FACILITY PLANNING

(For Industrial & Systems

Engineering students)

Lecturer: Assoc. Prof. Ho Thanh Phong

Course Information
Course name: Facility Planning
Text book: Facilities Planning, 4th Edition
James A. Tompkins, White, Bozer,
Tanchoco
Grading:
Midterm exam: 30%
Home works, project: 30%
Final exam: 40%

Chapter 1 Introduction
Lecture Outline
1.Facilities Planning Defined.
2.Significance of Facilities Planning.
3.Objectives of Facilities Planning.
4.Facilities Planning Process.
5.Strategic Facilities Planning.
6.Developing Facilities Planning Strategies.
7.Examples of Inadequate Planning.
8.Summary.

I. Facilities planning defined

The facilities planning is to help organization
achieve supply chain (SC) excellence.
SC excellence process has 6 steps:
business as usual
link excellence
visibility
collaboration
synthesis
velocity
Characteristics of facilities in the SC:
flexibility
modularity
upgradability
adaptability
selective operability
environmental and energy friendliness

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Fig 1_1: Continuous improvement facilities planning cycle

Towards a definition
Facilities planning determines how an activity's tangible
fixed assets best support achieving the activity's
objective.
For a manufacturing firm, facilities planning involves the
determination of how the manufacturing facility best
supports production.
For an airport, facilities planning involves determining
how the airport facility is to support the passengerairplane interface.
For a hospital: How the hospital facility supports
providing medical care to patients.

 The
facilities
planning is
divide into its
location and
its design
components
(Figure 1-2).

Fig 1_2: Facilities planning as part of SC excellence

Fig1_3: Facilities planning for some specific types of facilities

Facilities Location
Determining how the location of a
facility supports meeting the facility's
objective
Its placement with respect to customer,
suppliers, and other facilities with which
it interfaces.
Its orientation on a specific plot of land.

Facilities Design
The determination of how the
design components of a facility
support achieving the facility's
objectives

Facility Systems
Structural and enclosure systems
Lighting, electrical, communication
systems
Life safety systems
Sanitation systems

For a plant:
Power, light, gas, heat, ventilation, air
conditioning, water, sewage needs.

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Facilities Layout
Equipment
Machinery
Furnishings

For a manufacturing facility:

Production areas
Support areas
Personnel areas within the building

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Handling System
Mechanisms needed to satisfy the
required facility interactions.
For a Manufacturing Facility
Materials, personnel, information, and
equipment-handling systems required
to support production.

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II. Significance of facilities

planning
1. Since 1955, approximately 8% of the gross national product
(GNP) is spent in new facilities in the U.S. :
Table 1_1: Percentage of the Gross National Product by industry grouping typically expended on
new facilities between 1955 and today in the United States.

Industry

GNP %

Manufacturing
Public Utilities
Commercial
Communication

3.2
1.6
1.5
1.0

Total

8.0

2. It is estimated that 20 to 50 % of operating costs within

manufacturing are attributed to material handling. It is
generally agreed that effective facilities planning can reduce
material handling costs by 10 to 30 %.
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Motivations
Reindustrialization
Employee health and safety
Energy conservation
Community rules and regulations
Noise, air pollution, waste disposal

Pilferage

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III. Objectives of facilities

planning
Customer satisfaction

Return on assets (ROA)

Maximize inventory turns
Minimize obsolete inventory
Maximize employee participation
Maximize continuous improvement
Speed for quick customer response
Costs and supply chain profitability
Supply chain through partnerships and communication
Organizations vision
Utilizations of people, equipment, space, energy.
Return on investment (ROI) on all capital expenditures
Adaptability and ease of maintenance
Employee safety and job satisfaction

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IV. Facilities planning process

Fig 1_4: Winning facilities planning process

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Table 1_2: Detail explanation of the winning facilities planning process

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Facilities Planning Process

1. DEFINE THE PROBLEM
The objective of the facility

Products/Volumes/Role in the SC

The primary and support activities

Operations, equipment, personnel,

material flows
Maintenance

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Facilities Planning Process

2. ANALYZE THE PROBLEM
The interrelationships among all activities
(Qualitative and quantitative)

3. DETERMINE THE SPACE

REQUIREMENTS FOR ALL ACTIVITIES
For all equipment, material, and personnel

Alternative designs
Alternative facilities plans

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Facilities Planning Process

4. EVALUATE THE ALTERNATIVES
5. SELECT THE PREFERRED DESIGN
6. IMPLEMENT THE DESIGN
Implement the plan
Maintain and adapt the plan
Redefine the objective of the facility

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Table 1_3: Comparison of traditional engineering design process and the winning facilities planning
process

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Fig 1_6: The facilities planning process.

(a)General and manufacturing facilities.
(b) Hospital facilities.
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V. Strategic Facilities Planning

Fig 1_7: Cost of design changes during a project.

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Strategic Facilities Planning Issues

1.

Number, location, and sizes of warehouses and/or distribution

centers.
2. Centralized versus decentralized storage supplies, raw materials,
work-in-process, and finished goods for single- and multi-building
sites, as well as single- and multi-site companies.
3. Acquisition of existing facilities versus design of model factories and
distribution centers of the future.
4. Flexibility required because of market and technological
uncertainties.
5. Interface between storage and manufacturing.
6. Level of vertical integration, including "subcontract versus
manufacture" decisions.
7. Control systems, including materials control and equipment control.
8. Movement of materials between buildings, between sites.
9. Changes in customers' and suppliers' technology as well as firm's
own manufacturing technology and materials handling, storage, and
control technology.
10. Design-to-cost goals for facilities.
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VIII. Summary
Facilites planning:
Determines how an activitys tangible
fixed assets should contribute to meeting
the activitys objectives
Consists of facilities location and facilities
design
Is part art and part science
Can be approached using the
engineering design process
Is a continuous process and should be
viewed from a life-cycle perspective
Represents one of the most significant
opportunities for cost reduction and
productivity improvement
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