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Introduction to Facility Planning

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Competitive Global Marketplace

Today’s world is much more competitive than the world in which our parents and grandparents worked.

“Open-market” countries depend heavily upon imported manufactured goods.

Through early 1960’s 1960’s - Present

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Competitive Global Marketplace Example LP Gas Hose - Canada

Regulator - Italy

Brass Fittings - USA

All components assembled in USA . . .

Then shipped to China for assembly into gas grills which are then shipped back to the USA for retail sale!

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Market Driven Competitiveness

Every morning in Africa, a gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed. Every morning a lion wakes up. It knows it must outrun the slowest gazelle or it will starve to death.

It doesn’t matter whether you are a lion or a gazelle—when the sun comes up, you had better be running.

Survival of the fittest!Survival of the fittest!

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Competitive Business Challenges

What makes some companies’ products seem to have a cost advantage over others?

• Better manufacturing processes• Desire to continuously improve• Streamlined plant layout

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Cycle Time“One of the most noteworthy accomplishments in keeping the price of Ford products low is the gradual shortening of the production cycle. The longer an article is in the process of manufacture and the more it is moved about, the greater is its ultimate cost.”

Henry Ford, 1926

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Cycle TimeOne factor contributing to this lengthy production cycle is the facility layout. Manufacturing facilities design and material handling affect the productivity and profitability of a company more than almost any other corporate decision.

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Brief History of Plant Layout

• Companies of the past utilized a draftsperson to complete the plant layout.

• The general belief was that there was a void of expertise in facility layout design.

• Problems could be overcome with an extra forklift or conveyor length.

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Plant Layout

Raw StockQC Rec Ship

Shear

Screw Machin

e

QCStamp

AssemblyBrak

eMill

Lathe

Weld FinishGrind Parts Stock

Drill

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Impact of Poor Plant Layout

High material handling costs Cycle and lead time delays High WIP inventories Lower quality Product damage Safety and morale problems Poor equipment utilization Congested aisles Wasted floor space

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How Can We Improve?Lean Manufacturing and Cellular Flow

6 Assemblers Batch Assembly C/T 4.5 days

Before:Before:

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How Can We Improve?Lean Manufacturing and Cellular Flow

6 Assemblers Flow / Pull C/T 53 minutes

After:After:

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Facility Improvement Pitfalls

Poorly planned layout Lack of employee involvement Lack of management commitment Budgetary constraints leading to a

“piecemeal” approach Focus on the almighty ROI versus the

future of the business Short term management focus

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Facilities Planning Definition Analysis Concept Design Implementation

For producing of products and services

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Manufacturing Savings

Where can we save costs in manufacturing?

Reduce or Eliminate-• Work-in-process inventories (WIP) • Non-value added activities • Material handling costs• Processing time• Product defects

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Manufacturing Savings

The largest components of factory labor and the cost of materials purchased and used in a factory are:

• Internal transportation costs • Material handling costs• Storage costs

This includes both our manufacturing plants and those of our suppliers!

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Facilities Layout Goals

Goals should include: Minimize unit cost. Minimize project cost. Optimize quality. Promote the effective use of (a) people, (b) space, (c)

equipment, and (d) energy. Provide for (a) employee convenience, (b) employee

safety, and (c) employee comfort. Control project cost. Achieve the production start date. Build flexibility into the plan. Reduce or eliminate excessive inventory. Achieve miscellaneous goals.

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Five Types of Facility Design Projects

1. New Facility – fewer restrictions and constraints on the layout since it is new

2. New Product – integration of a new product into the existing process and layout

3. Design Changes – incorporate the impact of design changes into the manufacturing process

4. Cost Reduction – redesign the existing layout to facilitate cost reduction programs and ideas

5. Retrofit – similar to a new facility layout except with the constraints present

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Continuous Improvement Doctrine (CID)

The continuous improvement doctrine (CID) mandates that a company will commit to continuous, ongoing

improvement plans for production processes, materials handling, and plant layout. They further recognize that

these items are essential to achieve competitive advantage. The CID plan will be developed and

maintained on an ongoing basis.

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