Bangalore 1 MBA, Semester 2 Operations Management Ms. Aarti Mehta Sharma

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AMITY GLOBALBUSINESS SCHOOL Bangalore

MBA, Semester 2

Operations Management

Ms. Aarti Mehta Sharma

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Facility Layout

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The configuration of departments, work centers, and equipment, with particular emphasis on movement of work (customers or materials) through the system

• This could be for new plants or could be

• Improvements in layouts already in use to introduce new methods and improvements in manufacturing procedures.

Facilities Layout

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• Requires substantial investments of money and effort

• Involves long-term commitments

• Has significant impact on cost and efficiency of operations

Importance of Layout Decisions

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Objectives of a good layout• Provide enough production capacity • Reduce material Handling costs • Reduce Congestion• Reduce accidents / hazards to personnel• Utilize labor efficiently• Provide for volume and product flexibility• Provide ease of supervision• Allow ease of maintenance• Allow high machine / equipment utilisation• The arrangement should be congruent with the flow of materials• Sequence of equipments• In addition to floor space, the vertical space should also be considered.

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Costs• Cost of movement of materials from one work area to another

• Cost of space

• Cost of production delays, if any.

• Cost of spoilage of materials

• Cost of labor dissatisfaction and health risks

• Cost of changes, if any

• Cost of customer dissatisfaction due to poor service

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• Product layouts

• Process layouts

• Fixed-Position layout

• Cellular Manufacturing

• Combination layouts

Basic Layout Types

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• Product layout – Layout that uses standardized processing operations to

achieve smooth, rapid, high-volume flow

• Suitable for assembling operations eg. Automobile industry

• No. of equipment large

• Volume of production large

• Variety of products is low ; Two products ---- two product layouts

• Flow of materials

• Sequence of equipments

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Raw materials

Finished item

Station 2

machining

Station 2

machining

Station 3

Heating

Station 3

Heating

Station 4

Painting

Station 4

Painting

Material and/or labor

Station 1drilling




Used for Repetitive or Continuous Processing

Product Layout

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AMITY GLOBALBUSINESS SCHOOL BangaloreWine mfg

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AMITY GLOBALBUSINESS SCHOOL BangalorePizza

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• High rate of output

• Low unit cost

• Labor specialization not high

• Low material handling cost

• High utilization of labor and equipment

• Established routing and scheduling

• Routing accounting and purchasing

Advantages of Product Layout

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• Creates dull, repetitive jobs

• Poorly skilled workers may not maintain equipment or quality of output

• Fairly inflexible to changes in volume

• Highly susceptible to shutdowns

• Needs preventive maintenance

• Individual incentive plans are impractical

Disadvantages of Product Layout

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Process Layout / Job Shop production

• Equipment performing similar functions is grouped together

• Volume of manufacturing is low

• Variety of products ( each customer is unique)

• Example : Customised Cars

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Drilling

Casting Machining

Heating

Packaging

Painting

Used for Intermittent processingJob Shop or Batch

Process Layout(functional)

Process Layout

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Process Layout - work travels to dedicated process centers

Milling

Assembly& Test Grinding

Drilling Plating

Process Layout

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Gearcutting

Mill Drill

Lathes

Grind

Heattreat

Assembly

111

333

222

444

222111444

111 3331111 2222

222

3333

111

444111

333333333

44444

3333

3322

222

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Exhibit 8.2 Process Layout for a Machine Shop

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• Can handle a variety of processing requirements

• Not particularly vulnerable to equipment failures

• Equipment used is less costly

• Possible to use individual incentive plans

Advantages of Process Layouts

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• In-process inventory costs can be high

• Challenging routing and scheduling

• Equipment utilization rates are low

• Material handling slow and inefficient

• Complexities often reduce span of supervision

• Special attention for each product or customer

• Accounting and purchasing are more involved

Disadvantages of Process Layouts

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AMITY GLOBALBUSINESS SCHOOL BangaloreFixed Position Layout

• The position of product is fixed

• Tools, Men and materials come to the product

• Manufacture of Large products such as locomotives, boilers, ships, hospital etc

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Advantages• Men and machines can be used for a wide variety of

operations producing different products

• Investment on layout is very small

• Worker identifies himself with the product and feels pride in it.

