FACILITY LAYOUT

STRATEGIES
Dr. Debadyuti Das
Innovations at McDonald’s
 Indoor seating (1950s)
 Drive-through window (1970s)
 Adding breakfast to the menu (1980s)
 Adding play areas (late 1980s)
 Redesign of the kitchens (1990s)
 Self-service kiosk (2004)
 Now three separate dining sections
Innovations at McDonald’s
 Indoor seating (1950s)
 Drive-through window (1970s)
Six out of the
 Adding breakfast to the menu (1980s)
seven are layout
 Adding play areas (late 1980s)
decisions!
 Redesign of the kitchens (1990s)
 Self-service kiosk (2004)
 Now three separate dining sections
McDonald’s New Layout

 Seventh major innovation

 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, bar
stools and plasma TVs
 Flexible zone for kids and families
 Facility layout is a source of competitive
advantage
Facilities Layout

• Layout: the configuration of departments, work

centers, and equipment, with particular
emphasis on movement of work (customers or
materials) through the system
The Need for Layout Design
Inefficient operations
For Example: Changes in the design
High Cost of products or services
Bottlenecks

Accidents
The introduction of new
products or services

Safety hazards
 The Need for Layout Design (Cont’d)
Changes in
environmental Changes in volume of
or other legal output or mix of
requirements products

Morale problems
Changes in methods
and equipment
Additional needs for layout design
• Higher utilization of space, equipment and people
• Improved flow of information, materials and
people.
• Improved customer/client interaction
• Flexibility
Layout Design considerations
• Requires substantial investments of money and
effort
• Involves long-term commitments
• Has significant impact on cost and efficiency of
short-term operations
Basic Layout Types

• Process layout

• Product layouts

• Fixed-Position layout

• Cellular layout

• Office layout

• Retail layout

• Warehouse layout
 Basic Layout Types
• Process layout
• Layout that can handle varied processing requirements.
Deals with low/moderate volume, moderate/high variety
production
• Product layout
• Layout that uses standardized processing operations to
achieve smooth, rapid, high-volume flow
• Fixed Position layout
• Layout in which the product or project remains
stationary, and workers, materials, and equipment are
moved as needed
Basic layout types
• Cellular layout
• Arranges machinery and equipment to focus on a
production of a single product or a group of related
products
• Office layout
• Positions workers, their equipment and spaces/offices
to provide for movement of information
• Retail layout
• Allocates shelf space and responds to customer
behaviour
• Warehouse layout
• Addresses trade-off between space and material
handling
Process Layout

Process Layout
(functional)

Dept. A Dept. C Dept. E

Dept. B Dept. D Dept. F

Used for Intermittent processing

Job Shop or Batch
 Process Layout
An example

Product A
Product B L L L L D D

Product C D D
L L L L
D D
M M

G G G
M M
 Advantages of Process Layouts

• Can handle a variety of processing requirements

• Not particularly vulnerable to equipment failures
• Equipment used is less costly
• Possible to use individual incentive plans
Disadvantages of Process Layouts

• In-process inventory costs can be high

• Challenging routing and scheduling
• Equipment utilization rates are low
• Material handling slow and inefficient
• Complexities often reduce span of supervision
• Special attention for each product or customer
• Accounting and purchasing are more involved
Process Layout

Patient A - broken leg

ER
triage Emergency room admissions
room
Patient B - erratic heart
Surgery pacemaker

Laboratories

Radiology ER Beds Pharmacy Billing/exit

Process Layout

 Arrange work centers so as to

minimize the costs of material
handling
 Basic cost elements are
 Number of loads (or people) moving
between centers
 Distance loads (or people) move
between centers
Process Layout
n 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
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.
1. Construct a “from-to matrix”
2. Determine the space requirements
3. Develop an initial schematic diagram
4. Determine the cost of this layout
5. Try to improve the layout
6. Prepare a detailed plan
 Process Layout Example
Number of loads per week
Department Assembly Painting Machine Receiving Shipping Testing
(1) (2) Shop (3) (4) (5) (6)

Assembly (1) 50 100 0 0 20

Painting (2) 30 50 10 0

Machine Shop (3) 20 0 100

Receiving (4) 50 0

Shipping (5) 0

Testing (6)
Process Layout Example
Area 1 Area 2 Area 3

Assembly Painting Machine Shop

Department Department Department
(1) (2) (3)

40’

Receiving Shipping Testing

Department Department Department
(4) (5) (6)

