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Process Layout Chapter 8

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How Process Layout fits the Operations Management Philosophy

Operations As a Competitive Weapon Operations Strategy Project Management

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Process Strategy Process Analysis Process Performance and Quality Constraint Management Process Layout Lean Systems

Supply Chain Strategy Location Inventory Management Forecasting Sales and Operations Planning Resource Planning Scheduling

Layout Planning Layout planning is planning that involves decisions about the physical arrangement of economic activity centers needed by a facility’s various processes. Layout plans translate the broader decisions about the competitive priorities, process strategy, quality, and capacity of its processes into actual physical arrangements.

Economic activity center: Anything that consumes space -- a person or a group of people, a customer reception area, a teller window, a machine, a workstation, a department, an aisle, or a storage room.

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Layout Planning Questions Before a manager can make decisions regarding physical arrangement, four questions must be addressed. What centers should the layout include? How much space and capacity does each center need? How should each center’s space be configured? Where should each center be located? © 2007 Pearson Education

Location Dimensions The location of a center has two dimensions: Relative location: The placement of a center relative to other centers. Absolute location: The particular space that the center occupies within the facility.

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Absolute Locations vs. Relative Locations Original layout

Frozen foods Bread

Dry groceries

Meat s Vegetables

Revised layout Meat s

Frozen locations have changed but not t Four of the absolute Dry groceries

Vegetables

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foods

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Strategic Issues Layout choices can help communicate an organization’s product plans and competitive priorities. Altering a layout can affect an organization and how well it meets its competitive priorities in the following ways: Increasing customer satisfaction and sales at a retail store. Facilitating the flow of materials and information. Increasing the efficient utilization of labor and equipment. Reducing hazards to workers. Improving employee morale. Improving communication.

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Performance Criteria Customer satisfaction Level of capital investment Requirements for materials handling Ease of stockpicking Work environment and “atmosphere” Ease of equipment maintenance Employee and internal customer attitudes Amount of flexibility needed Customer convenience and levels of sales © 2007 Pearson Education

Types of Layouts Flexible-flow layout: A layout that organizes resources (employees) and equipment by function rather than by service or product. Line-flow layout: A layout in which workstations or departments are arranged in a linear path. Hybrid layout: An arrangement in which some portions of the facility have a flexible-flow and others have a line-flow layout. Fixed-position layout: An arrangement in which service or manufacturing site is fixed in place; employees along with their equipment, come to the site to do their work. © 2007 Pearson Education

A Flexible Flow Layout A job shop has a flexible-flow layout.

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Designing Flexible-Flow Layouts Step 1: Gather information Space requirements by center Available space Closeness factors: which centers need to be located close to one another.

Closeness matrix: A table that gives a measure of the relative importance of each pair of centers being located close together. Step 2: Develop a Block plan: A plan that allocates space and indicates placement of each department. Step 3: Design a detailed layout. © 2007 Pearson Education

Gather Information Example 8.1

Office of Budget Management

Space Requirements Department 1. Administration 2. Social services 3. Institutions 4. Accounting 5. Education 6. Internal audit

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Area Needed (ft2) 3,500 2,600 2,400 1,600 1,500 3,400 Total 15,000

Current Block Plan 3

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Example 8.1 Office of Budget Management Trips between Departments

Department 1. Administration 2. Social services 3. Institutions 4. Accounting 5. Education 6. Internal audit

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Departments 1 and 6 have the most interaction. Departments 3 and 5 have the next highest. Departments 2 and 3 have next priority.

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Proposed Block Plan

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First put departments 1 and 6 close together Next put departments 3 and 5 close together Then put departments 2 and 3 close together

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Applying the Weighted- Distance Method Weighted-distance method: A mathematical model used to evaluate flexible-flow layouts based on proximity factors. Euclidean distance is the straight-line distance, or shortest possible path, between two points. Rectilinear distance: The distance between two points with a series of 90 degree turns, as along city blocks.

