Ch 05 - Location and layout strategiesportal.unimap.edu.my/portal/page/portal30/Lecture Notes/KEJURUTERAAN... · Heizer and Render Operations Management, Global Edition, Eleventh

8/20/2014

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8 - 1© 2014 Pearson Education

Location and layout

Strategies

PowerPoint presentation to accompany

Heizer and Render

Operations Management, Global Edition, Eleventh Edition

Principles of Operations Management, Global Edition, Ninth Edition

PowerPoint slides by Jeff Heyl

55

© 2014 Pearson Education 8 - 2© 2014 Pearson Education

Learning Objectives

When you complete this chapter you When you complete this chapter you should be able to:should be able to:

1. Identify objective of location strategy, international location issues, clustering, fixed-position, process-oriented and product-oriented layout, work cells, focused work center, office layout, retail layout, warehouse layout and assembly line.

2. Analyze location problem by factor-rating method, locational break-even analysis and center-of-gravity method.


Learning Objectives

When you complete this chapter you When you complete this chapter you should be able to:should be able to:

3. Design to achieve good layout for process facility and balance production flow in a repetitive or product-oriented facility


Fast TrackTM

▶ Location strategies

▶ Factor-Rating Method

▶ Locational Break-Even Analysis

▶Center-of-Gravity Method

▶ Transportation Model


Fast TrackTM

▶ Layout Strategies

▶ Types of layout

▶Relationship Chart – Office Layout

▶Process-Oriented Layout (Job Shop)

▶Balancing Work Cells

▶Balancing Assembly Line


Location Strategies


Heizer and Render




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Location Provides Competitive

Advantage for FedEx

▶ Central hub concept

▶ Enables service to more locations with fewer aircraft

▶ Enables matching of aircraft flights with package loads

▶ Reduces mishandling and delay in transit because there is total control of packages from pickup to delivery



The Strategic Importance of

Location

► One of the most important decisions a firm makes

► Increasingly global in nature

► Significant impact on fixed and variable costs

► Decisions made relatively infrequently



Location

► Long-term decisions

► Once committed to a location, many resource and cost issues are difficult to change



Location

The objective of location strategy is to maximize the benefit of location

to the firm

Options include

1. Expanding existing facilities

2. Maintain existing and add sites

3. Closing existing and relocating


Location and Costs

► Location decisions based on low cost require careful consideration

► Once in place, location-related costs are fixed in place and difficult to reduce

► Determining optimal facility location is a good investment

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Factors That Affect Location

Decisions

▶ Globalization adds to complexity

▶Market economics

▶Communication

▶Rapid, reliable transportation

▶Ease of capital flow

▶Differing labor costs

▶ Identify key success factors (KSFs)


Location Decisions

Country Decision Key Success Factors

1. Political risks, government rules, attitudes, incentives

2. Cultural and economic issues

3. Location of markets

4. Labor talent, attitudes, productivity, costs

5. Availability of supplies, communications, energy

6. Exchange rates and currency risksFigure 8.1


Location DecisionsRegion/

Community Decision

Key Success Factors

1. Corporate desires

2. Attractiveness of region

3. Labor availability and costs

4. Costs and availability of utilities

5. Environmental regulations

6. Government incentives and fiscal policies

7. Proximity to raw materials and customers

8. Land/construction costsFigure 8.1

MN

WI

MI

IL INOH


Location Decisions

Site Decision Key Success Factors

1. Site size and cost

2. Air, rail, highway, and waterway systems

3. Zoning restrictions

4. Proximity of services/ supplies needed

5. Environmental impact issues

Figure 8.1


Global

Competitiveness

Index of

Countries

TABLE 8.1

Competitiveness of 142 Selected

Countries

COUNTRY

2011-2012

RANKING

Switzerland 1

Singapore 2

Sweden 3

Finland 4

USA 5

Japan 9

UK 10

Canada 12

Israel 22

China 26

Mexico 58

Vietnam 65

Russia 66

Haiti 141

Chad 142


Factors That Affect

Location Decisions

► Labor productivity

► Wage rates are not the only cost

► Lower productivity may increase total cost

Labor cost per day

Productivity (units per day)= Cost per unit

South Carolina

= $1.17 per unit$70

60 units

Mexico

= $1.25 per unit$25

20 units

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Factors That Affect

Location Decisions

► Exchange rates and currency risks

► Can have a significant impact on costs

► Rates change over time

► Costs

► Tangible - easily measured costs such as utilities, labor, materials, taxes

► Intangible - less easy to quantify and include education, public transportation, community, quality-of-life


