Facility Layout - Objectives, Design and Factors Affecting the Layout

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Introduction

For an organization to have an effective and efficient manufacturing unit, it is important that special attention is given to facility layout. Facility layout is an arrangement of different aspects of manufacturing in an appropriate manner as to achieve desired production results Facility layout considers available space, final product, safety of users and facility and convenience of operations. An effective facility layout ensures that there is a smooth and steady flow of production material, equipment and manpower at minimum cost. Facility layout looks at physical allocation of space for economic activity in the plant. Therefore, main objective of the facility layout planning is to design effective workflow as to make equipment and workers more productive.

Facility Layout Objective

A model facility layout should be able to provide an ideal relationship between raw material, equipment, manpower and final product at minimal cost under safe and comfortable environment. An efficient and effective facility layout can cover following objectives: To provide optimum space to organize equipment and facilitate movement of goods and to create safe and comfortable work environment.

To promote order in production towards a single objective To reduce movement of workers, raw material and equipment To promote safety of plant as well as its workers

To facilitate extension or change in the layout to accommodate new product line or technology upgradation To increase production capacity of the organization An organization can achieve the above-mentioned objective by ensuring the following:

Better training of the workers and supervisors. Creating awareness about of health hazard and safety standards Optimum utilization of workforce and equipment Encouraging empowerment and reducing administrative and other indirect work

Factors affecting Facility Layout

Facility layout designing and implementation is influenced by various factors. These factors vary from industry to industry but influence facility layout. These factors are as follows:

The design of the facility layout should consider overall objectives set by the organization. Optimum space needs to be allocated for process and technology. A proper safety measure as to avoid mishaps. Overall management policies and future direction of the organization

Design of Facility Layout

Principles which drive design of the facility layout need to take into the consideration objective of facility layout, factors influencing facility layout and constraints of facility layout. These principles are as follows:

Flexibility: Facility layout should provide flexibility for expansion or modification.

Space Utilization: Optimum space utilization reduces the time in material and people movement and promotes safety.

Capital: Capital investment should be minimal when finalizing different models of facility layout.

Design Layout Techniques

There are three techniques of design layout, and they are as follows:

1. Two or Three Dimensional Templates: This technique utilizes development of a scaled-down model 2. Sequence Analysis: This technique utilizes computer technology in designing the facility layout by 3. Line Balancing: This kind of technique is used for assembly line.
Types of Facility Layout
There are six types of facility layout, and they are as follows: sequencing out all activities and then arranging them in circular or in a straight line. based on approved drawings.

Line Layout Functional Layout Fixed Position Layout Cellular Technology Layout Combined Layout, and Computerized Relative Allocation of Facility Technique

Capacity Planning
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The production system design planning considers input requirements, conversion process and output. After considering the forecast and long-term planning organization should undertake capacity planning.

Capacity is defined as the ability to achieve, store or produce. For an organization, capacity would be the ability of a given system t produce output within the specific time period. In operations, management capacity is referred as an amount of the input resources available to produce relative output over period of time. In general, terms capacity is referred as maximum production capacity, which can be attained within a normal working schedule.

Capacity planning is essential to be determining optimum utilization of resource and plays an important role decision-making process, fo example, extension of existing operations, modification to product lines, starting new products, etc.

Strategic Capacity Planning

A technique used to identify and measure overall capacity of production is referred to as strategic capacity planning. Strategic capacity planning is utilized for capital intensive resource like plant, machinery, labor, etc. Strategic capacity planning is essential as it helps the organization in meeting the future requirements of the organization. Planning ensures that operating cost are maintained at a minimum possible level without affecting the quality. It ensures the organization remain competitive and can achieve the long-term growth plan.

Capacity Planning Classification

Capacity planning based on the timeline is classified into three main categories long range, medium range and short range.

Long Term Capacity: Long range capacity of an organization is dependent on various other capacities like design capacity, production capacity, sustainable capacity and effective capacity. Design capacity is the maximum output possible as indicated by equipment manufacturer under ideal working condition. Production capacity is the maximum output possible from equipment under normal working condition or day. Sustainable capacity is the maximum production level achievable in realistic work condition and considering normal machine breakdown, maintenance, etc. Effective capacity is the optimum production level under pre-defined job and work-schedules, normal machine breakdown, maintenance, etc. Medium Term Capacity: The strategic capacity planning undertaken by organization for 2 to 3 years of a time frame is referred to as medium term capacity planning. Short Term Capacity: The strategic planning undertaken by organization for a daily weekly or quarterly time frame is referred to as short term capacity planning.

Goal of Capacity Planning

The ultimate goal of capacity planning is to meet the current and future level of the requirement at a minimal wastage. The three types of capacity planning based on goal are lead capacity planning, lag strategy planning and match strategy planning.

