Strategic Facilities Planning for Supply Chain Excellence

1. Facilities Planning and DesignCourse code: 1704031511 • Spring 2017-2018 • Required Text: Tompkins et al., (2003). Facilities Planning, 3rd or later Edition, John Wiley and Sons Inc. • Students are encouraged to refer to the text book, and to take notes during the lectures.

2. Chapter 1: Introduction • Definition of Facilities Planning • Significance of Facilities Planning • Objectives of Facilities Planning • Facilities Planning Process • Strategic Facilities Planning

3. Definition of Facilities Planning • Facility is a place, resource, or piece of equipment and other fixed assets provided for a particular purpose. • Facilities planning determines how an activity’s tangible assets best support the activity's objective. • Recently, facilities planning has become a strategy, and part of supply chain excellence. • Facilities planning is part art and part science. • Proper Facilities planning will have significant result on cost reduction and productivity improvement. • Facilities planning consists of: • Facilities location (macro level) • Facilities design (micro level, detailed) • Facilities systems design • Layout design • Handling systems design

4. Facilities location • The placement of the facility with respect to customers, suppliers and other facilities, and also its orientation on a given piece of land. • Factors: • Closeness (to the market, to the raw materials, to the suppliers, to other facilities, to the competitors) • Geographical area (zoning, transportation access, labor, demographics, climate, environmental considerations) • Fixed and recurring costs

5. Facilities systems design • Structural systems, enclosure systems, atmospheric systems, • electrical and lighting systems, communication system, • life safety systems, sanitation system, etc. • What systems are required • Where they are required • Integrating the systems into the overall facility

6. Layout design • Layout for production areas • Production-related and support areas • Consists of all equipment, machinery and furnishing within the building envelope • Determination of: • Block layout • Relative locations and sizes of the planning departments • equipment and storage areas

7. Handling systems design • The mechanisms needed to satisfy the required facility interactions • It consists of materials, personnel, information and equipment-handling systems required to support production. • Receiving, storing, retrieval, transporting, packaging and shipping, postal system. • personnel transit system.

8. Which should be designed first: the material handling system or the facility layout? The layout and the handling system should be designed simultaneously

9. Example of Detailed Layout

10. Main characteristics of facilitiesin a supply chain Proper Facilities planning ensures that a product will be manufactured and shipped to satisfy the ultimate customer needs, facilities that achieve this objective should have the following characteristics: • Flexibility • Flexible facilities are able to handle a variety of requirements without being altered • Modularity • Modular facilities include systems that cooperate efficiently over a wide range of operating rates • Upgradeability • Upgraded facilities easily incorporate advances in equipment systems and technology • Adaptability • Considering the • Calendar • Cycles • Peaks • Selective operability • Understanding how each facility segment operates • Allows contingency plans to be put in place

11. Levels of Supply Chain Excellence Process • Business as usual • Link Excellence • Visibility • Collaboration • Synthesis • Velocity • The facilities we plan today must help an organization achieve supply chain excellence.

12. Fig 1.1: Continuous improvement facilities planning cycle

13. Figure 1-2: Facilities Planning as part of Supply chain excellence

14. Figure 1-3: Facilities Planning for specific types of facilities (a) Manufacturing Plant, (b) Office, (c) Hospital (d) Emergency room

15. Objectives of Facilities Planning • Improve customer satisfaction • Maximize speed • Reduce costs (transportation costs, inventory costs…) • Integrate the supply chain • Support the organization’s vision • Effectively utilize resources • Maximize return on investment (ROI) • Maximize return on assets (ROA) • Be easy to adapt and to maintain • Provide safety for employees

16. Four main issues when designing a facility: • Customers • Internal efficiency • Work environment • Integration into the supply chain

17. Facilities Planning Process Figure 1-4: Winning Facilities Planning Process

18. Figure 1-5: The model of success “ winning circle”

19. Figure 1-6 a: The facilities planning process: General and manufacturing facilities

20. Figure 1-6 b: The facilities planning process: Hospital

21. Strategic Facilities Planning Figure 1-7: Cost of design changes during a project

22. Strategic Facilities Planning Figure 1-8:

23. Strategic Facilities Planning Buildings, Equipment and People Space standards, materials control and productivity measures Provide enough time for planning Figure 1-9: Dimensions for improvement

24. Significance of Facilities Planning • Material Handling costs are about 20-50% of overall operating costs (materials and manufacturing) • New technology renders old machines and equipment obsolete. • Employee health and safety have become a motivation for behind facilities planning studies. • Energy conservation is also another motivation for facilities planning studies. • Fire protection and security should be considered when designing facilities. • Community rules against noise, air pollution and waste disposal. • Compliance with disabilities acts. • Pilferage losses should be considered when designing facilities. Table 1-1: Percentage of GNP expended on new facilities in USA (1955-2003)

25. Table 1-2: Explanation of Winning Facilities Planning Process

26. Table 1-3: Comparison of EDP, FPP and WFPP