LDCU

MODULE 2- BUILDING WORLD CLASS OPERATIONS

LAYOUT DESIGN

JESSIE RADAZA TUTOR, CE MMME

Innovations @ McDonalds
Indoor Seating (1950s) Drive Thru Window (1970s) Adding Breakfast to the Menu ( 1980s) Adding Play Areas(1990s)

New Kitchen Layout

New Kitchen Layout

McDonalds New Kitchen Layout Design

Layout Design refers to the specific arrangement of physical facilities. Facility-layout studies are
necessary whenever: 1. a new facility is constructed, 2. there is a significant change in demand or throughput volume, 3. a new good or service is introduced to the customer benefit package, or 4. different processes, equipment, and/or technology are installed.

Purposes of layout studies are to:

minimize delays in materials handling and customer movement

maintain flexibility

use labor and space effectively

promote high employee morale and customer satisfaction

provide for good housekeeping and maintenance

enhance sales as appropriate in manufacturing and service facilities

Other Facility Layout Issues

If the facility layout is flawed in some way, process efficiency and effectiveness suffers. In manufacturing, facility layout is generally unique, and changes can be accomplished without much difficulty. For service firms, however, the facility layout is often duplicated in hundreds or thousands of sites. This makes it extremely important that the layout be designed properly, as changes can be extremely costly.

Types of Layouts Designs

A product layout is an arrangement based

on the sequence of operations that are performed during the manufacturing of a good or delivery of a service.

Examples: winemaking industry, credit card processing, Subway sandwich shops, paper manufacturers, insurance policy processing, and automobile assembly lines.

Types of Layout Design

Product Layout
Advantages of product layouts include lower workin-process inventories, shorter processing times, less material handling, lower labor skills, and simple planning and control systems. Disadvantages include that a breakdown at one workstation can cause the entire process to shut down; a change in product design or the introduction of new products may require major changes in the layout, limiting flexibility.

Types of Layouts Designs

A process layout consists of a functional

grouping of equipment or activities that do similar work.

Examples: legal offices, shoe manufacturing, jet engine turbine blades, and hospitals use a process layout.

Types of Layouts Designs

Process Layout
Advantages of process layouts include a lower investment in equipment, and the diversity of jobs inherent in a process layout can lead to increased worker satisfaction. Disadvantages include high movement and transportation costs, more complicated planning and control systems, longer total processing time, higher in-process inventory or waiting time, and higher worker-skill requirements.

Exhibit 8.2

Group Technology Layout

In a cellular layout the design is not

according to the functional characteristics of equipment, but rather by self-contained groups of equipment (called cells), needed for producing a particular set of goods or services.

Group technology, or cellular manufacturing, classifies parts into families so that efficient mass-production-type layouts can be designed for the families of goods or services.

Cellular Layout
Cellular layouts are used to centralize people expertise and equipment capability. Examples: groups of different equipment (called cells) needed for producing families of goods or services, group legal (labor law, bankruptcy, divorce, etc.), or medical specialties (maternity, oncology, surgery, etc.).

Machine 2

Machine 1

Machine 3

Materials in

Finished goods out Machine 4

Machine 5

Exhibit 8.3

Source: J. T. Black, Cellular Manufacturing Systems Reduce Set Up time, Make Small-Lot Production Economical, Industrial Engineering Magazine,

Fixed-Position Layout
A fixed-position layout consolidates the

resources necessary to manufacture a good or deliver a service, such as people, materials, and equipment, in one physical location.

The production of large items such as heavy machine tools, airplanes, buildings, locomotives, and ships is usually accomplished in a fixed-position layout.

Fixed-Position Layout

Move machines and/or workers to the site; products normally remains in one location for its entire manufacturing period.

Advantages
Helps in job enlargement and upgrades the skills of the operators. The workers identify themselves with a product in which they take interest and pride in doing the job. Greater flexibility with this type of layout. Layout Capital Investment is lower.

Disadvantages

Skilled and versatile workers are required.

Movement of people and equipment may be expensive.

Low equipment utilization.

Office Layout
Design positions people, equipment, & offices for maximum information flow Arranged by process or product
Example: Payroll dept. is by process

Relationship chart used Examples

Insurance company Software company

Office Layout

Finance
Manager

Accounting
Fin. Acct.

Brand X

(Open-Plan) Office Layout

ADVANTAGES Easier for people to see and communicate with each other Work area can be shared which leads to better use of space Management/Supervisors may work in the same area reduces them & us scenario Team spirit and working together are encouraged DISADVANATGES
Lack of privacy for

meetings Easier for unauthorised people to access files Theft may be more of a problem Difficult to concentrate due to noise and distractions

Retail/Service Layout
Design maximizes product exposure to customers Decision variables
Store flow pattern Allocation of (shelf) space to products

Types
Grid design Free-flow design

Retail Layouts - Rules of Thumb

Locate high-draw items around the periphery of the store Use prominent locations such as the first or last aisle for high-impulse and high margin items Remove crossover aisles that allow customers the opportunity to move between aisles Distribute what are known in the trade as power items (items that may dominate a shopping trip) to both sides of an aisle, and disperse them to increase the viewing of other items Use end aisle locations because they have a very high exposure rate

Retail Store Layout - Layout Types

Grid Pattern: Rectangular with parallel aisles; formal; controls traffic flow; uses selling space efficiently. Examples: Supermarkets and self-service discount stores
Display Racks Display Racks Door Check-out Door Office Restrooms Racks Display Racks Storage

Retail Store Layout

Layout Types Grid Grid Layout is a type of store layout in which counters and fixtures are placed in long rows or runs, usually at right angles, throughout the store.

Retail Store Layout - Layout Types

Free-Flow Pattern: Free-flowing; informal; creates friendly environment; flexible Small specialty shops
Apparel Store

Feature

Trans. Counter

Display Table

Layout Types Grid

Layout Types Free Flow

Warehouse Layout
Design balances space (cube) utilization & handling cost Similar to process layout

Items moved between dock & various storage areas

Optimum layout depends on

Variety of items stored Number of items picked

Warehouse Layout
Conveyor
Truck

Zones

Order Picker

The Nature and Importance of Warehousing

Warehousing provides time and place utility (primarily time) for raw materials, industrial goods, and finished products, allowing firms to use customer service as a dynamic value-adding competitive tool.

Warehouse Layout and Design

Develop a demand forecast. Determine each items order quantity. Convert units into cubic footage requirements. Allow for growth. Allow for adequate aisle space for materials handling equipment.

Product-Oriented Layout
Facility organized around product Design minimizes line imbalance
Delay between work stations

Types: Fabrication line; assembly line

Product-Oriented Requirements

Standardized product High production volume Stable production quantities Uniform quality of raw materials & components

Advantages
Lower variable cost per unit Lower material handling costs Lower work-in-process inventories Easier training & supervision Rapid throughput

Disadvantages
Higher capital investment Special equipment Any work stoppage stops whole process Lack of flexibility Volume Product

References:
Operations Management, Albert Porter http://www.businessdictionary.com hercules.gcsu.edu Technology and Operations Management, California Polytechnic and State University, Henry C. Co Management of Business Logistics, 7th Ed.