
time.

Designing Product Layouts

Step
Step
Step
Step

1: Identify tasks & immediate predecessors

2: Determine the desired output rate
3: Calculate the cycle time
4: Compute the theoretical minimum number
of workstations
Step 5: Assign tasks to workstations (balance the
line)
Step 6: Compute efficiency, idle time & balance
delay

Assembly Line Balancing

Precedence diagram:
Circles=tasks
Arrows = required sequence.

Assembly Line Balancing

1. Determine cycle time: Cycle time could be
actual or desires

available time sec./day

Cycle time (sec./unit)
desired/actual output units/hr
1. Determine required workstations
(theoretical minimum)
task_times
Nt
cycle_time

Assembly Line Balancing

5. Evaluate line efficiency:

T
E
; Na actual_wor kstations
NaC

available time
Maximum output
bottleneck task time

Balance delay (%) is the amount by

which the line falls short of 100%

Example
A factory working two shifts each of
eight hour produces 24000 electric bulbs
using a set of workstations. Compute the
actual cycle time of the plant operation.
There are 8 tasks required to
manufacture the bulbs. The sum of all
task time is equal to 12 seconds. How
many workstations are required to
maintain the level of production.

Example of Line Balancing

Youve just been assigned the job a setting
up an electric fan assembly line with the
following tasks:
Task
A
B
C
D
E
F
G
H

Time (Mins)
2
1
3.25
1.2
0.5
1
1
1.4

Description
Assemble frame
Mount switch
Assemble motor housing
Mount motor housing in frame
Attach blade
Assemble and attach safety grill
Attach cord
Test

Predecessors
None
A
None
A, C
D
E
B
F, G

Example of Line Balancing:

Structuring the Precedence Diagram
Task Predecessors
A
None
B
A
C
None
D
A, C
A

Task Predecessors
E
D
F
E
G
B
H
F, G
B

G
H

Example of Line Balancing:

Precedence Diagram
Question:
Question: Which
Which process
process step
step defines
defines the
the
maximum
maximum rate
rate of
of production?
production?

2
A

1
B

1
G

3.25

1.2

.5

1.4
H

Answer:
Answer: Task
Task CC is
is the
the cycle
cycle time
time of
of the
the line
line
and
and therefore,
therefore, the
the maximum
maximum rate
rate of
of
production.
production.

Example of Line Balancing:

Determine

Cycle Time
Question:
Question: Suppose
Suppose we
we want
want to
to
assemble
assemble 100
100 fans
fans per
per day.
day. What
What
would
would our
our cycle
cycle time
time have
have to
to be?
be?
Answer:
Answer:

Production
time
per
period
Production
time
per
period
Required
RequiredCycle
CycleTime,
Time, CC== Required output per period
Required output per period

420
mins
//day
420
mins
day = 4.2 mins / unit
CC==
= 4.2 mins / unit
100
units
/
day
100 units / day

Example of Line Balancing: Determine

Theoretical Minimum Number of
Workstations
Question:
Question: What
What is
is the
the theoretical
theoretical minimum
minimum
number
number of
of workstations
workstations for
for this
this problem?
problem?
Answer:
Answer:

Theoretical
TheoreticalMin.
Min. Number
Numberof
ofWorkstations,
Workstations, NNt t
Sum
of
task
times
(T)
Sum
of
task
times
(T)
NNt ==
t
Cycle
Cycletime
time(C)
(C)

11.35
mins
//unit
11.35
mins
unit = 2.702, or 3
N
=
Nt t = 4.2 mins / unit = 2.702, or 3
4.2 mins / unit

2
A

1
B

1
G

3.25

1.2

.5

Station 1

1.4
H

Task
A
C
D
B
E
F
G
H

Station 2

Followers
6
4
3
2
2
1
1
0

Time (Mins)
2
3.25
1.2
1
0.5
1
1
1.4

Station 3

2
A

1
B

1
G

3.25

1.2

.5

Station 1
A (4.2-2=2.2)