Area 4 Area 5 Area 6

60’
Process Layout Example
Interdepartmental Flow Graph
100

50 30
1 2 3

10
100

4 5 6
50
Process Layout Example
n n

Cost = ∑ ∑ Xij Cij

i=1 j=1

Cost = $50 + $200 + $40

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

= $570
Process Layout Example
Revised Interdepartmental Flow Graph
30

50 100
2 1 3

50 100

50
4 5 6
Process Layout Example
n n

Cost = ∑ ∑ Xij Cij

i=1 j=1

Cost = $50 + $100 + $20

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

= $480
Process Layout Example
Area 1 Area 2 Area 3

Painting Assembly Machine Shop

Department Department Department
(2) (1) (3)

40’

Receiving Shipping Testing

Department Department Department
(4) (5) (6)

Area 4 Area 5 Area 6

60’
Computer Software
 Graphical approach only works for
small problems
 Computer programs are available to
solve bigger problems
 CRAFT
 ALDEP
 CORELAP
 Factory Flow
CRAFT Example
PATTERN PATTERN
1 2 3 4 5 6 1 2 3 4 5 6

1 A A A A B B 1 D D D D B B

2 A A A A B B 2 D D D D B B

3 D D D D D D 3 D D D E E E

4 C C D D D D 4 C C D E E F

5 F F F F F D 5 A A A A A F

6 E E E E E D 6 A A A F F F

TOTAL COST 20,100 TOTAL COST 14,390

EST. COST REDUCTION .00 EST. COST REDUCTION 70.
ITERATION 0 ITERATION 3

(a) (b)
 Computer Software
 Three dimensional visualization software allows
managers to view possible layouts and assess
process, material
handling,
efficiency,
and safety
issues
Product Layout

Product Layout
(sequential)

Work Work Work

Station 1 Station 2 Station 3

Used for Repetitive Processing

Repetitive or Continuous
Product Layout
An example

Product A
L D M G

Product B
L D L G

Product C
L D M L G
 Product Layout

Raw
Station Station Station Station Finished
materials 1 2 3 4 item
or customer
Material Material Material Material
and/or and/or and/or and/or
labor labor labor labor

Used for Repetitive or Continuous Processing

 Advantages of Product Layout

• High rate of output

• Low unit cost
• Labor specialization
• Low material handling cost
• High utilization of labor and equipment
• Established routing and scheduling
• Routing accounting and purchasing
 Disadvantages of Product Layout

• Creates dull, repetitive jobs

• Poorly skilled workers may not maintain equipment or
quality of output
• Fairly inflexible to changes in volume
• Highly susceptible to shutdowns
• Needs preventive maintenance
• Individual incentive plans are impractical
McDonald’s Assembly Line
Group Technology/Cellular Layout
An example

Cell 1 Cell 2

L M D M D L

D L G G D L

L D L D

M L G L M
Cell 4 Cell 3
Cellular Layout

• Layout in which machines/workstations are

grouped into a cell that can process items that
have similar processing requirements

• Groupings are determined by the operations

needed to perform work for a set of similar items
or part families.
Work Cells
 Reorganizes people and machines
into groups to focus on a single
product or product groups
 Group technology identifies products
that have similar characteristics for
particular cells
 Volume must justify cells
 Cells can be reconfigured as designs
or volume changes
Advantages of Work Cells
1. Reduced work-in-process inventory
2. Less floor space required
3. Reduced raw material and finished
goods inventory
4. Reduced direct labor
5. Heightened sense of employee
participation
6. Increased use of equipment and
machinery
7. Reduced investment in machinery and
equipment
Improving Layout Using Work Cells

Current layout - workers in

small closed areas. Cannot
increase output without a
third worker and third set of
equipment. Improved layout - cross-trained
workers can assist each other. May
be able to add a third worker as
additional output is needed.
Improving Layout Using Work Cells

Current layout - straight lines

make it hard to balance tasks Improved layout - in U shape,
because work may not be workers have better access.
divided evenly Four cross-trained workers
were reduced.