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Distance Measures

Euclidian Distance dAB =

(xA – xB)2 + (yA – yB)2

Rectilinear Distance dAB = |xA – xB| + |yA – yB| © 2007 Pearson Education

Calculating the WD Score Example 8.2

Load Distance Analysis Current Plan

Proposed Plan

Dept Closeness Distance Distance Pair Factor, w d wd Score d wd Score 1,2 1,3 1,4 1,5 1,6 2,3 2,4 2,5 3,4 3,5 4,5 5,6

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3 6 15 12 20 16 2 1 6 27 2 2 ld = 112

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6 18 5 12 10 8 1 2 6 9 2 3 ld = 82

Line Flow Layout

A production line has a line-flow layout.

Station 1

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Station 2

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Station 4

Designing Line-Flow Layouts Line balancing is the assignment of work to stations in a line so as to achieve the desired output rate with the smallest number of workstations. Work elements are the smallest units of work that can be performed independently. Immediate predecessors are work elements that must be done before the next element can begin. Precedence diagram allows one to visualize immediate predecessors better; work elements are denoted by circles, with the time required to perform the work shown below each circle.

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Line Balancing Example 8.3

ning an assembly line to produce a new fertilizer spreader, the Big Broadcaster. Us

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Work Element A B C D E F G H I

Time Immediate Description (sec) Predecessor(s) Bolt leg frame to hopper 40 None Insert impeller shaft 30 A Attach axle 50 A Attach agitator 40 B Attach drive wheel 6 B Attach free wheel 25 C Mount lower post 15 C Attach controls 20 D, E Mount nameplate 18 F, G

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Line Balancing Green Grass, Inc. D B

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Desired Output and Cycle Time Desired output rate, r must be matched to the staffing or production plan.

ycle time, c is the maximum time allowed for work on a unit at each s c= 1 r

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Theoretical Minimum Theoretical minimum (TM ) is a benchmark or goal for the smallest number of stations possible, where total time required to assemble each unit (the sum of all work-element standard times) is divided by the cycle time. It must be rounded up

ime is the total unproductive time for all stations in the assembly of e ency (%) is the ratio of productive time to total time. nce Delay is the amount by which efficiency falls short of 100%.

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Output Rate and Cycle Time Example 8.4 Green Grass, Inc. Desired output rate, r = 2400/week Plant operates 40 hours/week r = 2400/40 = 60 units/hour Cycle time, c = 1/60 1 = 1 minute/unit r

= 60 seconds/unit

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Calculations for Example 8.4 continued Theoretical minimum (TM ) - sum of all work-element standard times divided by the cycle time. TM = 244 seconds/60 seconds = 4.067 It must be rounded up to 5 stations Cycle time: c = 1/60 = 1 minute/unit = 60 seconds/unit Efficiency (%) - ratio of productive time to total time. Efficiency = [244/5(60)]100 = 81.3% Balance Delay - amount by which efficiency falls short of 100%. (100 − 81.3) = 18.7% © 2007 Pearson Education

Line Balancing c = 60 seconds/unit TM = 5 stations Efficiency = 81.3%

Big Broadcaster

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Green Grass, Inc.

the cycle time of 60 seconds is not violated. Here we use the trial-and-error method to find

Line Balancing Solution

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50 c = 60 seconds/unit TM = 5 stations Efficiency = 81.3%

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Other Considerations In addition to balancing a line, managers must also consider four other options:

1. Pacing: The movement of product from one station to the next as soon as the cycle time has elapsed. 2. Behavioral factors of workers. 3. Number of models produced: A mixedmodel line produces several items belonging to the same family. 4. Cycle times depend on the desired output rate, and efficiency varies considerably with the cycle time selected. © 2007 Pearson Education

Creating Hybrid Layouts Layout flexibility is the property of a facility to remain desirable after significant changes occur or to be easily and inexpensively adopted in response to changes. A One-worker, multiple-machines (OWMM) cell is a one-person cell in which a worker operates several different machines simultaneously to achieve a line flow. A Cell is two or more dissimilar workstations located close together through which a limited number of parts or models are processed with line flows.

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Group Technology (GT) Group Technology (GT) is an option for achieving line-flow layouts with low-volume processes; this technique creates cells not limited to just one worker and has a unique way of selecting work to be done by the cell. The GT method groups parts or products with similar characteristics into families and sets aside groups of machines for their production.

