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Strategic facilities planning

Strategic facilities planning

The science and art of employing the resources of a firm

to achieve its business objectives

Goals
Vision
Mission
Long Term Objectives
Strategies
Annual objectives
Policies
Procedures
Action plan

Strategic facilities planning

How activities tangible of fixed assets best support achieving the activities
objectives.

The more aggregate a facilities planning mistake, the more costly it will be, the less
likely it will be changed, and the longer it will affect the operations by Hicks

Every element of the organization must support the objectives of the firm.

Developing FP strategies:

Team-based approach

Multidimensional Aspects

Impact of changes (Flexibility)

Not driven by profit only

What if Question (uncertainty envelop)

Functional strategies

Strategic Facilities Planning


Characteristics

Long time horizon

Less certainty

Less structured

More end oriented

Poorly defined information

Trends to have irreversible impact

Focus on the whole

As noted by skinner When companies fail to recognize the relationship


between manufacturing decisions and corporate strategy, they may become
saddled with seriously noncompetitive production systems that are expensive
and time-consuming to change.

Strategic facilities planning

Feasibility analysis

Lease versus own analysis

Buy/build/expand/renovate analysis

Merger/acquisition facility study

Analysis of highest and best use

Consolidation study

Decentralization study

Space optimization plan (restacking plan)

Project estimating and scheduling

Stay/move analysis

Developing facilities planning strategies

Facilities Planning Improvement

Strategic facilities planning

Dwight D. Eisenhower said, The plan in nothing, but


planning is everything.

Skinner, Manufacturing affects corporate strategy, and


corporate strategy affects manufacturing. Even an
apparently routine operating area such as a production
scheduling system, strategic considerations should
outweigh technical and conventional industrial engineering
factors invoked in the name of productivity.

Developing Facilities Planning Strategies

The process of effectively translating objectives into actions


can take place only if the power of the individuals inside a
organization is unleashed.

It is important to recognize that each functional strategy is


multidimensional

The Model of Success is effective because it is lateral


approach rather than a hierarchical one.

Developing Facilities Planning Strategies

A number of internal functional areas tend to have a


significant impact on Facilities planning, including
marketing, product development, manufacturing,
production and inventory control, human resources,
and finance. Marketing decisions affect the location of
facilities and the handling system design

Developing Facilities Planning Strategies

Product development & design decisions affect


processing & materials requirements, which in turn
affect layout & material handling.

Changes in component shapes, product complexity,


number of new part numbers, sizes introduced,
stability of product design, and the number of products
introduced affect the handling, storage, and control of
materials

Developing Facilities Planning Strategies

Decisions concerning the degree of vertical integration,


types and levels of automation, types and levels of
control over tooling and work-in process, plant sizes,
and general-purpose versus special-purpose
equipment can affect the location and design of
manufacturing and support facilities.

Developing Facilities Planning Strategies

Close coordination is required in developing facilities


plans to support manufacturing and distribution.
Manufacturing/facilities planning and
distribution/facilities planning interfaces are especially
important.

Developing Facilities Planning Strategies

As the manufacturing plan addresses automatic


load/unload of machines, robotics, group technology,
transfer lines, flexible manufacturing systems, numerically
controlled machines, just-in-time and computer-integrated
manufacturing, alternative storage systems for tooling and
work-in-process, real-time inventory control, shop floor
control, and waste handling/removal systems, the facilities
plan must support changes in manufacturing technology

Developing Facilities Planning Strategies


Long Range
1.
2.

3.

Number, location, and sizes of warehouses and/or


distribution centers
Centralized versus decentralized storage of supplies,
raw materials, work-in-process, and finished goods for
single and multi-building sites, as well as single and
multisite companies

Acquisition of existing facilities versus design of


modern factories and distribution centers of the
future

Developing Facilities Planning Strategies


Long Range
4.

Flexibility required because of market and


technological uncertainties

5.

Interface between storage & manufacturing

6.

Level of vertical integration, including "subcontract


versus manufacture' decisions

Developing Facilities Planning Strategies


Long Range
7.

Control systems, including material control and


equipment control, as well as level of distributed
processing

8.

Movement of material between buildings and between


sites, both inbound and outbound

Developing Facilities Planning Strategies


Long Range
9.

Changes in customers and suppliers' technology as


well as a firm's own manufacturing technology and
material movement, protection, storage, and control
technology

10.

Design-to-cost goals for facilities

Examples of Inadequate Planning

A textile firm installed a large high-rise AS/RS for one


of its divisions. The amount and size of the product to
be stored subsequently changed. Other changes in
technology were projected. The system became
obsolete before it was operational.

Examples of Inadequate Planning

A manufacturer of automotive equipment acquired the


land for a new manufacturing plant. The manufacturing
team designed the layout, and the architect began
designing the facility before the movement, protection,
storage, and control system was designed.

Examples of Inadequate Planning

An established brick-and-mortar retailer began


accepting orders through its Web site. The volume of
orders received during the holiday season peak could
not be processed by its distribution center.

Summary

Determines how an activity's tangible fixed assets


should contribute to meeting the activity's objectives

Consists of facilities location and facilities design is


part art and part science

Can be approached using the engineering design


process

Summary

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