Facility Planning 1791

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Facility Planning Definition and Objectives Engineering Design Process Important Factors to Evaluate Facility Plans Evaluation of Alternative Facility Plans- Pairwise Comparison Technique - Prioritization Matrix - Factor Analysis Technique

Material Handling Checklist Principles of Material Handling Objectives of Facility Layout Traditional Facility Layout Procedures- Naddlers Ideal System Approach - Apples Plant Layout Procedure - Muthers Systematic Layout Planning - Immers Basic Steps - Reeds Plant Layout Procedure

Information Gathering- Information about Product - Information about Schedule - Information about Process

Definition of Facility PlanningFacility Planning determines how an activitys tangible fixed assets best support achieving the activitys objectives.Examples:a. In manufacturing, the objective is to support production.b. In an airport, the objective is to support the passenger airplane interface. c. In a hospital, the objective is to provide medical care to patients.

Hierarchy of Facility PlanningFacility Location Facility Planning Facility Design Structural Design Layout Design Handling System Design Location: is the placement of a facility with respect to customers, suppliers, and other facilities with which it interfaces. Structure: consists of the building and services (e.g., gas, water, power, heat, light, air, sewage). Layout: consists of all equipment, machinery, and furnishings within the structure. Handling System: consists of the mechanism by which all interactions required by the layout are satisfied (e.g., materials, personnel, information, and equipment handling systems).

Significance of Facility Planning1. Since 1955, approximately 8% of the gross national product (GNP) is spent in new facilities in the U.S. :Industry GNP % 3.2 1.6 1.5 1.0 8.0

Manufacturing Public Utilities Commercial Communication Total

2. It is estimated that 20 to 50 % of operating costs within manufacturing are attributed to material handling. It is generally agreed that effective facilities planning can reduce material handling costs by 10 to 30 %.

Strategic Facilities Planning Issues1. 2. Number, location, and sizes of warehouses and/or distribution centers. Centralized versus decentralized storage supplies, raw materials, work-in-process, and finished goods for single- and multi-building sites, as well as single- and multi-site companies. 3. Acquisition of existing facilities versus design of model factories and distribution centers of the future. 4. Flexibility required because of market and technological uncertainties. 5. Interface between storage and manufacturing. 6. Level of vertical integration, including "subcontract versus manufacture" decisions. 7. Control systems, including materials control and equipment control. 8. Movement of materials between buildings, between sites. 9. Changes in customers' and suppliers' technology as well as firm's own manufacturing technology and materials handling, storage, and control technology. 10. Design-to-cost goals for facilities.

Facility Planning Objectives

1. Support the organization's mission through improved material handling, materials control, and good housekeeping.

2. Effectively utilize people, equipment, space, and energy.3. Minimize capital investment. 4. Be flexible and promote ease of maintenance. 5. Provide for employee safety and job satisfaction.

Engineering Design Process Typically, design problems do not have well-defined, unique, optimum solutions. We are interested in obtaining a satisfactory solution. General Procedure for Solving Engineering Design Problems1. Formulate the problem.2. Analyze the problem. 3. Search for alternative solutions. 4. Evaluate the design alternatives.

5. Select the preferred design.6. Implement the design.

Application of the Engineering Design Process to Facility Planning1. Define (or redefine) the objective of the facility: Specify quantitatively the products to be produced or service to be provided. 2. Specify the primary and support activities to be performed in accomplishing the objective: Requirements for primary activities include operations, equipment, personnel, and material flows. 3. Determine the interrelationships among all activities: Both qualitative and quantitative relationships should be defined. 4. Determine the space requirements for all activities: These are determined considering the equipment, materials, and personnel requirements. 5. Generate alternative facility plans: Including alternative facility locations and alternative designs for the facility. 6. Evaluate alternative facility plans: Determine the important factors (see list of factors). For each candidate plan, evaluate if and how those factors will affect the facility and its operations.

