Chapter7

To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved.

Chapter 7 Chapter 7

Location Location and and LayoutLayout


Managing Managing Global Global OperationsOperations Other LanguagesOther Languages Different Norms and Different Norms and

CustomsCustoms Workforce ManagementWorkforce Management Unfamiliar Laws and Unfamiliar Laws and

RegulationsRegulations Unexpected Cost MixUnexpected Cost Mix


Location Decisions Location Decisions - Manufacturing- Manufacturing Favorable Labor ClimateFavorable Labor Climate Proximity to MarketsProximity to Markets Quality of LifeQuality of Life Proximity to SuppliersProximity to Suppliers Proximity to Parent CompanyProximity to Parent Company Utilities, Taxes, and Real Utilities, Taxes, and Real

Estate CostsEstate Costs


Location Decisions Location Decisions - Services- Services

Proximity to CustomersProximity to Customers Transportation Costs and Transportation Costs and

Proximity to MarketsProximity to Markets Location of CompetitorsLocation of Competitors Site-Specific FactorsSite-Specific Factors


LocatioLocationnHealth-WatchHealth-WatchNorth

Erie

PittsburghHarrisburg

Philadelphia

Scranton

Uniontown

State College

Example 7.1


LocatioLocationnHealth-WatchHealth-WatchNorth

Erie

PittsburghHarrisburg

Philadelphia

Scranton

Uniontown

State College

Example 7.1

Location Factor Weight Score

Total patient miles per month 25 4Facility utilization 20 3Average time per emergency trip 20 3Expressway accessibility 15 4Land and construction costs 10 1Employee preference 10 5


LocatioLocationnHealth-WatchHealth-Watch

Center of Gravity ApproachCenter of Gravity Approach

North

B

A CE

GFD

(2.5, 4.5) [2]

(2.5, 2.5) [5] (5, 2)

[7](7, 2) [20]

(9, 2.5) [14]

(8, 5) [10]

(5.5, 4.5) [10]

x (miles) East1 2 3 4 5 6 7 8 9 10

1

2

3

4

5

6

0

yy (m

iles)

(mile

s)

Example 7.2


LocatioLocationnHealth-WatchHealth-Watch

Center of Gravity ApproachCenter of Gravity Approach

North

B

A CE

GFD

(2.5, 4.5) [2]

(2.5, 2.5) [5] (5, 2)

[7](7, 2) [20]

(9, 2.5) [14]

(8, 5) [10]

(5.5, 4.5) [10]

x (miles) East1 2 3 4 5 6 7 8 9 10

1

2

3

4

5

6

0

yy (m

iles)

(mile

s)

CensusCensus Population PopulationTractTract ((xx, , yy)) ((ll)) lxlx lyly

AA (2.5, 4.5)(2.5, 4.5) 22BB (2.5, 2.5)(2.5, 2.5) 55CC (5.5, 4.5)(5.5, 4.5) 1010DD (5, 2)(5, 2) 77EE (8, 5)(8, 5) 1010FF (7, 2)(7, 2) 2020GG (9, 2.5)(9, 2.5) 1414

Example 7.2


LocatioLocationnBreak-Even AnalysisBreak-Even Analysis



Fixed CostsFixed Costs Variable CostsVariable Costs Total CostsTotal CostsCommunityCommunity per Yearper Year per Unitper Unit (Fixed + Variable)(Fixed + Variable)

AA $150,000$150,000 $62$62BB $300,000$300,000 $38$38CC $500,000$500,000 $24$24DD $600,000$600,000 $30$30

Example 7.3



Q (thousands of units)

0

200

400

600

800

1000

1200

1400

1600

2 4 6 8 10 12 14 16 18 20 22

A best B best C best

Break-even point

6.25 14.3

A

DBC

(20, 1390)

(20, 1200)

(20, 1060)

(20, 980)

An

nu

al c

ost

(th

ou

san

ds

of

do

llars

)

Break-even point

Figure 7.1


Absolute Absolute LocationsLocations

Frozen foods

Dry groceries

Bread Vegetables

Meats

(a) Original layout

Figure 7.4


Absolute Absolute LocationsLocations

(b) Revised layout

Frozen foods

Dry groceries

BreadVegetables

Meats

Figure 7.4


Layout TypesLayout Types

FoundryMilling

machines

LathesGrinding

Painting Drills

Office

Welding

Forging

(a) Layout of a job shopFigure 7.5


Layout TypesLayout Types

Station 1 Station 2 Station 3 Station 4

(b) Layout of a production line

Figure 7.5


Group Group TechnologyTechnology

Figure 7.6

Drilling

D D

D D

Grinding

G G

G G

G G

Milling

M M

M M

M M

Assembly

A A

A A

Lathing

Receiving and shipping

L

L L

L L

L L

L



(a) Jumbled flows in a job shop without GT cells

Drilling

D D

D D

Grinding

G G

G G

G G

Milling

M M

M M

M M

Assembly

A A

A A

Lathing

Receiving and shipping

L

L L

L L

L L

L

Figure 7.6

Source: Mikell P. Groover. Automation, Production Systems, and Computer-Aided Manufacturing. Upper Saddle River, NJ: Prentice Hall, 1980, pp. 540–541. Used by permission.



