Layout Strategy

Dr. Keong Leong

Management Department
UNLV

Key Learning Outcome

When you complete this class you
should be able to:
Explain the strategic importance of
layout decisions
Develop a good layout for a processoriented facility
Balance production flow in a
repetitive or product-oriented facility
using the assembly line balancing
technique

Outline
Global Company Profile: McDonalds
The Strategic Importance of Layout

Decisions
Process-Oriented and Repetitive Layout
Assembly Line Balancing

McDonalds New Layout

Redesigning all 30,000 outlets around the world

Three separate dining areas
Linger zone with comfortable chairs and Wi-Fi
connections
Grab and go zone with tall counters
Flexible zone for kids and families
Facility layout is a source of competitive advantage

(Principles of Operations Management, Heizer & Render, 7th Edition)

McDonalds
New Kitchen Layout

Savings of $100,000,000
per year in food costs

(Principles of Operations Management, Heizer & Render, 7th Edition)

Facility Layout Strategy

The objective of layout strategy is to develop a costeffective layout that will meet a firms competitive
needs
Location or arrangement of everything within & around
a facility 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

(Principles of Operations Management, Heizer & Render, 7th Edition)

Process-Oriented Layout

ER
Triage
Room

Patient A - broken leg

Emergency room admissions
Patient B - erratic heart
pacemaker

Surgery

Laboratories

Radiology

ER Beds

Pharmacy

Billing/exit

Figure 9.3
(Principles of Operations Management, Heizer & Render, 7th Edition)

Process-Oriented Layout
n

Minimize cost =

Xij Cij

i=1 j=1

where

n = total number of work centers or

departments
i, j = individual departments
Xij = number of loads moved from
department i to department j
Cij = cost to move a load between
department i and department j

(Principles of Operations Management, Heizer & Render, 7th Edition)

Process Layout Example

Arrange six departments in a factory to minimize the
material handling costs. Each department is 20 x 20 feet
and the building is 60 feet long and 40 feet wide.
Construct a from-to matrix
Determine the space requirements
Develop an initial schematic diagram
Determine the cost of this layout
Try to improve the layout
Prepare a detailed plan

(Principles of Operations Management, Heizer & Render, 7th Edition)

Process Layout Example

Number of loads per week
Department Assembly Painting
(1)
(2)
Assembly (1)

50

Painting (2)
Machine Shop (3)
Receiving (4)
Shipping (5)

Machine Receiving
Shop (3)
(4)

Shipping
(5)

Testing
(6)

100

20

30

50

10

20

100

50

0
0

Testing (6)
Figure 9.4

(Principles of Operations Management, Heizer & Render, 7th Edition)

Process Layout Example

Room 1

Room 2

Room 3

Assembly
Department
(1)

Painting
Department
(2)

Machine Shop
Department
(3)
40

Figure 9.5

Receiving
Department
(4)

Shipping
Department
(5)

Testing
Department
(6)

Room 4

Room 5
60

Room 6

(Principles of Operations Management, Heizer & Render, 7th Edition)

Process Layout Example

Interdepartmental Flow Graph
100

50
20

2
10

50

50

30

20

100

6
Figure 9.6

(Principles of Operations Management, Heizer & Render, 7th Edition)

Process Layout Example

n

Cost =

Xij Cij

i=1 j=1

Cost =

$50*20 + $100*40 + $20*60

(1 and 2)
(1 and 3)
(1 and 6)
+ $30*20 + $50*40 + $10*20
(2 and 3)
(2 and 4)
(2 and 5)
+ $20*60 + $100*20 + $50*20
(3 and 4)
(3 and 6)
(4 and 5)

= $13,200
(Principles of Operations Management, Heizer & Render, 7th Edition)

Process Layout Example

Room 1

Room 2

Room 3

Painting
Department
(2)

Assembly
Department
(1)

Machine Shop
Department
(3)
40

Figure 9.8

Receiving
Department
(4)

Shipping
Department
(5)

Testing
Department
(6)

Room 4

Room 5
60

Room 6

(Principles of Operations Management, Heizer & Render, 7th Edition)

Process Layout Example

Revised Interdepartmental Flow Graph
30

50

10

20

50

50

100

6
Figure 9.7

(Principles of Operations Management, Heizer & Render, 7th Edition)