Factors Affecting Capacity Planning

Effective capacity planning is dependent upon factors like production facility (layout, design, and location), product line or matrix, production technology, human capital (job design, compensation), operational structure (scheduling, quality assurance) and external structure ( policy, safety regulations)

Forecasting v/s Capacity Planning

There would be a scenario where capacity planning done on a basis of forecasting may not exactly match. For example, there could be a scenario where demand is more than production capacity; in this situation, a company needs to fulfill its requirement by buying from outside. If demand is equal to production capacity; company is in a position to use its production capacity to the fullest. If the demand is less than the production capacity, company can choose to reduce the production or share it output with other manufacturers

Capacity planning Introduction Capacity may be defined as the maximum or limiting capability of a production unit to produce in a specific period. This is expressed in terms output per unit of time. If stated period of time is one month, the capacity is said to be the limiting capability of the producing unit in one month, e.g. 10,000 units per month. This capacity is the capability of the producing unit under given (or specified) conditions, e.g. one shift working/ two shifts working or three shifts working or one related to the intensity of the facilities used.

Capacity Capacity of a production unit refers to the ability of a company to produce goods that are required by the customers. Capacity is the maximum limit of the load that a production unit of an organization can handle. Meaning: capacity is a limiting planning of a production unit to production with in a stated time period normally expressed as output unit per unit of time. Measures of capacity Different types of organization use different measures of capacity.

Types of capacity Designed capacity The design capacity of a system is the rate of output of goods or services under full scale operating conditions. It is based on plant design which in turn is based on long range forecast extending 5 to 10 years into the future. For example: a cement factory may be designed to produce 200 tons per day. The projected demand for a period anywhere from 5 to 10 years is taken as the estimate for the design capacity, since frequent expansion will lead to productivity loss. Effective capacity The maximum outputs of a specific product or product mix that the system of workers and equipment is capable of producing as an integrated whole is called system capacity or effective capacity. This may be less than that of design capacity. The actual output may be even less than the system capacity since it is affected by short range factors such as actual demand, equipment breakdowns, and personal absenteeism or productivity. 100 Effective capacity = achievable capacity Designed capacity Rate capacity Rate capacity is the actual capacity achievable under stated conditions. Rate capacity = achievable capacity efficiency utilization) = (designed capacity

Factors affecting determination of plant capacity 1. Market demand for a product or service. 2. The amount of capital that can be invested. 3. Degree of automation desired. 4. Level of integration (i.e. vertical integration). 5. Type of technology selected. 6. Dynamic nature of all factors affecting determination of plant capacity, viz, changes in the product design, process technology, market conditions, and product life cycle, etc. 7. Difficulty in forecasting future demand and future technology. 8. Obsolescence of product and technology over a period of time. 9. Flexibility for capacity additions. Capacity planning It is a process that helps identify the capacity of a production unit that is required for meeting the current and future customer demands. Capacity planning is required when you start a new manufacturing unit, extend the operations of an existing manufacturing unit and introduce new products in the manufacturing unit. Definition According to R. Dan Reid and Nada R. Sanders, capacity is the maximum output rate of a production or service facility and capacity planning is the process of establishing the output rate that may be needed for at a facility. Factors affecting capacity planning 1. controllable factors such as amount of labour employed, facilities installed, machines, tooling, shifts worked per day, days worked per week, overtime work, sub-contracting, alternative routing of work, preventive maintenance and number of production set-ups. 2. less controllable factors are absenteeism, labour performance, machine break-downs, material shortage,

scrap and rework and unexpected problems such as strike, lockout, fire, accidents etc.

Need for capacity planning Capacity planning is necessary when an organization decides to increase its production or introduce new products into the market. Once capacity is evaluated and a need for new or expanded facilities is determined, decisions regarding the facility location and process technology selection are taken. Thus capacity planning design includes: o Re-assessment of existing capacity o Effect of change in demand, i.e. effect of addition, deletion of products and their impact on existing capacity. o Identifying ways of meeting desired capacity a) Better utilization b) High efficiency c) Overtime d) Adding a shift Capacity planning process 1. Assessing the existing capacity: - Different use different ways to measure their production capacity. For example: general motor corporation defines capacity in terms of total no of automobiles produced per year. 2. Forecasting future capacity requirement: - To estimate the future capacity requirements of an organization, you should keep in mind the short term and long term requirements of the organization. 3. Identifying alternative ways: - After determining the existing and future capacity requirements, you may also need to identify the ways to modify the existing capacity of an organization. You can categories the strategies for modifying capacities into two responses: short term and long term responses. 4. Evaluation of short term and long term capacity requirements:- After modifying the existing capacity of an organization, you can evaluate the short term and long term capacity requirements with the help of following models: linear programming and decision tree analysis model. 5. Selective the suitable alternative: - After evaluating the short term and long term capacity requirements, a company selects and takes necessary measure to implement the best alternative for optimally utilizing the resources of an organization.

http://www.scribd.com/doc/12384865/49/Capacity-Planning-Decisions

Processes are the essence of operations management. They transform inputs into outputs. More than products or technologies, the ability to do things well--processes-constitutes a firm's competitive advantage. Process strategy is an organization's overall approach for physically producing goods and services. Process decisions should reflect how the firm has chosen to compete in

the marketplace, reinforce product decisions, and facilitate the achievement of corporate goals. A firm's process strategy defines its:

Capital intensity: The mix of capital (i.e., equipment, automation) and labor resources used in the productive process, Process flexibility: The ease with which resources can be adjusted in response to changes in demand, technology, products or services, and resource availability, Vertical integration: The extent to which the firm will produce the inputs and control the outputs of each stage of the productive process, and Customer involvement: The role of the customer in the productive process.