Factors That Affect

Location Decisions

► Exchange rates and currency risks

► Can have a significant impact on costs

► Rates change over time

► Costs

► Tangible - easily measured costs such as utilities, labor, materials, taxes

► Intangible - less easy to quantify and include education, public transportation, community, quality-of-life

Location decisions based on costs

alone can create difficult ethical

situations


Factors That Affect

Location Decisions

► Political risk, values, and culture

► National, state, local governments attitudes toward private and intellectual property, zoning, pollution, employment stability may be in flux

► Worker attitudes towards turnover, unions, absenteeism

► Globally cultures have different attitudes towards punctuality, legal, and ethical issues


Ranking CorruptionRank Country 2012 CPI Score (out of 100)

1 Demark, Finland, New Zealand 90

4 Sweden 88

5 Singapore 87

6 Switzerland 86

7 Australia, Norway 85

9 Canada, Netherlands 84

13 Germany 79

14 Hong Kong 77

17 Japan, UK 74

19 USA 73

37 Taiwan 61

39 Israel 60

45 South Korea 56

80 China 39

123 Vietnam 31

133 Russia 28

Least Corrupt

Most Corrupt


Factors That Affect

Location Decisions

► Proximity to markets

► Very important to services

► JIT systems or high transportation costs may make it important to manufacturers

► Proximity to suppliers

► Perishable goods, high transportation costs, bulky products


Factors That Affect

Location Decisions

► Proximity to competitors (clustering)

► Often driven by resources such as natural, information, capital, talent

► Found in both manufacturing and service industries

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Clustering of Companies

TABLE 8.3 Clustering of Companies

INDUSTRY LOCATIONS

REASON FOR

CLUSTERING

Wine making Napa Valley (US) Bordeaux region (France)

Natural resources of land and climate

Software firms Silicon Valley, Boston, Bangalore (India)

Talent resources of bright graduates in scientific/technical areas, venture capitalists nearby

Clean energy Colorado Critical mass of talent and information, with 1,000 companies




INDUSTRY LOCATIONS

REASON FOR

CLUSTERING

Theme parks (Disney World, Universal Studios, and Sea World)

Orlando, Florida A hot spot for entertainment, warm weather, tourists, and inexpensive labor

Electronics firms Northern Mexico NAFTA, duty free export to U.S.

Computer hardware manufacturers

Singapore, Taiwan High technological penetration rate and per capita GDP, skilled/educated workforce with large pool of engineers




INDUSTRY LOCATIONS

REASON FOR

CLUSTERING

Fast food chains (Wendy’s, McDonald’s, Burger King, and Pizza Hut)

Sites within 1 mile of each other

Stimulate food sales, high traffic flows

General aviation aircraft (Cessna, Learjet, Boeing, Raytheon)

Wichita, Kansas Mass of aviation skills

Athletic footwear, outdoor wear

Portland, Oregon 300 companies, many owned by Nike, deep talent pool and outdoor culture