1.4
H

Task
A
C
D
B
E
F
G
H

Station 2

Followers
6
4
3
2
2
1
1
0

Time (Mins)
2
3.25
1.2
1
0.5
1
1
1.4

Station 3

2
A

1
B

1
G

3.25

1.2

.5

Station 1
A (4.2-2=2.2)
B (2.2-1=1.2)
G (1.2-1= .2)
Idle= .2

1.4
H

Task
A
C
D
B
E
F
G
H

Station 2

Followers
6
4
3
2
2
1
1
0

Time (Mins)
2
3.25
1.2
1
0.5
1
1
1.4

Station 3

2
A

1
B

1
G

3.25

1.2

.5

Station 1
A (4.2-2=2.2)
B (2.2-1=1.2)
G (1.2-1= .2)
Idle= .2

1.4
H

Task
A
C
D
B
E
F
G
H

Station 2
C (4.2-3.25)=.95

Followers
6
4
3
2
2
1
1
0

Time (Mins)
2
3.25
1.2
1
0.5
1
1
1.4

Station 3

2
A

1
B

1
G

3.25

1.2

.5

Station 1

1.4
H

Task
A
C
D
B
E
F
G
H

Station 2

A (4.2-2=2.2)
B (2.2-1=1.2)
G (1.2-1= .2)

C (4.2-3.25)=.95

Idle= .2

Idle = .95

Followers
6
4
3
2
2
1
1
0

Time (Mins)
2
3.25
1.2
1
0.5
1
1
1.4

Station 3

2
A

1
B

1
G

3.25

1.2

.5

Station 1

1.4
H

Task
A
C
D
B
E
F
G
H

Station 2

A (4.2-2=2.2)
B (2.2-1=1.2)
G (1.2-1= .2)

C (4.2-3.25)=.95

Idle= .2

Idle = .95

Followers
6
4
3
2
2
1
1
0

Time (Mins)
2
3.25
1.2
1
0.5
1
1
1.4

Station 3
D (4.2-1.2)=3
E (3-.5)=2.5

2
A

1
B

1
G

3.25

1.2

.5

Station 1

1.4
H

Task
A
C
D
B
E
F
G
H

Station 2

A (4.2-2=2.2)
B (2.2-1=1.2)
G (1.2-1= .2)

C (4.2-3.25)=.95

Idle= .2

Idle = .95

Followers
6
4
3
2
2
1
1
0

Time (Mins)
2
3.25
1.2
1
0.5
1
1
1.4

Station 3
D (4.2-1.2)=3
E (3-.5)=2.5
F (2.5-1)=1.5

2
A

1
B

1
G

3.25

1.2

.5

Station 1

1.4
H

Task
A
C
D
B
E
F
G
H

Station 2

A (4.2-2=2.2)
B (2.2-1=1.2)
G (1.2-1= .2)

C (4.2-3.25)=.95

Idle= .2

Idle = .95

Followers
6
4
3
2
2
1
1
0

Time (Mins)
2
3.25
1.2
1
0.5
1
1
1.4

Station 3
D (4.2-1.2)=3
E (3-.5)=2.5
F (2.5-1)=1.5
H (1.5-1.4)=.1
Idle = .1

2
A

1
B

1
G

3.25

1.2

.5

Station 1

1.4
H

Task
A
C
D
B
E
F
G
H

Station 2

A (4.2-2=2.2)
B (2.2-1=1.2)
G (1.2-1= .2)

C (4.2-3.25)=.95

Idle= .2
Efficiency=95%

Idle = .95
Efficiency=77%

Followers
6
4
3
2
2
1
1
0

Time (Mins)
2
3.25
1.2
1
0.5
1
1
1.4

Station 3
D (4.2-1.2)=3
E (3-.5)=2.5
F (2.5-1)=1.5
H (1.5-1.4)=.1
Idle = .1
Efficiency=98%

Example of Line Balancing: Determine the

Efficiency of the Assembly Line
Sum
of
task
times
(T)
Sum
of
task
times
(T)
Efficiency
=
Efficiency = Actual number of workstations (Na) x Cycle time (C)
Actual number of workstations (Na) x Cycle time (C)