100

20

Process Layout Example

n

Cost =

Xij Cij

i=1 j=1

Cost =

$50*20 + $100*20 + $20*40

(1 and 2)
(1 and 3)
(1 and 6)
+ $30*40 + $50*20 + $10*40
(2 and 3)
(2 and 4)
(2 and 5)
+ $20*60 + $100*20 + $50*20
(3 and 4)
(3 and 6)
(4 and 5)

= $10,600

(Principles of Operations Management, Heizer & Render, 7th Edition)

Lower Cost Layout

Assembly Line Balancing

Objective is to minimize the imbalance between

machines or personnel while meeting required output
Starts with the precedence relationships
Determine cycle time
Calculate theoretical minimum number of
workstations
Balance the line by assigning specific tasks to
workstations
Calculate efficiency

(Principles of Operations Management, Heizer & Render, 7th Edition)

Assembly Line Balancing

Production time available

Cycle time =
Demand per day
Minimum number
of work stations =

Efficiency =

Task times
Cycle time
Task times

(Actual number of work stations)*(Largest cycle time)

(Principles of Operations Management, Heizer & Render, 7th Edition)

Copier Example
Performance
Time
Task
(minutes)

Task Must Follow

Task Listed
Below

A
10
B
11
C
5
D
4
E
12
F
3
G
7
H
11
I
3
Total time 66

(Principles of Operations Management, Heizer & Render, 7th Edition)

A
B
B
A
C,D
F
E
G,H

This means that

tasks B and E
cannot be done
until task A has
been completed

Copier Example
Performance
Time
Task
(minutes)
A
10
B
11
C
5
D
4
E
12
F
3
G
7
H
11
I
3
Total time 66

Task Must Follow

Task Listed
Below

A
B
B
A
C,D
F
E
G,H

5
10

11

C
4

12

G
3

11

Figure 9.13

(Principles of Operations Management, Heizer & Render, 7th Edition)

Copier Example
Performance
Time
Task
(minutes)
A
10
B
11
C
5
D
4
E
12
F
3
G
7
H
11
I
3
Total time 66

Task Must Follow

Task Listed
Below

480 available
mins per day
40 units required

A
Production time
available per day
B
Cycle time = Units required per day
B
5
=
480
/
40
A
C
= 11
12 minutes
per
unit
C, D
10
3
7
F
F
A
G
B n
4
E
3

Time
for task i
Minimum
i=1 D
G, number
H
I
11
of = 12
workstations

Cycle time

= 66 / 12
= 5.5 or 6 stations
(Principles of Operations Management, Heizer & Render, 7th Edition)

Copier Example

Secondary Rule

Line-Balancing Heuristics
1. Longest task time

480 available

Choose the available task with

per day
Task Must Follow
the longest task time mins Primary
Rule

Performance
Time
Task Listed
40 units required
Task 2.(minutes)
Most following tasksBelowChoose the available task with
Cycleoftime
= 12 mins
the
largest
number
following
A
10

tasks
Minimum
= 5.5 or 6
B
11
A
workstations
C
5 positional
B Choose the available task for
3. Ranked
D
4
B which the sum of following task
weight
5
E
12
A times is the longest
C
F
3
C, D
10
11
4. Shortest task time
Choose the available task3 with 7
G
7
F the shortest task time F
A
G
B
H
11
E
4
3
I
3 number of
G, H Choose the available
5. Least
with
D task11
I
12
following
tasks
the
least
number
of
following
Total time 66
H
E
tasks
Table 9.4
(Principles of Operations Management, Heizer & Render, 7th Edition)

Copier Example

480 available
mins per day
40 units required
Cycle time = 12 mins
Minimum
= 5.5 or 6
workstations

Performance Task Must Follow

Time
Task Listed
Task
(minutes)
Below
A
10

Station
5 A
B
11
2
C
5
C B
11
3
D 10
4
B
E A
12
A
B
F
4
F
3
C, D
G
7
D F Station 3
H
11
E
12
11
I
3
G, H
Station
E
H
1 time 66
Total
Station
4
(Principles of Operations Management, Heizer & Render, 7th Edition)

Station
5

I
Station 6

Figure 9.14

Copier Example
5

480 available
mins per day
40 units required
Cycle time = 12 mins
Minimum
= 5.5 or 6
workstations

Efficiency =

10

11

C
4

12

G
3

11

Task times
(actual number of workstations) x (largest cycle time)

= 66 minutes / (6 stations) x (12 minutes)

= 91.7%

(Principles of Operations Management, Heizer & Render, 7th Edition)