U-shaped line may reduce employee movement

and space requirements while enhancing
communication, reducing the number of workers,
and facilitating inspection
Requirements of Work Cells

1. Identification of families of products

2. A high level of training, flexibility and
empowerment of employees
3. Being self-contained, with its own
equipment and resources
4. Test (poka-yoke) at each station in the
cell
 Process/Functional vs. Cellular Layout
Dimension Functional Cellular
Number of moves many few
between departments
Travel distances longer shorter

Travel paths variable fixed

Job waiting times greater shorter

Throughput time higher lower

Amount of work in higher lower

process
Supervision difficulty higher lower

Scheduling complexity higher lower

Equipment utilization lower higher
Fixed-Position Layout
 Product remains in one place
 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
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 a state of
flux due to frequent
technological
changes
Relationship Chart
Supermarket Retail Layout

 Objective is to maximize
profitability per square foot of floor
space
 Sales and profitability vary directly
with customer exposure
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 (items that dominate
a purchasing trip) to both sides of an aisle
and disperse them to increase viewing of
other items
4. Use end-aisle locations because they have
a very high exposure rate
Store Layout
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
 Better information about sales through
POS data collection
 Closer control of inventory
Servicescapes
 Ambient conditions - background
characteristics such as lighting, sound,
smell, and temperature
 Spatial layout and functionality - which
involve customer
circulation path planning,
aisle characteristics, and
product grouping
 Signs, symbols, and
artifacts - characteristics
of building design that
carry social significance
Warehousing and Storage Layouts

 Objective is to optimize trade-offs

between handling costs and costs
associated with warehouse space
 Maximize the total “cube” of the
warehouse – utilize its full volume
while maintaining low material
handling costs
Warehousing and Storage Layouts

Material Handling Costs

 All costs associated with the transaction
 Incoming transport
 Storage
 Finding and moving material
 Outgoing transport
 Equipment, people, material, supervision,
insurance, depreciation
 Minimize damage and spoilage
Warehousing and Storage Layouts

 Warehouse density tends to vary inversely

with the number of different items stored
 Automated Storage and
Retrieval Systems (ASRSs)
can significantly improve
warehouse productivity by
an estimated 500%
 Dock location is a key
design element
Cross-Docking
 Materials are moved directly from
receiving to shipping and are not placed
in storage
in the warehouse
 Requires tight
scheduling and
accurate shipments,
bar code or RFID
identification used for
advanced shipment
notification as materials
are unloaded
Random Stocking
 Typically requires automatic identification
systems (AISs) and effective information
systems
 Random assignment of stocking locations
allows more efficient use of space
 Key tasks
1. Maintain list of open locations
2. Maintain accurate records
3. Sequence items to minimize travel, pick time
4. Combine picking orders
5. Assign classes of items to particular areas
Assembly Line Balancing

Line Balancing is the process of assigning

tasks to workstations in such a way that
the workstations have approximately
equal time requirements.
Cycle Time

Cycle time is the maximum time

allowed at each workstation to
complete its set of tasks on a unit.
Determine Maximum Output

OT
O utput capacity =
CT

O T  operating tim e per day

D = Desired output rate

OT
CT = cycle tim e =
D
Determine the Minimum Number
of Workstations Required

(D)( t)
N =
OT

 t = sum of task times

Precedence Diagram

Precedence diagram: Tool used in line balancing to

display elemental tasks and sequence requirements
0.1 min. 1.0 min.
A Simple Precedence
a b Diagram

c d e
0.7 min. 0.5 min. 0.2 min.
Example 1: Assembly Line Balancing

• Arrange tasks shown in Figure 1 into three

workstations.
• Use a cycle time of 1.0 minute
• Assign tasks in order of the most number of
followers
Example 1 Solution

Revised
Time Assign Time Station
Workstation Remaining Eligible Task Remaining Idle Time
1 1.0 a, c a 0.9
0.9 c c 0.2
0.2 none - 0.2
2 1.0 b b 0.0 0.0
3 1.0 d d 0.5
0.5 e e 0.3 0.3
0.3 - - 0.5
Calculate Percent Idle Time

Idle time per cycle

Percent idle time =
(N)(CT)

Efficiency = 1 – Percent idle time

Line Balancing Rules

Some Heuristic (intuitive) Rules:

• Assign tasks in order of most following tasks.
• Count the number of tasks that follow

• Assign tasks in order of longest task time.

• Find the task with longest time from the beginning
Example 2

0.2 0.2 0.3

a b e

0.8 0.6
c d f g h
1.0 0.4 0.3
Solution to Example 2

Station 1 Station 2 Station 3 Station 4

a b e
f g h
c d
Parallel Workstations

30/hr. 30/hr. 30/hr. 30/hr.

1 min. 1 min. 2 min. 1 min.

Bottleneck

30/hr. 1 min. 30/hr.

60/hr. 60/hr.
1 min. 1 min. 1 min.
30/hr.
1 min. 30/hr.

Parallel Workstations