(b) Line flows in a job shop with three GT cells Figure 7.6

Source: Mikell P. Groover. Automation, Production Systems, and Computer-Aided Manufacturing. Upper Saddle River, NJ: Prentice Hall, 1980, pp. 540–541. Used by permission.

Cell 3

L M G G

Cell 1 Cell 2

Assembly area

A A

L M DL

L MShipping

D

Receiving

G


60'

90'

2 4 3

6 5 1

Longhorn Longhorn MachineMachine

Trips between Departments

Department 1 2 3 4 5 6

1. Burr and grind —

2 .NC equipment —

3. Shipping and receiving —

4. Lathes and drills —

5. Tool crib —

6. Inspection —


60'

90'

2 4 3

6 5 1




1. Burr and grind — 20 20 80

2. NC equipment — 10 75

3. Shipping and receiving — 15 90

4. Lathes and drills — 70

5. Tool crib —

6. Inspection —


Closeness Rating between Departments


1. Burr and grind —

2. NC equipment —

3. Shipping and receiving —

4. Lathes and drills —

5. Tool crib —

6. Inspection —

60'

90'

2 4 3

6 5 1


Closeness Rating

Rating Definition

A Absolutely necessaryE Especially importantI ImportantO Ordinary closenessU UnimportantX Undesirable




1. Burr and grind — E U I U A

2. NC equipment — O U E I

3. Shipping and receiving — O U A

4. Lathes and drills — E X

5. Tool crib — U

6. Inspection —

60'

90'

2 4 3

6 5 1


Closeness Rating

Rating Definition

A Absolutely necessaryE Especially importantI ImportantO Ordinary closenessU UnimportantX Undesirable




1. Burr and grind — E U I U A(3,1) (2,1) (1)

2. NC equipment — O U E I(1) (1) (6)

3. Shipping and receiving — O U A(1) (1)

4. Lathes and drills — E X(1) (5)

5. Tool crib — U

6. Inspection —

60'

90'

2 4 3

6 5 1


Explanation Codes

Code Meaning

1 Materials handling2 Shared personnel3 Ease of supervision4 Space utilization5 Noise6 Employee attitudes


60'

90'

2 4 3

6 5 1


60'

90'

2 4 3

6 5 1

Departments 3 and 6 close together Departments 1 and 6 close together Departments 2 and 5 close together Departments 4 and 5 close together

Figure 7.7


60'

90'

2 4 3

6 5 1


60'

90'

4 3

Departments 3 and 6 close together Departments 1 and 6 close together Departments 2 and 5 close together Departments 4 and 5 close together

61

5

2

Figure 7.8


60'

90'

2 4 3

6 5 1


Example 7.6



1. Burr and grind — 20 20 80

2. NC equipment — 10 75

3. Shipping and receiving — 15 90

4. Lathes and drills — 70

5. Tool crib —

6. Inspection —


60'

90'

2 4 3

6 5 1


Load Distance Analysis

Current Plan Proposed Plan

Dept Closeness Distance DistancePair Factor, l d ld Score d ld Score

1,2 20 3 60 1 201,4 20 2 40 1 201,6 80 2 160 1 802,3 10 2 20 3 302,5 75 2 150 1 753,4 15 1 15 1 153,6 90 3 270 1 904,5 70 1 70 1 70

ld =785 ld = 400

Example 7.6


Line BalancingLine Balancing

Green Grass, Inc.Big Broadcaster


Line BalancingLine BalancingBig Broadcaster

A Bolt leg frame to hopper 40 NoneB Insert impeller shaft 30 AC Attach axle 50 AD Attach agitator 40 BE Attach drive wheel 6 BF Attach free wheel 25 CG Mount lower post 15 CH Attach controls 20 D, EI Mount nameplate 18 F, G

Total 244

Work Time ImmediateElement Description (sec) Predecessor(s)

Example 7.7

Chapter7

Business

upper saddle river

longhorn machine

prentice hall

ordinary closeness

job shop

nc equipment 3

longhorn machine 60

tool crib 6