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Before Group Technology Jumbled flows in a job shop without GT cells Lathing

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Receiving and shipping

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Applied Group Technology Line flows in a job shop with three GT cells

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Warehouse Layouts Out-and-back Pattern The most basic warehouse layout is the out-and-back pattern. The numbers indicate storage areas for same or similar items. Storage area

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Storage area © 2007 Pearson Education

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Warehouse Layouts Zone System Zones

Zones Control station Shipping doors

Click to add title

Tractor trailer

Tractor trailer Feeder lines

Feeder lines Overflow

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Office Layouts Most formal procedures for designing office layouts try to maximize the proximity of workers whose jobs require frequent interaction. Privacy is another key factor in office design. Four common office layouts: Traditional layouts Office landscaping (cubicles/movable partitions) Activity settings Electronic cottages (Telecommuting) © 2007 Pearson Education

Lean Systems Chapter 9

© 2007 Pearson Education

How Lean Systems fits the Operations Management Philosophy

Operations As a Competitive Weapon Operations Strategy Project Management

© 2007 Pearson Education

Process Strategy Process Analysis Process Performance and Quality Constraint Management Process Layout Lean Systems

Supply Chain Strategy Location Inventory Management Forecasting Sales and Operations Planning Resource Planning Scheduling

Toyota Production System (TPS) Toyota Production System (TPS) is one of the most admired lean manufacturing systems in existence. They have a process of continuous improvement. Work is completely specified as to content, sequence, timing, and outcome. Services and goods do not flow to the next available person or machine, but to a specific person or machine. Employees are stimulated to experiment to find better ways to do their jobs. Improvements to the system must be made in accordance with the scientific method, under the guidance of a teacher, at the lowest possible organizational level.

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Lean Systems Lean systems are operations systems that maximize the value added by each of a company’s activities by paring unnecessary resources and delays from them. Just-in-time (JIT) philosophy The belief that waste can be eliminated by cutting unnecessary capacity or inventory and removing non-value-added activities in operations. JIT system: A system that organizes the resources, information flows, and decision rules that enable a firm to realize the benefits of JIT principles.

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Characteristics of Lean Systems Pull method of work flow Quality at the source Small lot sizes Uniform workstation loads Standardized components & work methods Close supplier ties Flexible workforce Line flows Automation Five S Preventive maintenance © 2007 Pearson Education

Push and Pull Systems of Work Flow Push method: A method in which production of the item begins in advance of customer needs. Example: A buffet where food is prepared in advance.

Pull Method: A method in which customer demand activates production of the service or item. Example: A restaurant where food is only prepared when orders are placed.

Lean systems use the pull method of work flow. © 2007 Pearson Education

Characteristics of Lean Systems Pull method of materials flow Quality at the source Small lot sizes Uniform workstation loads Standardized components & work methods Close supplier ties Flexible workforce Line flows Automation Five S Preventive maintenance © 2007 Pearson Education

Quality at the Source Quality at the source is an organization-wide effort to improve the quality of a firm’s products by having employees act as their own quality inspectors, and never pass defective units to next stage. One approach for implementing quality at the source is to use poka-yoke, mistake-proofing methods aimed at designing fail safe systems that minimize human error. Another approach for implementing quality at the source is a practice the Japanese call jidoka, and andon, which gives machines and machine operators the ability to detect when an abnormal condition has occurred. © 2007 Pearson Education

Characteristics of Lean Systems Pull method of materials flow Quality at the source Small lot sizes Uniform workstation loads Standardized components & work methods Close supplier ties Flexible workforce Line flows Automation Five S Preventive maintenance © 2007 Pearson Education

Small Lot Sizes Lot: A quantity of items that are processed together. Setup: The group of activities needed to change or readjust a process between successive lots of items. Single-digit setup: The goal of having a setup time of less than 10 minutes. © 2007 Pearson Education

Characteristics of Lean Systems Pull method of materials flow Quality at the source Small lot sizes Uniform workstation loads Standardized components & work methods Close supplier ties Flexible workforce Line flows Automation Five S Preventive maintenance © 2007 Pearson Education

Uniform Workstation Loads A lean system works best if the daily load on individual workstations is relatively uniform. Service processes can achieve uniform workstation loads by using reservation systems (e.g., scheduled surgeries) and differential pricing to manage the demand. For manufacturing processes, uniform loads can be achieved by assembling the same type and number of units each day, thus creating a uniform daily demand at all workstations. Mixed-model assembly produces a mix of models in smaller lots. © 2007 Pearson Education

