Facilities Location, Layout and Planning

1. Facilities Location, Layout and Planning

2. FACILITY PLANNING • The placement of facility – customers, suppliers, other links in the supply chain • Resources • Strategy – 99cents Only example • Access to customers • Government impacts

3. Objectives of Facility Layout • Minimize material handling costs • Utilize space efficiently • Utilize labor efficiently • Eliminate bottlenecks • Facilitate communication and interaction between workers, between workers and their supervisors, or between workers and customers • Reduce manufacturing cycle time or customer service time

4. Objectives of Facility Layout • Eliminate waste or redundant movement • Facilitate the entry, exit, and placement of material, products, or people • Incorporate safety and security measures • Promote product and service quality • Encourage proper maintenance activities • Provide a visual control of operations or activities • Provide flexibility to adapt to changing conditions • Increase capacity

5. Questions on Layout Planning • How should the facility be laid out? • Does my layout cause unnecessary movement/excess travel time? • Does my work flow in a logical manner? • Does size dictate layout or does layout/product flow dictate the size?

6. Basic Types of Layouts • Process Layout • Machines grouped by process they perform • Product Layout • Linear arrangement of workstations to produce a specific product • Fixed Position Layout • Used in projects where the product cannot be moved

7. Milling Department Lathe Department Drilling Department M M D D D D L L M M D D D D L L G G G P L L G G G P L L Painting Department Grinding Department L L A A A Receiving and Shipping Assembly Manufacturing Process Layout

8. Milling Department Lathe Department Drilling Department M M D D D D L L M M D D D D L L G G G P L L G G G P L L Painting Department Grinding Department L L A A A Receiving and Shipping Assembly Manufacturing Process Layout

9. Milling Department Lathe Department Drilling Department M M D D D D L L M M D D D D L L G G G P L L G G G P L L Painting Department Grinding Department L L A A A Receiving and Shipping Assembly Manufacturing Process Layout

10. In Out A Product Layout

11. Fixed-Position Layouts • Typical of projects • Equipment, workers, materials, other resources brought to the site • Highly skilled labor • Often low fixed • Typically high variable costs

12. Designing Process Layouts • Minimize material handling costs • Block Diagramming • Minimize nonadjacent loads • Use when quantitative data is available • Relationship Diagramming • Based on location preference between areas • Use when quantitative data is not available

13. Block Diagramming • Create load summary chart • Calculate composite (two way) movements • Develop trial layouts minimizing number of nonadjacent loads • Example

15. Relationship Diagramming(Murther’s Grid) • Used when quantitative data is not available • Muther’s grid displays preferences • Denote location preferences with weighted lines

16. Production Offices Stockroom Shipping and receiving Locker room Toolroom Relationship Diagramming Example

17. Production O A Offices U I E O Stockroom A A X Shipping and receiving U U U O O Locker room O Toolroom Relationship Diagramming Example A Absolutely necessary E Especially important I Important O Okay U Unimportant X Undesirable

18. Production 4 1 Offices 5 3 2 4 Stockroom 1 1 6 Shipping and receiving 5 5 5 4 4 Locker room 4 Toolroom Relationship Diagramming Example 1 Absolutely necessary 2 Especially important 3 Important 4 Okay 5 Unimportant 6 Undesirable

20. Facility Location Models

21. Types Of Facilities • Heavy manufacturing • Auto plants, steel mills, chemical plants • Light industry • Small components mfg, assembly • Warehouse & distribution centers • Retail & service

22. Factors in Heavy Manufacturing Location • Construction costs • Land costs • Raw material and finished goods shipment modes • Proximity to raw materials • Utilities • Labor availability

23. Factors in Light Industry Location • Construction costs • Land costs • Easily accessible geographic region • Education & training capabilities

24. Factors in Warehouse Location • Transportation costs • Proximity to markets (Customers)

27. Service Location Considerations • Labor • Cost of Living • Real Estate • Construction • Government Incentives • Examples – Amoco, Mass St, Tattoo Parlors, Walgreen’s

28. Government stability Government regulations Political and economic systems Economic stability and growth Exchange rates Culture Climate Export import regulations, duties and tariffs Raw material availability Number and proximity of suppliers Transportation and distribution system Labor cost and education Available technology Commercial travel Technical expertise Cross-border trade regulations Group trade agreements Global Location Factors

29. Community government Local business regulations Government services Business climate Community services Taxes Availability of sites Financial Services Community inducements Proximity of suppliers Education system Regional Location Factors

30. Customer base Construction/ leasing cost Land cost Site size Transportation Utilities Zoning restrictions Traffic Safety/security Competition Area business climate Income level Site Location Factors

