Production Management - Layout Types

Ground rules
Arrive on time.
Turn your cell phone off.
Do not leave class early without

okaying it with the lecturer in
advance.
80% attendance is compulsory
Participate actively.
Submit one page summary of the
lecture.
9-1
Layout decisions
NNC Pushpamali
Dept. of Management of Technology
9-2
Intended learning outcomes

Recognize the strategic importance
of layout decisions
Identify the factors concerned in
layout decisions
Evaluate different types of layout
9-3
Strategic Importance of
Layout Decisions
One of the key decisions that
determines the long-run efficiency of
operations.
It established an organizations
competitive priorities in regard to
capacity, processes, flexibility, and
cost as well as quality of work life,
customer contact and image.
9-4
The objective of layout strategy is to

develop an effective and efficient
layout that will meet the firms
competitive requirements.
9-5
Layout Design
Considerations
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
9-6
Layout decisions include the best placement

of machines (in production settings), offices
and desks (in office settings) or service
centers (in settings such as hospitals or
department stores)
An effective layout facilities the flow of
materials, people, and information within
and between areas.
9-7
Types of Layout
1. Office layout
2. Retail layout
3. Warehouse layout
4. Fixed-position layout
5. Process-oriented layout
6. Work-cell layout
7. Product-oriented layout
9-8
Types of Layout
1. Office layout: Positions workers,
their equipment, and spaces/offices
to provide for movement of
information
2. Retail layout: Allocates shelf space
and responds to customer behavior
3. Warehouse layout: Addresses tradeoffs between space and material
handling
9-9
Types of Layout
4. Fixed-position layout: Addresses the
layout requirements of large, bulky
projects such as ships and buildings
5. Process-oriented layout: Deals with

low-volume, high-variety production
(also called job shop or intermittent
production)
9 - 10
Types of Layout
6. Work cell layout: Arranges
machinery and equipment to focus
on production of a single product or
group of related products
7. Product-oriented layout: Seeks the
best personnel and machine
utilizations in repetitive or
continuous production
9 - 11
Good Layouts Consider

Material handling equipment
Capacity and space requirements
Environment and aesthetics
Flows of information
Cost of moving between various
work areas
9 - 12
Office Layout
Grouping of workers, their equipment, and
spaces to provide comfort, safety, and
movement of information
Movement of
information is main
distinction
Typically in state of
flux due to frequent
technological
changes
9 - 13
https://www.google.lk/search?q=office+relationship+chart&espv=2&biw=1024&bih=599&tbm=isch&imgil=OopO8KUhWLKI6M%253A%253BJpMt7GIHB4Nv-M%253Bhttp%25253A%25252F%25252Fwww.slideshare.net%25252Fshilpijain23%25252Flayoutstrategies&source=iu&pf=m&fir=OopO8KUhWLKI6M%253A%252CJpMt7GIHB4Nv-M%252C_&usg=__2gITO01__eUogCemyXt_yB-BECY%3D&ved=0CCQQyjdqFQoTCJ_drvvJ9sgCFUiclAod7E4AoQ&ei=V-A5Vt_VEMi40gTsnYGICg#imgrc=gluv_bCVJI64vM%3A&usg=__2gITO01__eUogCemyXt_yB-BECY%3D
9 - 14
Office relationship chart
https://www.google.lk/search?q=office+relationship+chart&espv=2&biw=1024&bih=599&tbm=isch&imgil=OopO8KUhWLKI6M%253A%253BJpMt7GIHB4Nv-M%253Bhttp%25253A%25252F%25252Fwww.slideshare.net%25252Fshilpijain23%25252Flayout-strategies&source=iu&pf=m&fir=OopO8KUhWLKI6M%253A%252CJpMt7GIHB4NvM%252C_&usg=__2gITO01__eUogCemyXt_yB-BECY%3D&ved=0CCQQyjdqFQoTCJ_drvvJ9sgCFUiclAod7E4AoQ&ei=V-A5Vt_VEMi40gTsnYGICg#imgrc=49JgSWU39GkTxM%3A&usg=__2gITO01__eUogCemyXt_yB-BECY%3D
9 - 15
Supermarket Retail Layout

Objective is to maximize
profitability per square foot of
floor space
Sales and profitability vary

directly with customer exposure
to the products
Greater the rate of exposure, the
greater the sales and the higher
the return on investment
9 - 16
Five Helpful Ideas for

Supermarket Layout
1. Locate high-draw items around the
periphery of the store
2. Use prominent locations for high-impulse
and high-margin items
3. Distribute power items to both sides of

an aisle and disperse them to increase
viewing of other items
4. Use end-aisle locations
5. Convey mission of store through careful
positioning of lead-off department
9 - 17
Retail Slotting
Manufacturers pay fees to retailers
to get the retailers to display (slot)
their product
Contributing factors
Limited shelf space
An increasing number of new

products
9 - 18
Servicescapes
1. Ambient conditions - background
characteristics such as lighting, sound,
smell, and temperature
2. Spatial layout and functionality - which
involve customer
circulation path planning,
aisle characteristics, and
product grouping
3. Signs, symbols, and

artifacts - characteristics
of building design that
carry social significance
9 - 19
Warehousing and Storage

