Team #: 4 Sandeep Kaushik Ravi Siruvuri

Plant Layout Strategy and Types of Layout

Objective & Considerations The objective of layout strategy is to develop an economic layout that will meet the organizations competitive requirements and help achieve the differentiation and low cost . Layout design must consider how to achieve : Higher utilization of space, equipment, and people Improved flow of information, materials, or people Improved employee morale and safer working conditions Improved customer/client interaction Flexibility and room for future changes.

Plant Layout Strategy and Types of Layout

REQUIREMENTS OF A GOOD LAYOUT An understanding of capacity and space requirements Selection of appropriate material handling equipment Decisions regarding environment and aesthetics Identification and understanding of the requirements for information flow Identification of the cost of moving between the various work areas

Plant Layout Strategy and Types of Layout

Examples:
IKEA Layout Consideration and philosophy : IKEA stores are usually very large buildings with few windows and yellow accents (the company's colors are also the national colors of Sweden). They are often designed around a "one-way" layout which leads customers along "the long natural way.". This layout is designed to encourage the customer to see the store in its entirety (as opposed to a traditional retail store, which allows a consumer to go right to the section where the goods and services needed are displayed) although there are often shortcuts to other parts of the showroom. The sequence first involves going through furniture showrooms making note of selected items.

McDonalds Layout Consideration and savings : No Food prepared ahead except patty. Eliminate some steps and introduce new bun toasting machine , repositioning condiment containers . This helped with savings of $100 million per year due to increate in efficiency and reducing losses and waste.
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TYPES OF LAYOUT : Office layout : positions workers, their equipment, and spaces/offices to provide for movement of information Retail layout : allocates shelf space and responds to customer behavior Warehouse layout : addresses trade-offs between space and material handling Fixed-position layout : addresses the layout requirements of large, bulky projects such as ships and buildings Process-oriented layout : deals with low-volume, high-variety production (also called job shop or intermittent production) Work cell layout : a special arrangement of machinery and equipment to focus on production of a single product or group of related products Product-oriented layout : seeks the best personnel and machine utilizations in repetitive or continuous production

Plant Layout Strategy and Types of Layout

Office Layout
Objective - Group people, equipment and spaces to provide comfort, safety, and movement of information. Key element - Movement of information Change as Technology advances Build Relationship charts Customize based on importance of work environment factors Convenient access to most commonly used locations of the building

Plant Layout Strategy and Types of Layout

Retail Layout :
Objective Expose as many products as possible to the customer Factors to consider for product arrangement: Place popular items around the store periphery Place high-margin products in prime spots Use end-aisle locations effectively New line of products should be in the broad view of customers Category management maximize profit per square foot of space Slotting fees Servicescapes Ambient conditions Spatial layout Signs, symbols and artifacts
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Warehouse Layout :
Objective Find optimal trade-off between handling costs and warehouse storage costs Minimize material handling costs, damage and spoilage Use ASRS Identify location and type of Docks Cross-docking Tight scheduling Accurate product identification Random Stocking List of open locations Accurate records of inventory Sequencing items Combing orders Assigning locations for specific items Customizing
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Fixed Position Layout

Objective Optimize schedule, materials and space around the product Product remains at one place Process is complicated because of 3 factors: Limited space Type of Materials required changes as project progresses Volume of materials required changes Build sub-projects at remote site Associated costs Convenience
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Process Oriented Layout

Objective Provide maximum flexibility in assigning labor and equipment to accomplish a task
Process is used when variety of products need to be handled simultaneously. Advantage is it provides maximum flexibility Disadvantages include: Takes more time to produce a product Labor should skilled and well-trained Extra consideration to arrange work cells to minimize material handling costs. For large layouts, use Software programs to design the layout (ex: CRAFT, ALDEP, CORELAP)
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Work Cells Objective Organize people and equipment to focus on single product or group of similar products

Advantages include: Reduced work-in-process inventory Less floor space is required Reduced raw materials and finished goods inventory Reduced direct labor costs Heightened sense of employee satisfaction Increased equipment and machinery utilization Reduced investment in machinery and equipment Some of the requirements are: Identification of families of products High level of employee training and flexibility Being self-contained, with its equipment and resources Test at each station of the cell Once proper sequence and equipment are identified, next step is to staff and balance the cell
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Product Oriented Layout Objective Minimize imbalance in fabrication and assembly lines. Types of Layout: Fabrication line builds components on a series of workstations Assembly line puts fabricated parts together at a series of workstations. Advantages of product-oriented layout are: Low variable cost per unit Low material handling cost Reduced work-in-process inventories Easier training and supervision Rapid throughput Disadvantages include: High volume of products are required If one work area is disrupted, entire line is affected Cannot handle variety of products
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Summary

Effective plant layout is a very important strategic step for firms success There is no one optimal solution Its partly science and partly art

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Q&A

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