Factor-Rating Method► Popular because a wide variety of factors

can be included in the analysis

► Six steps in the method

1. Develop a list of relevant factors called key success factors

2. Assign a weight to each factor

3. Develop a scale for each factor

4. Score each location for each factor

5. Multiply score by weights for each factor for each location

6. Make a recommendation based on the highest point score


Factor-Rating ExampleTABLE 8.4 Weights, Scores, and Solution

SCORES

(OUT OF 100) WEIGHTED SCORES

KSF WEIGHT FRANCE DENMARK FRANCE DENMARK

Labor availability and attitude

.25 70 60 (.25)(70) = 17.5 (.25)(60) = 15.0

People-to-car ratio .05 50 60 (.05)(50) = 2.5 (.05)(60) = 3.0

Per capita income .10 85 80 (.10)(85) = 8.5 (.10)(80) = 8.0

Tax structure .39 75 70 (.39)(75) = 29.3 (.39)(70) = 27.3

Education and health

.21 60 70 (.21)(60) = 12.6 (.21)(70) = 14.7

Totals 1.00 70.4 68.0


Locational

Cost-Volume Analysis

► An economic comparison of location alternatives

► Three steps in the method

1. Determine fixed and variable costs for each location

2. Plot the cost for each location

3. Select location with lowest total cost for expected production volume

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Locational Cost-Volume Analysis Example

Three locations:

Athens $30,000 $75 $180,000

Brussels $60,000 $45 $150,000

Lisbon $110,000 $25 $160,000

Fixed Variable TotalCity Cost Cost Cost

Total Cost = Fixed Cost + (Variable Cost x Volume)

Selling price = $120Expected volume = 2,000 units



Crossover point – Athens/Brussels

30,000 + 75(x) = 60,000 + 45(x)30(x) = 30,000

(x) = 1,000

60,000 + 45(x) = 110,000 + 25(x)20(x) = 50,000

(x) = 2,500

Crossover point – Brussels/Lisbon



–$180,000 –

–$160,000 –$150,000 –

–$130,000 –

–$110,000 –

––

$80,000 ––

$60,000 –––

$30,000 ––

$10,000 ––

Annual cost

| | | | | | |

0 500 1,000 1,500 2,000 2,500 3,000

Volume

Athens lowest cost

Brusselslowest cost

Lisbon lowest cost

Figure 8.2


Center-of-Gravity Method

► Finds location of distribution center that minimizes distribution costs

► Considers

► Location of markets

► Volume of goods shipped to those markets

► Shipping cost (or distance)



► Place existing locations on a coordinate grid

► Grid origin and scale is arbitrary

► Maintain relative distances

► Calculate x and y coordinates for ‘center of gravity’

► Assumes cost is directly proportional to distance and volume shipped



where dix = x-coordinate of location i

diy = y-coordinate of location i

Qi = Quantity of goods moved to or from location i

=

dixQi

i

∑

Qi

i

∑x-coordinate of the

center of gravity

=

diyQi

i

∑

Qi

i

∑y-coordinate of the

center of gravity

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TABLE 8.5 Demand for Quain’s Discount Department Stores

STORE LOCATION

NUMBER OF CONTAINERS

SHIPPED PER MONTH

Chicago 2,000

Pittsburgh 1,000

New York 1,000

Atlanta 2,000



North-South

East-West

120 –

90 –

60 –

30 –

–| | | | | |

30 60 90 120 150Arbitrary origin

Chicago (30, 120)New York (130, 130)

Pittsburgh (90, 110)

Atlanta (60, 40)

Figure 8.3

d1x = 30d1y = 120Q1 = 2,000



x-coordinate =(30)(2000) + (90)(1000) + (130)(1000) + (60)(2000)

2000 + 1000 + 1000 + 2000

= 66.7

y-coordinate =(120)(2000) + (110)(1000) + (130)(1000) + (40)(2000)

2000 + 1000 + 1000 + 2000

= 93.3



North-South

East-West

120 –

90 –

60 –

30 –

–| | | | | |

30 60 90 120 150Arbitrary origin

Chicago (30, 120)New York (130, 130)

Pittsburgh (90, 110)

Atlanta (60, 40)

Center of gravity (66.7, 93.3)+

Figure 8.3


Transportation Model

► Finds amount to be shipped from several points of supply to several points of demand

► Solution will minimize total production and shipping costs

► A special class of linear programming problems


Worldwide Distribution of

Volkswagens and PartsFigure 8.4

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Service Location Strategy

1. Purchasing power of customer-drawing area

2. Service and image compatibility with demographics of the customer-drawing area

3. Competition in the area

4. Quality of the competition

5. Uniqueness of the firm’s and competitors’ locations

6. Physical qualities of facilities and neighboring businesses

7. Operating policies of the firm

8. Quality of management


Location StrategiesTABLE 8.6 Location Strategies – Service vs. Goods-Producing Organizations