Application of the Engineering Design Process to Facility Planning (cont.)7. Select a facility plan:Cost may not be the only major consideration. Use the information in step 6 to determine a plan (pairwise comparison is a good ranking procedure). 8. Implement the facility plan:

Considerable amount of planning must precede the construction of a facility or the layout of an area.9. Maintain and adapt the facility plan: The facility plan must be modified as new requirements are placed, e.g., new energy saving measures, changes in product design may require different flow pattern or handling equipment, etc. 10. Redefine the objective of the facility: Similar to step 1. Changes in product design and/or quantities may require changes into the layout plan.

Important Factors to Evaluate Facility PlansIn developing well-thought facilities design alternatives it is important to look into issues such as:a) Layout characteristics - total distance traveled

- manufacturing floor visibility- overall aesthetics of the layout - ease of adding future business b) Material handling requirements

- use for the current material handling equipment- investment requirements on new equipment - space and people requirements

Important Factors to Evaluate Facility Plans (cont.)c) Unit load implied- impact on WIP levels - space requirements - impact on material handling equipment

d) Storage strategies- space and people requirements - impact on material handling equipment - human factors risks

e) Overall building impact- estimated cost of the alternatives - opportunities for new business

Pairwise Comparison TechniqueIt is a good ranking procedure. All combinations of two candidate plans are ranked for each factor.If n = number of candidate plans, and m = number of factors, the total number of comparison is mn(n-1)/2. It is a good procedure in testing for inconsistencies, e.g., A > B, B > C, and C > A.

If there are not inconsistencies and, for example, four candidate plans (A, B, C, and D), the pairwise comparison may produce the following results: ADNext, a factor analysis technique can be used to determine the facility plan, i.e., assign a weight to each factor, and compute the total weight for each candidate plan.Factor Analysis TechniqueThe facility plan scoring method is a very popular, subjective-decision making tool that is relatively easy to use. It consists of these steps:Step 1. List all factors that are important - that have an impact on the facility plan decision.Step 2.Step 3.Assign an appropriate weight (typically between 0 and 1) to each factor based on the relative importance of each.Assign a score (typically between 0 and 100) to each facility plan with respect to each factor identified in Step 1.Step 4.Step 5.Compute the weighted score for each factor for each facility plan by multiplying its weight by the corresponding score.Compute the sum of the weighted scores for each facility plan and choose a facility plan based on these scores.Example 1A payroll processing company has recently won several major contracts in the Midwest region of the United States and Central Canada and wants to open a new, large facility to serve these areas. Because customer service is so important, the company wants to be as near its customers as possible. A preliminary investigation has shown that Minneapolis, Winnipeg, and Springfield, Illinois are the three most desirable locations,and the payroll company has to select one of these. A subsequentthorough investigation of each location with respect to eight important factors generated the raw scores and weights. Using the location scoring method, determine the best location for the new payroll processingfacility.Example 1 (cont.)Factors and weights for three locationsScore Weight 0.25 0.15 0.15 0.10 0.10 0.10 0.08 0.07 Factor Proximity to customer Land and construction prices Wage rates Property taxes Business taxes Commercial travel Insurance costs Office services Minneapolis 95 60 70 70 80 80 70 90 Winnipeg 90 60 45 90 90 65 95 90 Springfield 65 90 60 70 85 75 60 80Example 1 SolutionWeighted scores for three locationsWeighted Score Factor Minneapolis Winnipeg SpringfieldProximity to customerLand and construction prices Wage rates Property taxes23.759.00 10.50 7.0022.509.00 6.75 9.0016.2513.50 9.00 7.00Business taxesCommercial travel Insurance costs Office services8.008.00 5.60 6.309.006.50 7.60 6.308.507.50 4.80 5.60Sum of weighted scores78.1576.6572.15Prioritization MatrixThe prioritization matrix can be used to judge the relative importance of each criterion as compared to each other. Table 1 represents the prioritization of the criteria for the facilities design example. The criteria are labeled to help in building a table with weights: A. Total distance traveled B. Manufacturing floor visibility C. Overall aesthetics of the layout D. Ease of adding future business E. Use of material handling equipment G. Space requirements H. People requirements I. Impact on WIP levels J. Human factor risks K. Estimated cost of alternativeF. I