• Cost and difficulty of transporting a bulky product is avoided

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– Layout in which machines are grouped into a cell that can process items that have similar processing requirements

– The grouping into part families of items with similar design or manufacturing characteristics

– A complete product or part of a product is manufactured

Cellular Layouts

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•

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Process Flows before the Use of GT Cells

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Process Flows after the Use of GT Cells

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AMITY GLOBALBUSINESS SCHOOL BangaloreOne worker cell

Machine 1

Machine 2

Machine 3

Machine 4Machine

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Materials in

Finished goods out

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Advantages• Key enabler of increased production velocity and flexibility

• The reduction of capital requirements.

• Reduction of over production

• Products move through the manufacturing process one-piece at a time, at a rate determined by customers' needs

• Shifts worker responsibilities from watching a single machine, to managing multiple machines in a production cell.

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Service facility Layout• Service facilities exist to bring together customers and

facilities ( banks, hospitals ).

• Banks are designed around customer receiving and servicing

• Hospitals are designed around technology( X ray / radiology / pathology machines), processing of patients (receiving patients, settling accounts ) and operation efficiency ( surgery, gynecological, patient recovery).

• Easy entrance and parking space are an essential requirement

• Process Layout

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Arrangement of other facilities• Receiving Department

- raw materials (vendor oriented services)

• Shipping Department

- finished goods are delivered to customers

End of the plant

• Store room

- raw materials, finished goods, partly finished goods and supplies are stored

- close to the production centre

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• Inspection - of purchased material (raw materials, parts,supplies) - of work in process - of finished groupsAt every stage, every department• Maintenance - of machinery / building - heating / air conditioning - machine and equipment installation - safety devices / fire protection - collection and disposal of waste / garbage / refuse

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• Employee Facilities

- time clocks

- toilets

- drinking water

- cafeteria

- safety measures

• Other Facilities

- power generators

- water filters

- chilling plant ( close to the boiler room )

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AMITY GLOBALBUSINESS SCHOOL Bangalore Planning

• By in house engg or planning department

• Depends upon the product

• Depends upon volume

• Determine process

• Determine flow of materials

• Decide upon equipment( also for material handling) and work centres

• Determine storage requirement

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• Decide upon labor – direct / indirect

• Draw building specifications, floor plan

• Preparation of detailed layout planning

• Approval from Management

• Preparation of work schedule

• Construction starts

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Tools and Techniques• Templates

• Line Balancing

• Analysing with Computers

• Travel chart method

• Load Distance method

• Systematic Layout Planning

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AMITY GLOBALBUSINESS SCHOOL Bangalore Load distance

analysis method• For comparison of alternative layouts• Multiply actual distance moved and load (units)• Try to minimize the same

Illustration• Two layouts A and B are given• Data consists of the facility's products, distance between

depts. and travel between depts.• Determine the best layout

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Layout A

8 4 10 2 5

3 7 1 9 6

Layout B

7 1 9 6 3

4 10 2 5 8

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Dept. movement combination

Dist bet dept(ft) Dept movement combination

Dist bet dept (ft)

A B A B

1 – 5 30 30 3 – 9 30 20

1 – 7 10 10 4 – 5 30 30

1 – 9 10 10 4 – 7 10 10

1 - 10 10 10 4 – 10 10 10

2 – 5 10 10 5 – 6 10 10

2 – 6 20 20 6 – 9 10 10

2 – 10 10 10 7 – 8 20 50

3 - 6 40 10 8 - 10 20 30

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Products Department Processing Sequence

No. of products processed per month

A 1-5-4-10 1000

B 2-6-3-9 2000

C 2-10-1- 9 3000

D 1-7-8-9 1000

E 2-5-6-9 2000

F 1-7-4-10 4000

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Product Load / pm Distance per product Load * Distance

Layout A Layout B Layout A Layout B

A 1000 70 70 70,000 70,000

B 2000 90 50 1,80,000 1,00,000

C 3000 30 30 90,000 90,000

D 1000 50 90 50,000 90,000

E 2000 30 30 60,000 60,000

F 4000 30 30 1,20,000 1,20,000

Total 5,70,000 5,30,000

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Systematic Layout Planning• Service facilities• Material flow not critical• Develop a “relationship chart” / Richard Muther’s

half – matrix / fish diagram• Chart rates the relative importance of locating one

dep't close to another• Ratings are indicated by code letters a,e,i,o,u,x• Developed by trail and error