SERVICE/RETAIL/PROFESSIONAL GOODS-PRODUCING

REVENUE FOCUS COST FOCUS

Volume/revenue

Drawing area; purchasing power Competition; advertising/pricing

Physical quality

Parking/access; security/lighting; appearance/ image

Cost determinants

RentManagement caliberOperation policies (hours, wage rates)

Tangible costs

Transportation cost of raw material Shipment cost of finished goodsEnergy and utility cost; labor; raw material; taxes, and so on

Intangible and future costs

Attitude toward unionQuality of lifeEducation expenditures by state Quality of state and local government


Location StrategiesTABLE 8.6 Location Strategies – Service vs. Goods-Producing Organizations

SERVICE/RETAIL/PROFESSIONAL GOODS-PRODUCING

TECHNIQUES TECHNIQUES

Regression models to determine importance of various factors

Factor-rating methodTraffic countsDemographic analysis of drawing areaPurchasing power analysis of areaCenter-of-gravity methodGeographic information systems

Transportation method Factor-rating method Locational cost–volume analysisCrossover charts

ASSUMPTIONS ASSUMPTIONS

Location is a major determinant ofrevenue

High customer-contact issues are criticalCosts are relatively constant for a given

area; therefore, the revenue function is critical

Location is a major determinant of costMost major costs can be identified

explicitly for each siteLow customer contact allows focus on

the identifiable costsIntangible costs can be evaluated


How Hotel Chains Select Sites

► Location is a strategically important decision in the hospitality industry

► La Quinta started with 35 independent variables and worked to refine a regression model to predict profitability

► The final model had only four variables

► Price of the inn

► Median income levels

► State population per inn

► Location of nearby colleges

r2 = .51

51% of the profitability is predicted by

just thesefour variables!


Geographic Information

Systems (GIS)

► Important tool to help in location analysis

► Enables more complex demographic analysis

► Available data bases include

► Detailed census data

► Detailed maps

► Utilities

► Geographic features

► Locations of major services


Geographic Information

Systems (GIS)

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Layout Strategies


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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© 2014 Pearson Education 8 - 52© 2014 Pearson Education

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

Six out of the seven are layout

decisions!



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

▶ Flexible zone for kids and families

▶ Facility layout is a source of competitive advantage

© 2014 Pearson Education 8 - 54© 2014 Pearson Education

Strategic Importance of Layout

Decisions

The objective of layout strategy is to develop an effective and

efficient layout that will meet the firm’s competitive requirements

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Layout Design Considerations

► Higher utilization of space, equipment, and people

► Improved flow of information, materials, or people

► Improved employee morale and safer working conditions

► Improved customer/client interaction

► Flexibility


Good Layouts Consider

► Material handling equipment

► Capacity and space requirements

► Environment and aesthetics

► Flows of information

► Cost of moving between various work areas


Types of Layout

1. Office layout

2. Retail layout

3. Warehouse layout

4. Fixed-position layout

5. Process-oriented layout

6. Work-cell layout

7. Product-oriented layout


Types of Layout

1. Office layout: Positions workers, their equipment, and spaces/offices to provide for movement of information

2. Retail layout: Allocates shelf space and responds to customer behavior

3. Warehouse layout: Addresses trade-offs between space and material handling


Types of Layout

4. Fixed-position layout: Addresses the layout requirements of large, bulky projects such as ships and buildings

5. Process-oriented layout: Deals with low-volume, high-variety production (also called job shop or intermittent production)


Types of Layout

6. Work cell layout: Arranges machinery and equipment to focus on production of a single product or group of related products

7. Product-oriented layout: Seeks the best personnel and machine utilizations in repetitive or continuous production

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Layout StrategiesTABLE 9.1 Layout Strategies

OBJECTIVES EXAMPLES

Office Locate workers requiring frequent contact close to one another

Allstate Insurance Microsoft Corp.