Characteristics of Lean Systems Pull method of materials flow Quality at the source Small lot sizes Uniform workstation loads Standardized components & work methods Close supplier ties Flexible workforce Line flows Automation Five S Preventive maintenance © 2007 Pearson Education

Line Flows and Automation Line Flows: Managers of hybrid-office and back-office service processes can organize their employees and equipment to provide uniform work flows through the process and, thereby, eliminate wasted employee time. Another tactic used to reduce or eliminate setups is the one-worker, multiple-machines (OWMM) approach, which essentially is a one-person line. Automation plays a big role in lean systems and is a key to low-cost operations. © 2007 Pearson Education

Characteristics of Lean Systems Pull method of materials flow Quality at the source Small lot sizes Uniform workstation loads Standardized components & work methods Close supplier ties Flexible workforce Line flows Automation Five S Preventive maintenance © 2007 Pearson Education

Five S (5S) Five S (5S) A methodology consisting of five workplace practices conducive to visual controls and lean production.

erwork), and discard the unneeded. place. Organize the work area so that it is easy to find what is needed.

Formalize the cleanliness that results from regularly doing the first three S practices so that stands, obeys, and practices the rules when in the plant. Implement mechanisms to sustain

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Continuous Improvement with Lean Sy

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The Single-Card Kanban System Kanban means “card” or “visible record” in Japanese & refers to cards used to control the flow of production through a factory. General Operating Rules: Each container must have a card. The assembly line always withdraws materials from fabrication (pull system). Containers of parts must never be removed from a storage area without a kanban being posted on the receiving post. The containers should always contain the same number of good parts. The use of nonstandard containers or irregularly filled containers disrupts the production flow of the assembly line. Only nondefective parts should be passed along. Total production should not exceed the total amount authorized on the kanbans in the system. © © 2007 2007 Pearson Pearson Education Education

Determining the Number of Containers

roduces rocker-arm assemblies for use in the steering and suspensio

ing and 0.08 day in materials handling and waiting during its manufac

believes that demand for the rocker-arm assembly is uncertain enoug

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Calculations for Example 9.1 Westerville Auto Parts

a. If each container contains 22 parts, how many containers should be author

d = 2000 units/day p = 0.02 day 0.10 w = 0.08dday c )( = 22 (w+p 1 +units k= α)

α=

c 2000( 0.08 + 0.02 )( 1 + 0.10 ) k= 22 k = 10 containers © 2007 Pearson Education

Calculations for Example 9.1

Westerville Auto Parts

ant layout would cut materials handling and waiting time per container to 0.06 day.

d = 2000 units/day p = 0.02 day 0.10 w = 0.06dday c )( = 22 (w+p 1 +units osed change from 0.08k = α)

α=

c )( 1 + 0.10 ) 2000( 0.06 + 0.02 k= 22 © 2007 Pearson Education

k = 8 containers

Value Stream Mapping Product family

Current state drawing

Future state drawing

Value stream mapping (VSM) is a qualitative lean tool for eliminating waste (or muda) that involves a current state drawing, a future state drawing, and an implementation plan.

apping (VSM) spans the entire value chain, from the firm’s receipt of raw materia Work plan & implementation

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Selected Set of Value Stream Mapping Icons

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A Representative Current State Map for a Family of Retainers at a Bearings Manufacturing Company

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Organizational Considerations The human costs: Lean system implementation requires a high degree of regimentation, and sometimes it can stress the workforce. Cooperation & Trust: Workers and first-line supervisors must take on responsibilities formerly assigned to middle managers and support staff. Reward systems and labor classifications must often be revamped when a lean system is implemented. Existing layouts may need to be changed.

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Process Considerations Inventory & Scheduling Schedule Stability: Daily production schedules in high-volume, make-to-stock environments must be stable for extended periods. Setups: If the inventory advantages of a lean system are to be realized, small lot sizes must be used. Purchasing and Logistics: If frequent, small shipments of purchased items cannot be arranged with suppliers, large inventory savings for these items cannot be realized.

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