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AMITY GLOBALBUSINESS SCHOOL BangaloreReasons (optional)

Code Reason1 Type of customer2 Ease of supervision3 Common personnel4 Contact necessary5 Share same space6 psychology

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Value Closeness Line code

A Absolutely Necessary

E Especially Important

I Important

O Ordinary

U Unimportant

X Undesirable

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Nearness Diagram

Credit

Toy

Wine

Camera

Candy

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5 2 4

1 3

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AMITY GLOBALBUSINESS SCHOOL BangaloreAssembly line balancing

• Typically, sequence of tasks required to assemble a product is dictated by its design.

• For many assemblies that consist of a large number of tasks, there are a large number of ways to group tasks together into individual workstations while still ensuring the proper sequence of work.

• Assembly line balancing is a technique to group tasks among workstations so that each work-station has, ideally, the same amount of work.

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• Example: if it took 90 seconds to assemble a pen, and the work was divided evenly among three workstations, then each workstation would be assigned 30 seconds of work content per unit.

Basic assumptions:

• No idle time per workstations; and the output of the first workstation immediately becomes input to the next workstation.

• In the current example, there are no bottleneck workstations, and the flow of pens through the line is continuous.

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• Objective of assembly line balancing is to minimize the imbalance among workstations while trying to achieve a desired output rate.

• So either, one can minimize the number of workstations for a given production rate or maximize the production rate for a given number of workstations.

• Though typically carried out at the design stage of the assembly line, line balancing is also required whenever there is a change in product design and/or new product introduction.

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• Input for assembly line balancing:1. A set of tasks to be performed and the time required to

perform each task2. The precedence relations among the tasks- that is, the

sequence in which tasks must be performed, and3. The desired output rate or forecast of demand for the

assembly line.

• The first two requirements can be obtained from the product design documents

• The third one is specified by the management.

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AMITY GLOBALBUSINESS SCHOOL BangaloreAssembly line balancing: Example

• An activity consisting of three tasks: A, B and C. Task A is first, and takes 0.5 minutes Task B is next, and takes 0.3 minutes Task C is the last, and takes 0.2 minutes.

• Since, all the tasks must be performed to complete one part, total time required to complete one part is

0.5+0.3+0.2 = 1 minute.

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AMITY GLOBALBUSINESS SCHOOL BangaloreAssembly line balancing: Example

• Suppose that one worker performs all three tasks (sequentially).

• Then in an 8-hour shift, the worker could produce –

480 parts/day.

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AMITY GLOBALBUSINESS SCHOOL Bangalore Line Balancing

• Assembly line study• Equally divides the work among workers• No. of employees is minimised• Most common is a moving conveyor that passes a series of

work stations in a uniform time interval called workstation time cycle

• Assembly line balancing is the assigning of tasks to a series of workstations in such a manner that each workstation has no more than can be done in the work station time

• Idle time across all workstations is minimized

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• Precedence relationship : the order in which tasks must be performed in the assembly process.

• Precedence Diagram : circles represent tasks; arrows indicate the order of task performance

• Workstation cycle time :

= production time per day

reqd output per day (in units)

• Nt (no. of workstations) = sum of task times

cycle time

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• Assign tasks to workstation 1, 2, 3 ….• Na = actual no. of workstations• Efficiency (idle time is minimised)

= sum of task times(T)

no. of workstations(Na) × workstation cycle time

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AMITY GLOBALBUSINESS SCHOOL Bangalore Illustration

• The Model J Wagon is to be assembled on a conveyor belt. 500 wagons are required per day. Production time per day is 420 minutes, and the assembly steps and times for the wagon are given in the table. Find the balance that minimizes the number of workstations, subject to cycle time and precedence constraints.