31. Location Incentives • Tax credits Wal-Mart in Wyandotte • Relaxed government regulation • Job training • Infrastructure improvement • Money

32. Center-of-Gravity Technique • Locate facility at center of geographic area • Based on weight and distance traveled • Establish grid-map of area • Identify coordinates and weights shipped for each location

33. Facility Summary • Why is it important? • Location analysis • Location Criteria – global, local, regional - education • Location and Strategy • Location and Customers • Layout planning

34. Project Managementand Operations

35. First Essay on Project Management: 1697 – “An Essay Upon Projects” 1959 HBR Article – “The Project Manager” Air Force Manual 1964 Project Management

36. Project Management In today’s global marketplace, complexity and speed are certainties. In such an environment, a good axiom for project management is, Do It, Do It Right, Do It Right Now. Creating clear direction, efficiency, timely response, and quality outcomes requires project managers who are agile -- adept at change. The associated disciplinary areas are clearly spelled out in the following PMI definition.“Project management is the application of knowledge, skills, tools, and techniques to a broad range of activities in order to meet the requirements of a particular project. Project management is comprised of five Project Management Process Groups – Initiating Processes, Planning Processes, Executing Processes, Monitoring and Controlling Processes, and Closing Processes. Source: Project Management Institute - http://www.pmi.org/info/PP_AboutProfessionOverview.asp?nav=0501

37. Elements of Project Management • Project team • Individuals from different departments within company • Matrix organization • Team structure with members from different functional areas depending on skills needed • Project manager - Leader of project team • Project Charter – high level description of what is to be accomplished in a project and delegates authority to project manager to implement actions to complete project

38. Project Planning • Statement of work • Written description of goals, work & time frame of project • Activities require labor, resources & time • Precedence relationship shows sequential relationship of project activities

39. Elements of Project Planning • Define project objective(s) • Identify activities • Establish precedence relationships • Make time estimates • Determine project completion time • Compare project schedule objectives • Determine resource requirements to meet objective

40. Work Breakdown Structure • Hierarchical organization of work to be done on a project • Project broken down into modules • Modules subdivided into subcomponents, activities, and tasks • Identifies individual tasks, workloads, and resource requirements

41. Project Control • All activities identified and included • Completed in proper sequence • Resource needs identified • Schedule adjusted • Maintain schedule and budget • Complete on time

42. A Gantt Chart Around since 1914 • Popular tool for project scheduling • Graph with bar for representing the time for each task • Provides visual display of project schedule • Also shows slack for activities - amount of time activity can be delayed without delaying project

43. Month 0 2 4 6 8 10 | | | | | Activity Design house and obtain financing Lay foundation Order and receive materials Build house Select paint Select carpet Finish work 1 3 5 7 9 Month A Gantt Chart

44. CPM/PERT • Critical Path Method (CPM) • DuPont & Remington-Rand (1956) • Deterministic task times • Project Evaluation & Review Technique (PERT) • US Navy, Lockheed • Multiple task time estimates

45. 3 Lay foundation Dummy Build house Finish work 2 0 3 1 1 2 4 6 7 3 1 Design house and obtain financing Order and receive materials 1 1 Select paint Select carpet 5 Project Network for a House

46. Critical Path • A path is a sequence of connected activities running from start to end node in network • The critical path is the path with the longest duration in the network • Project cannot be completed in less than the time of the critical path

47. Lay foundation Dummy Build house Finish work 2 0 3 1 3 1 Design house and obtain financing Order and receive materials 1 1 Select paint Select carpet 3 1 2 4 6 7 5 The Critical Path A: 1-2-3-4-6-73 + 2 + 0 + 3 + 1 = 9 months B: 1-2-3-4-5-6-73 + 2 + 0 + 1 + 1 + 1 = 8 months C: 1-2-4-6-73 + 1 + 3 + 1 = 8 months D: 1-2-4-5-6-73 + 1 + 1 + 1 + 1 = 7 months

48. Lay foundation Dummy Build house Finish work 2 0 3 1 3 1 Design house and obtain financing Order and receive materials 1 1 Select paint Select carpet 3 3 Finish at 9 months Start at 5 months 2 0 1 3 1 1 2 4 6 7 1 2 4 6 7 3 1 1 Start at 8 months Start at 3 months 5 5 The Critical Path Activity Start Times Figure 6.6

49. Project Crashing • Crashing is reducing project time by expending additional resources • Crash time is an amount of time an activity is reduced • Crash cost is the cost of reducing the activity time • Goal is to reduce project duration at minimum cost

50. Time-Cost Relationship • Crashing costs increase as project duration decreases • Indirect costs increase as project duration increases • Reduce project length as long as crashing costs are less than indirect costs