Retail Expose customer to high-margin items

Kroger’s SupermarketWalgreen’sBloomingdale’s

Warehouse

(storage)

Balance low-cost storage with low-cost material handling

Federal-Mogul’s warehouseThe Gap’s distribution center

Project (fixed

position)

Move material to the limited storage areas around the site

Ingall Ship Building Corp.Trump PlazaPittsburgh Airport


Layout StrategiesTABLE 9.1 Layout Strategies

OBJECTIVES EXAMPLES

Job Shop

(process

oriented)

Manage varied material flow for each product

Arnold Palmer HospitalHard Rock CafeOlive Garden

Work Cell

(product

families)

Identify a product family, build teams, cross train team members

Hallmark CardsWheeled Coach Ambulances

Repetitive/

Continuous

(product

oriented)

Equalize the task time at each workstation

Sony’s TV assembly lineToyota Scion


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 state of flux due to frequent technological changes


Relationship Chart

Figure 9.1


Office Layout

► Three physical and social aspects

► Proximity

► Privacy

► Permission

► Two major trends

► Information technology

► Dynamic needs for space and services


Supermarket Retail Layout

▶ Objective is to maximize profitability per square foot of floor space

▶ Sales and profitability vary directly with customer exposure

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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 to both sides of an aisle and disperse them to increase viewing of other items

4. Use end-aisle locations

5. Convey mission of store through careful positioning of lead-off department


Store Layout

Figure 9.2


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


Servicescapes1. Ambient conditions - background

characteristics such as lighting, sound, smell, and temperature

2. Spatial layout and functionality - which involve customer circulation path planning, aisle characteristics, and product grouping

3. 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



Layouts

► 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

Material Handling Costs

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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 RFIDidentification used foradvanced shipmentnotification as materials are unloaded


Random Stocking► Typically requires automatic identification

systems (AISs) and effective information systems

► 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 areas8 - 76© 2014 Pearson Education

Customizing

▶ Value-added activities performed at the warehouse

▶ Enable low cost and rapid response strategies

▶Assembly of components

▶ Loading software

▶Repairs

▶Customized labeling and packaging


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


Alternative Strategy

▶ As much of the project as possible is completed off-site in a product-oriented facility

▶ This can significantly improve efficiency but is only possible when multiple similar units need to be created

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Process-Oriented Layout

▶ Like machines and equipment are grouped together

▶ Flexible and capable of handling a wide variety of products or services

▶ Scheduling can be difficult and setup, material handling, and labor costs can be high


Surgery

Radiology

ER triage room

ER Beds Pharmacy

Emergency room admissions

Billing/exit

Laboratories


Patient A - broken leg

Patient B - erratic heart pacemaker

Figure 9.3



▶ 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



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

Minimize cost = XijCij

j=1

n

∑i=1

n

∑


Process Layout Example

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

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.


Department Assembly Painting Machine Receiving Shipping Testing(1) (2) Shop (3) (4) (5) (6)

Assembly (1)

Painting (2)

Machine Shop (3)

Receiving (4)

Shipping (5)

Testing (6)

Number of loads per week

50 100 0 0 20

30 50 10 0

20 0 100

50 0

0

Process Layout ExampleFigure 9.4

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Area A Area B Area C

Area D Area E Area F

60’

40’


Receiving Shipping TestingDepartment Department Department

(4) (5) (6)

Figure 9.5

Assembly Painting Machine ShopDepartment Department Department

(1) (2) (3)



Interdepartmental Flow Graph Figure 9.6

100

50

50

10100

30 Machine Shop (3)

Testing (6)

Shipping (5)

Receiving (4)

Assembly(1)

Painting (2)


Cost = XijCij

j=1

n

∑i=1

n

∑


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



Revised Interdepartmental Flow GraphFigure 9.7

30

50

50

50 100

100 Machine Shop (3)

Testing (6)

Shipping (5)

Receiving (4)

Painting(2)

Assembly (1)


Cost = XijCij

j=1

n

∑i=1

n

∑


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


Area A Area B Area C

Area D Area E Area F

60’