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ASSEMBLY STEPS AND TIMES FOR MODEL J WAGON

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Task Task Time

Description Tasks that must precede

A 45 Position rear axle

B 11 Hand fasten four screws to nuts A C 9 Tighten rear axle B D 50 Position front axle

E 15 Tighten front axle D F 12 Position rear wheel # 1;fasten hubcap C G 12 Position rear wheel # 2;fasten hubcap C H 12 Position rear wheel # 3;fasten hubcap E I 12 Position rear wheel # 4;fasten hubcap E

J 8 Position wagon handle shaft on front axle assemby

F,G,H,I

K 9 Tighten bolt and nut J 195

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AMITY GLOBALBUSINESS SCHOOL Bangalore Precedence Graph

F

• A B C

G

D E H J K

I

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C = production time per day = 60 s * 420 min = 50.4

output per day 500

Convert to seconds as task time is in seconds

Minimum no. of workstations required

= 195 / 50.4 = 3.87 = 4

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Task Task time

Remaining time

Station 1 A 45 5.4 idle

Station 2 D 50 0.4 idle

Station 3 B 11 39.4

C 9 30.4

F 12 18.4

G 12 6.4

Station 4 E 15 35.4

H 12 23.4

I 12 11.4

J 8 3.4idle

Station 5 K 9 41.4 idle

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• Efficiency = T = 195 = 0.77

NaC 5 * 50.4

77 %

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Quality of a good layout• Minimise materials handling cost• Effective use of available area• Minimisation of production delays• Improved Quality Control / Avoidance of unnecessary and

costly changes• Minimum Equipment Investment• Avoidance of bottlenecks• Better production control• Better Supervision• Improved utilisation of labor• Improved Employee Morale

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2. A company wants to add a new wing to its present manufacturing shop to manufacture certain products. The two alternative layouts being considered are as below :

LAYOUT A

1 2 4 5 6

3 7

LAYOUT B

2 5 6

3

1 4 7

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Trips between departments

Distances between Departments

Layout A Layout B

1 – 2 24 50

1 – 3 24 30

1 – 4 38 46

2 – 3 44 20

2 – 4 30 72

3 – 4 44 52

4 – 5 50 40

5 – 6 50 44

5 – 7 50 60

6 - 7 40 40

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Sequence of processing is given below. Use load distance analysis to determine best layout

Products Sequence Batch size

P1 1-2-3-4-5-6-7 1400

P2 1-2-4-5-6-7 200

P3 1-3-4-5-6-7 1200

P4 1-3-4-5-7 300

P5 1-4-5-6-7 200

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3. Arrange six departments 1,2,3,4,5 and 6 in the facility outline shown below so that the nearness priorities shown in the TABLE are satisfied.

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Deptt 2 3 4 5 6

1. Reception 500 5 200 0 10

2.X Ray 10 300 0 8

3. Surgery 100 0 400

4.Examining rooms 0 15

5.Lab 3

6. Nurses station

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Department 1

Department 2

Department 3

Department 4

Department 5

Department 6

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4. X Agri products is planning to set up a regional warehouse in north eastern Maharashtra. M/s Shivajirao & Co..M/s Patil Farms,M/s Aras & Brothers, and M/s Jambhekar &Co. are its main clients in that area. The business volume with the above four is roughly in the ratio 5:4:3:2 . The distances of the clients from Lakshmipur, a town in that area :

Shivajirao 50 km North Patil 100 km North east Aras 75 km South West Jambhekar 45 km eastWhere, wrt Lakshmipur, should X Agri Poducts locate their

warehouse ?

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5. Manufacturing Engineers at Suny Manufacturing were working on a new remote controlled Monster Truck. They hired a production consultant to help them determine the best type of production process to meet the forecasted demand fo this new product. The consultant recommended that they use an assembly line that will produce 600 Monster Trucks per day to meet the demand forecast.

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The workers of the plant work 8 hours per day. The task information for the new Monster Truck is given in the table :

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Task Task Time(in secs) Preceding Tasks

A 28

B 13

C 35 B

D 11 A

E 20 C

F 6 D,E

G 23 F

H 25 F

I 37 G

J 11 G,H

K 27 I,J

Total 236

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• Draw the precedence diagram

• What is the reqd cycle time ?

• Calculate Nt and Na

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• C= 60 * 480 / 600 = 48 s

• Nt= 236 /48 = 4.92 = 5

• Na = 6

Documents

Bangalore 1 MBA, Semester 2 Operations Management Ms. Aarti Mehta Sharma