Layouts
Trade-off between handling cost and
costs associated with warehouse space.
Material handling cost: incoming
transport, storage, outgoing transport,:
equipment, people, material,
supervision, insurance and depreciation
9 - 20
Cross-Docking
Materials are moved directly from
receiving to shipping and are not placed
in storage in the warehouse
9 - 21
Fixed-Position Layout
Product remains in one place
(a ship, a highway, a bridge, a house, an
operating table)
Workers and equipment come to site
Complicating factors
Limited space at site
Different materials
required at different
stages of the project
Volume of materials
needed is dynamic
9 - 22
Process oriented layout

Can simultaneously handle a variety
of products or services.
When making products with
different requirements or when
handling customers, patients or
clients with different needs.
Most common tactic is to arrange
department or work centers so as to
minimize the costs of material
handling
9 - 23
e.g.
Walters company management
wants to arrange the six
departments of its factory in a way
that will minimize interdepartmental
material handling costs. (They make
an initial assumption that each
department is 20*20 feet and that
the building is 60 feet long and 40
feet wide
9 - 24
Construct a from-to-matrix
https://books.google.lk/books?id=wUHzc8JtZzUC&pg=PA319&lpg=PA319&dq=Walters+company+management+wants+to+arrange+the+six+departments+of+its+factory+in+a+way+that+will+mi
nimize+interdepartmental+material+handling+costs.+(They+make+an+initial+assumption+that+each+department+is+20*20+feet+and+that+the+building+is+60+feet+long+and+40+feet+wide&s
ource=bl&ots=EGMdjuDSTD&sig=rIVOMm4jnfkqniQt6uBEHGan9t8&hl=en&sa=X&ved=0ahUKEwjy59fU76XJAhUCH5QKHcd9DdkQ6AEIGzAA#v=onepage&q&f=false
9 - 25
Determine the space

requirement
9 - 26
Develop an initial schematic

diagram
9 - 27
Determine the cost of this

layout
Adjacent dept. $1
Non adjacent dept. $2
($ 570)
9 - 28
9 - 29
By trial and error, improve

the layout
$ 480
9 - 30
workcells
An arrangement of machines and
personnel that focus on making a
single product or family of related
products.
9 - 31
9 - 32
Staffing and Balancing

workcells
1. Takt time: pace (frequency) of
production units necessary to meet
customer orders.
= Total work time available/ units required
2. Number of operators required
= Total operation time required/ takt time
9 - 33
e.g.
Stepehn Halls company makes auto
mirrors. The major customer is the
Honda plant nearby. Honda expects
600 mirrors delivered daily, and the
work cell producing the mirrors is
scheduled for 8 hours.
Determine the takt time and the
number of workers required.
9 - 34
Cont.
Total operation time required is 140
seconds.
Assemble= 50 seconds
Paint= 45 seconds
Test= 10 seconds
Label= 20 seconds
Pack for shipping= 15
9 - 35
answer
Takt time: (8 hour* 60 minutes)/ 600
units= 480/600= 0.8 minutes= 48
seconds
Workers required: 140/48 = 2.92
9 - 36
Product- oriented layout

Are organized around products or
families of similar high-volume, lowvariety products. Repetitive
production and continous
production
9 - 37
McDonalds Assembly Line
9 - 38
Developing a precedence
diagram for an assembly
line
Boeing wants to develop a
precedence diagram for an
electrostatic wing component that
require a total assembly time of 66
minutes.
Staff gather tasks, assembly times
and sequence requirements for the
component as below.
9 - 39
480 productive minutes

production schedule requires that 40 units
Task
Assembly time
(minutes)
Task must follow

task listed below
10
11
12
C,D
11
G,H
TOTAL TIME 66
9 - 40
9 - 41
Steps
Cycle time (The maximum time that a
product is allowed at each station)=
production time available per day units
required per day
Minimum number of workstation=
9 - 42
Cycle time= 480 m/ 40 units

= 12 minutes/ unit
Minimum number of workstation=

Total task time/ cycle time= 66/12= 5.5
or 6 stations
2011 Pearson Education
9 - 43
9 - 44
Heizer, J., & Render, B., Operation

Management, Global Edition, Pearson
https://mrtashfeen.wikispaces.com/file/
view/Layout+Decisions.ppt
9 - 45

Production Management - Layout Types

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Ground rules

Do not leave class early without

Intended learning outcomes

The objective of layout strategy is to

Layout decisions include the best placement

5. Process-oriented layout: Deals with

Good Layouts Consider

Office relationship chart

Supermarket Retail Layout

Sales and profitability vary

Five Helpful Ideas for

3. Distribute power items to both sides of

An increasing number of new

3. Signs, symbols, and

Warehousing and Storage

Process oriented layout

Determine the space

Develop an initial schematic

Determine the cost of this

By trial and error, improve

Staffing and Balancing

= Total operation time required/ takt time

Product- oriented layout

McDonalds Assembly Line

480 productive minutes

Task must follow

Cycle time= 480 m/ 40 units

Minimum number of workstation=

2011 Pearson Education

Heizer, J., & Render, B., Operation

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