40’


Receiving Shipping TestingDepartment Department Department

(4) (5) (6)

Figure 9.8

Painting Assembly Machine ShopDepartment Department Department

(2) (1) (3)

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Computer Software

▶ Graphical approach only works for small problems

▶ Computer programs are available to solve bigger problems

► CRAFT

► ALDEP

► CORELAP

► Factory Flow

► Proplanner


Computer Software

▶ Proplanner analysis

▶Distance traveled reduced by 38%

Before

After


Computer Software

▶ Three dimensional visualization software allows managers to view possible layouts and assess process, material handling, efficiency, and safety issues


Work Cells

▶ Reorganizes people and machines into groups to focus on single products 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 inventories

4. Reduced direct labor cost

5. Heightened sense of employee participation

6. Increased equipment and machinery utilization

7. Reduced investment in machinery and equipment


Requirements of Work Cells

▶ Identification of families of products

▶ A high level of training, flexibility and empowerment of employees

▶ Being self-contained, with its own equipment and resources

▶ Test (poka-yoke) at each station in the cell

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Improving Layouts Using Work Cells

Current layout - workers in small closed areas.

Improved layout - cross-trained workers can assist each other. May be able to add a third worker as additional output is needed.

Figure 9.9 (a)

Material


Improving Layouts Using Work Cells

Current layout - straight lines make it hard to balance tasks because work may not be divided evenly

Improved layout - in U shape, workers have better access. Four cross-trained workers were reduced.

Figure 9.9 (b)

U-shaped line may reduce employee movement and space requirements while enhancing communication, reducing the number of workers, and facilitating inspection


Staffing and Balancing Work

Cells

Determine the takt time

Takt time =Total work time available

Units required

Determine the number of operators required

Workers required =Total operation time required

Takt time


Staffing Work Cells Example

600 Mirrors per day requiredMirror production scheduled for 8 hours per dayFrom a work balance

chart total operation time = 140 seconds

Standard time required

Operations

Assemble Paint Test Label Pack forshipment

60

50

40

30

20

10

0Figure 9.10


Staffing Work Cells Example

600 Mirrors per day requiredMirror production scheduled for 8 hours per dayFrom a work balance

chart total operationtime = 140 seconds

Takt time = (8 hrs x 60 mins) / 600 units = .8 min = 48 seconds

Workers required =Total operation time required

Takt time

= 140 / 48 = 2.92


Work Balance Charts

▶ Used for evaluating operation times in work cells

▶ Can help identify bottleneck operations

▶ Flexible, cross-trained employees can help address labor bottlenecks

▶Machine bottlenecks may require other approaches

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Focused Work Center and Focused Factory

▶ Focused Work Center

▶ Identify a large family of similar products that have a large and stable demand

▶Moves production from a general-purpose, process-oriented facility to a large work cell

▶ Focused Factory

▶A focused work cell in a separate facility

▶May be focused by product line, layout, quality, new product introduction, flexibility, or other requirements


Repetitive and Product-Oriented Layout

1. Volume is adequate for high equipment utilization

2. Product demand is stable enough to justify high investment in specialized equipment

3. Product is standardized or approaching a phase of life cycle that justifies investment

4. Supplies of raw materials and components are adequate and of uniform quality

Organized around products or families of similar high-volume, low-variety products


Product-Oriented Layouts► Fabrication line

► Builds components on a series of machines

► Machine-paced

► Require mechanical or engineering changes to balance

► Assembly line

► Puts fabricated parts together at a series of workstations

► Paced by work tasks

► Balanced by moving tasks

Both types of lines must be balanced so that the time to

perform the work at each station is the

same


Product-Oriented Layouts

1. Low variable cost per unit

2. Low material handling costs

3. Reduced work-in-process inventories

4. Easier training and supervision

5. Rapid throughput

Advantages

1. High volume is required

2. Work stoppage at any point ties up the whole operation

3. Lack of flexibility in product or production rates

Disadvantages


McDonald’s Assembly Line

Figure 9.11


Assembly-Line Balancing

▶ Objective is to minimize the imbalance between machines or personnel while meeting required output

