1 Office Space Requirements 2 Universal Axioms Manufacturing managers in large companies tend to overestimate their individual cell or departmental space.

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Office Space Requirements

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Universal Axioms

Manufacturing managers in large companies tend to overestimate their individual cell or departmental space needs

Manufacturing space is like a closet, clutter will continue to collect until it fills the space provided

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General Considerations No magic formulas to follow Experienced managers will overstate

their requirements Inexperienced managers will understate

their requirements Main aisles in a light manufacturing

plant will account for approximately 10% - 18% of total under roof floor space

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The Big Three Budget Limitations

1. Cost Limitations

2. Schedule Limitations

3. Human Resources Limitations

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Gross Business Ratios Space versus sales ratios Revenue ratio Plant ratios or ratio ranges

Estimate data for large companies Use public domain information Office area is fairly consistent Manufacturing size varies by type (cellular,

assembly line, etc.)

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Space-Related Ratios

Total Production Space

Number of Production WorkersSpace-related Ratio =

Useful for existing plant expansion . . .

Take note of the current working conditions:

• Congested = “worst” case scenario

• Functional = “optimal” scenario

Baseline the expansion on these numbers

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Space-Related Ratio Example

A local manufacturer has determined the following:

• Space is considered “tight”

• They have 50 employees

• They currently occupy a 5,000 sq. ft. facility

• Expected 5 year growth = 75 employees

What do we know?

Employee / Space Ratio = 5,000 / 50 = 100 sq. ft / employee

Anticipated facility size in 5 years = 75 X 100 sq. ft.

= 7,500 sq. ft.

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Ratio Caution A ratio is like a forecastforecast. . . it’s only

an estimate of the future Review the past sales / production

history Review the economic conditions

during the growth periods Use the ratios as a guide

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Space Balance Analysis

Most often used classifications: Primary operations Secondary operations Inspection and test areas Storage areas

Raw materials WIP Finished goods

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Space Balance Analysis Service and support

Maintenance Tool cribs

Shipping / Receiving dock areas Offices Aisles

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Space Utilization

Space Utilization

7% 8%

12%

17%17%

19%

20%Service / Support

Molding

Offices

Light Assy

Aisles

Shipping / Receiving

Warehouse

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Site Saturation Planning Completely utilized configuration

No room for building additions No room for expansion

Framework for master facility plan Estimates are derived for

maximum facility layout Used to determine maximum

production output on existing site

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Site Saturation Planning Completely utilized configuration

No room for building additions No room for expansion

Framework for master facility plan Estimates are derived for

maximum facility layout Used to determine maximum

production output on existing site

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Site Saturation PlanningNeglecting site saturation

planning can result in long-term consequences costing the

organization significant capital

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Equipment Utilization Consideration

Equipment utilization impacts layout space

Don’t plan on 100% equipment utilization levels

Take PFD into consideration Rely on historical data including

utilization and maintenance

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Equipment Utilization Consideration

Example:

• Equipment currently runs at 65%, producing 500 pcs./day

• OEM states production runs of 769 pcs./day

• Growth projections require 1,300 pcs./day

• Management expects 85% utilization through improvements

How many machines are required to meet production growth?

(500 pcs./day X 85%) / 65% = 653 pcs./day

1,300 / 653 = 2 machines required [negligible OT projected]

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Adjusting Today’s Needs Also known as conversion or

converting Tally all currently used space Calculate the space for aisles Interview and observe the workers Collect data from the workers Confirm and correct estimates Base projections on the data

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Adjusting Today’s Needs – From the Trenches

Space required for increasing capacity or production levels in not linear

The Conversion methodology uses a subjective or approximate approach

Evaluate each situation carefully Used for basic level planning

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Equipment Utilization Consideration

Example:

A walk-through of the existing 1,225 sq. ft. department (operating 24 / 7 @ maximum capacity) indicates congestion. This area could use an increase of 5% - 10% of space. Develop a baseline SWAG of future space allotment if the area doubles in capacity through increased demand.

Using the Conversion method:

(1,225 sq. ft. X 108%) X 2 = 2,646 sq. ft. estimated

Average = 8% Double capacity

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Determining Space Needs Known as a Rough Layout or

Production Center method Detail each piece of equipment

Indicate door swings Special access areas Approximate equipment spacing Utility requirements (water, air, power,

etc.)

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Elements of a Push System

Production Schedule

Assembly Schedule

Processing Schedule

Procurement Schedule

Suppliers

MaterialsWarehouse

ProductWarehouse

Fabrication Assembly

WorkOrders

WorkOrders

In-ProcessInventory

In-ProcessInventory

MaterialOrders

Trigger or process driverInformation flow and material flowInventory managementWork order control vs. visual controlIntegration of suppliers

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Elements of a Pull System

Suppliers Fabrication AssemblyProduct

Warehouse

CustomerDemand

Point of useStorage

In-ProcessInventory

AssemblyUsage

FabricationUsage

Trigger or process driverInformation flow and material flowInventory managementWork order control vs. visual controlIntegration of suppliers

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Pull Production System

In a Pull System, coordinating the production and movement of parts and components between processes is critical in avoiding over production or shortages.

To achieve this coordination, you can use a system called “Kanban.” Kanban is a mechanism for managing a pull production system.

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Kanban Kanbans have been in use in the US prior

to the mid-1960s

One of the most widely used systems before MRP and MRP-II

Requires maintaining minimal inventory levels

Kanban starts at the end . . . Shipping

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Kanban Kanban is also known as “pull”

manufacturing

Kanban loosely translated to “card”

Kanban is a simple visual scheduling and replenishment approach

Kanban signals can be cards, containers, lights, “Poker Chips”, etc.

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Pull Signal CalculationProduction Kanban

An example of a simple pull signal (Kanban) calculation where a constant quantity of product is withdrawn at varying intervals:

K =Dr * Tr * (1+Fm)

Uk

Where:

K = Number of Kanban (number of signals)And:

Dr = Demand Rate Tr = Replenishment Lead Time (for feeder)Uk = Units per Kanban (per signal)Fm = Management Factor (safety factor)

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Pull Signal CalculationSupplier Kanban

An example of a simple pull signal (Kanban) calculation where a variable quantity of product is provided at constant intervals:

K =Dr * (2 + Td) * (1+Fm)

(Uk * Dd)

Where:

K = Number of Kanban (number of signals)And:

Dr = Demand Rate Td = Transit Delay (for supplier)Uk = Units per Kanban (container capacity)Dd = Deliveries per DayFm = Management Factor (safety factor)

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Inventory Convert inventory to physical space terms

Inventory holding costs have a significant impact on the bottom line of a company

Increased production does not directly reflect increased inventory

Reduce inventory where possible

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Inventory

Inventory

Customer OrderLead Time

On-TimeDelivery

CurrentCapability

Do we have to make trade-offs?

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Space Need Pitfalls Ratios and projections are

approximations Many companies guess at

space needs Forecasting errors Overestimating space

requirements Poor understanding of the

manufacturing process

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Questions & Comments