11.35
11.35 mins
mins // unit
unit
Efficiency
=.901
Efficiency ==
=.901
(3)(4.2mins
(3)(4.2mins// unit)
unit)

Step 1: Identify Tasks &

Immediate Predecessors

Step 1: Identify Tasks &

Immediate Predecessors

Layout Calculations
Step 2: Determine output rate
Vicki needs to produce 60 pizzas per hour

Step 3: Determine cycle time

The amount of time each workstation is allowed
to complete its tasks
Cycle time (sec./unit)

available time sec./day

60 min/hr x 60 sec/min

60 sec./unit
desired output units/hr
60 units/hr

Limited by the bottleneck task (the longest

task in a process):
Maximum output

available time
3600 sec./hr.

72 units/hr, or pizzas per hour

bottleneck task time 50 sec./unit

Layout Calculations
(continued)
Step 4: Compute the theoretical minimum
number of stations
TM = number of stations needed to
achieve 100% efficiency (every second is
used)
TM

task times
cycle time

165 seconds
2.75, or 3 stations
60 sec/station

Always round up (no partial workstations)

Serves as a lower bound for our analysis

Last Layout Calculation

Step 6: Compute efficiency and balance
delay
Efficiency (%) is the ratio of total
productive time divided by total time
Efficiency

(%)

NC

165 sec.
100 91.7%
3 stations x 60 sec.

Balance delay (%) is the amount by which

the line falls short of 100%
Balance delay 100% 91.7% 8.3%

Problem
Task

Imm. predecessor

Task time (sec)

None

55

30

22

35

B, C

50

15

10

TOTAL

222

Draw precedence diagram

Determine cycle timedemand = 50 units/hr
Theoretical minimum no. of work stations
Assign tasks to workstations using cycle time
Efficiency and balance delay of line?
Bottleneck?
Maximum output?

Group Technology:
Transition from Process Layout
1. Grouping parts into families
that follow a common
sequence of steps
2. Identifying dominant flow
patterns of parts families as a
basis for location or
relocation of processes
3. Physically grouping
machines and processes into

Product Layout
An example
L

L
G

Machine Component Incident

Matrix(MCIM)
Before Grouping

Machines

Components
A
B
C
D
E
F
G
H
I
J

1
1

1
1

1
1

1
1

4
1

7
1

1
1

10

11

12

13

14

15

16

17

18

19

20

1
1

1
1
1

1
1

1
1

1
1

1
1
1

1
1
1

1
1

Machine Component Incident

Matrix
After Grouping

Machines

Components
B
C
D
A
F
E
I
G
H
J

2
1
1

3
1
1

5
1
1

8
1
1

10
1
1

1
1
1

1
1
1

1
1
1

20 18 17 15 14 13

1
1

1
1

1
1

1
1

1
1

11 12 16 19

1
1
1

1
1
1

1
1
1

1
1
1
1
1

1
1
1

1
1
1

Rank Order Clustering(ROC)

Machines

Components

Rank Order Clustering(ROC)

1. Read each row of the MCIM as binary number.
Rank the rows in descending order.
2. If there is no change stop. Otherwise go to next
step.
3. Rearrange the rows based on ranking.
4. Read each column of the MCIM as binary
number. Rank the rows in descending order.
5. If there is no change stop. Otherwise go to next
step.
6. Rearrange the rows based on ranking. Go to

Rank Order
Clustering(ROC)
Rows as binary numbers

Value of the binary

number

Rank

ROW1

10

ROW2

25

ROW3

36

ROW4

26

ROW5

37

Rank Order Clustering(ROC)

Machines

Components

Rank Order
Clustering(ROC)
Columns as binary numbers

Value of the binary

number

Rank

Column1

24

Column2

12

Column3

13

Column4

24

Column5

Column6

18

Rank Order Clustering(ROC)

Machines

Components

Example)
Components
1
A

Machines

1
1

10
1

1
1

1
1

1.Use ROC to rank families and machine groups

2.What will happen if we did column sorting first and then row?