▶ Starts with the precedence relationships

▶Determine cycle time

▶Calculate theoretical minimum number of workstations

▶Balance the line by assigning specific tasks to workstations

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TABLE 9.2 Precedence Data for Wing Component

TASK

ASSEMBLY TIME

(MINUTES)

TASK MUST FOLLOW

TASK LISTED BELOW

A 10 –

B 11 A

C 5 B

D 4 B

E 11 A

F 3 C, D

G 7 F

H 11 E

I 3 G, H

Total time 65

Wing Component Example

This means that tasks B and E cannot be done until task A has been completed


TABLE 9.2Precedence Data for Wing Component

TASK

ASSEMBLY TIME

(MINUTES)

TASK MUST

FOLLOW TASK

LISTED BELOW

A 10 –

B 11 A

C 5 B

D 4 B

E 11 A

F 3 C, D

G 7 F

H 11 E

I 3 G, H

Total time 65


I

GF

C

D

H

B

E

A

10

1111

5

43

711 3

Figure 9.12

480 available mins per day

40 units required

Cycle time =

Production time available per day

Units required per day

= 480 / 40

= 12 minutes per unit

=

Time for task ii=1

n

∑

Cycle time

Minimum number of workstations

= 65 / 12

=5.42, or 6 stations


TABLE 9.3Layout Heuristics That May Be Used to Assign Tasks to Workstations in Assembly-Line Balancing

1. Longest task time From the available tasks, choose the task with the largest (longest) task time

2. Most following tasks From the available tasks, choose the task with the largest number of following tasks

3. Ranked positional weight

From the available tasks, choose the task for which the sum of following task times is the longest

4. Shortest task time From the available tasks, choose the task with the shortest task time

5. Least number of following tasks

From the available tasks, choose the task with the least number of subsequent tasks




Station 1

Station 2

Station 3Station 4

Station 3

Station 5

Station 6Station 6

I

GF

H

C

D

B

E

A

10 11

11

5

4

3 7

11

3

Figure 9.13


40 units required

Cycle time = 12 mins

Minimum workstations = 5.42 or 6


TABLE 9.2Precedence Data for Wing Component

TASK

ASSEMBLY TIME

(MINUTES)

TASK MUST

FOLLOW TASK

LISTED BELOW

A 10 –

B 11 A

C 5 B

D 4 B

E 11 A

F 3 C, D

G 7 F

H 11 E

I 3 G, H

Total time 65


I

GF

C

D

H

B

E

A

10

1111

5

43

711 3

Figure 9.12


40 units required

Cycle time = 12 mins

Minimum workstations = 5.42 or 6

Efficiency =∑ Task times

(Actual number of workstations) x (Largest cycle time)

= 65 minutes / ((6 stations) x (12 minutes))

= 90.3%


Learning Objectives

Do Do you you able able to:to:

1. Identify objective of location strategy, international location issues, clustering, fixed-position, process-oriented and product-oriented layout, work cells, focused work center, office layout, retail layout, warehouse layout and assembly line.

2. Analyze location problem by factor-rating method, locational break-even analysis and center-of-gravity method.

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Learning Objectives

Do Do you you able able to:to:

3. Design to achieve good layout for process facility and balance production flow in a repetitive or product-oriented facility


Additional Material(s)

Kindly read the additional material(s) for Kindly read the additional material(s) for further understanding and refer to your further understanding and refer to your lecturer for further explanation.lecturer for further explanation.

1. www.youtube.com/watch?v=AUHtDJIPgTE

2. www.youtube.com/watch?v=vTUjEVCXTlA

3. www.youtube.com/watch?v=hmIrj_bOt48

4. www.youtube.com/watch?v=r-Z22ddHb_I

5. www.youtube.com/watch?v=3ekwd7Tg0pY

Ch 05 - Location and layout strategiesportal.unimap.edu.my/portal/page/portal30/Lecture Notes/KEJURUTERAAN... · Heizer and Render Operations Management, Global Edition, Eleventh

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