In this chapter we discuss the basic types of production processes, process planning, process analysis, process reengineering, and technology decisions.

Types of Processes
We introduced the product-process matrix and four types of processes in Chapter 2-projects, batch production, mass production, and continuous production. Let us look at them more closely here and explore the implications of process choice for a firm.

Projects
Projects represent one-of-a-kind production for an individual customer. They tend to involve large sums of money and last a considerable length of time. For those reasons, customers are few and customer involvement intense. Customers are heavily involved in the design of the product and may also specify how certain processes are to be carried out. In some cases, the customer will have representatives on site to observe the production process, or send in inspectors to certify quality at critical stages of project development. Most companies do not have the resources (or time) to complete all the work on a project themselves, so subcontracting is common. The production process, as well as the final product, are basically designed anew for each customer order. Thus, the

process is very flexible. And given the lengthy duration of a project, changes in customer preferences, technology, and costs cause frequent adjustments in product and process design. Managing these engineering change orders (ECO) is a major concern in project management. Another concern is keeping track of all the activities that are taking place and making sure they are completed correctly and on time, so as not to delay other activities. Cutting-edge technology, project teams, and close customer contact make project work exciting. But projects can also be risky with their large investment in resources, huge swings in resource requirements (as new projects begin and old ones end), limited learning curve, and dependence on a small customer base.

Examples of projects include constructing a building, airplane, or ship; planning a rock concert; and developing a new product. Projects are managed very differently from other types of processes. We discuss project management in detail in Chapter 17.

Batch Production
Making products one-at-a-time and treating their production as a project can be time consuming and cost-prohibitive. Most products can be made more quickly and more efficiently in volume. A production system that processes items in small groups or batches is called batch production. Batch production is characterized by fluctuating demand, short production runs of a wide variety of products, and small to moderate quantities of any given product made to customer order.

Most of the operations in batch production involve fabrication (e.g., machining) rather than assembly. Jobs are sent through the system based on their processing requirements, so that those jobs requiring lathe work are sent to one location, those requiring painting to another, and so forth. A job may be routed through many different machine centers before it is completed. If you were to track the flow of a particular customer order through the system, you would see a lot of stopping and starting as jobs queue at different machines, waiting to be processed. Work on a particular product is not continuous; it is intermittent.

Batch production systems are also known as job shops. Examples include machine shops, printers, bakeries, education, and furniture making. Advantages of this type of system are its flexibility, the customization of output, and the reputation for quality that customization implies. Disadvantages include high per-unit costs, frequent changes in product mix, complex scheduling problems, variations in capacity requirements, and lengthy job completion times.

Mass Production
Mass production is used by producers who need to create more standardized products in larger quantities than batch production can economically handle. Products are made-to-stock for a mass market, demand is stable, and volume is high. Because of the stability and size of demand, the production system can afford to dedicate equipment to the production of a particular product. Thus, this type of system tends to

be capital-intensive and highly repetitive, with specialized equipment and limited labor skills. Mass production is usually associated with flow lines or assembly lines. Flow describes how a product moves through the system from one workstation to the next in order of the processing requirements for that particular product. (Batch production cannot be set up in this way because the processing requirements are different for each customer order.) Assembly line describes the way mass production is typically arranged--most of the operations are assembly-oriented and are performed in a line. Goods that are mass-produced include automobiles, televisions, personal computers, fast food, and most consumer goods.

Advantages of mass production are its efficiency, low per-unit cost, ease of manufacture and control, and speed. Disadvantages include the high cost of equipment, underutilization of human capabilities, the difficulties of adapting to changes in demand, technology, or product design, and the lack of responsiveness to individual customer requests.

Continuous Production
Continuous processes are used for very high-volume commodity products that are very standardized. The system is highly automated (the worker's role is to monitor the equipment) and is typically in operation continuously twenty-four hours a day. The output is also continuous, not discrete--meaning individual units are measured, rather than counted. Steel, paper, paints, chemicals, and foodstuffs are produced by

continuous production. Companies that operate in this fashion are referred to as process industries.

Advantages of this type of system are its efficiency, ease of control, and enormous capacity. Disadvantages include the large investment in plant and equipment, the limited variety of items that can be processed, the inability to adapt to volume changes, the cost of correcting errors in production, and the difficulties of keeping pace with new technology.

Table 6.1 summarizes our discussion of types of processes. As we move from projects to continuous production, demand volume increases; products become more standardized; systems become more capital intensive, more automated, and less flexible; and customers become less involved. Process choice depends on a firm's strategy, the type of products, type of customers, volume of demand, and organizational capabilities. The degree of automation is one aspect of process choice that can be quantified based on cost factors and demand volume. Break-even analysis, presented in the next section, is a commonly used quantitative technique.
TYPES OF PRODUCTION SYSTEMS: There are five types of Production Systems1. CONTINUOUS/FLOW PRODUCTION SYSTEM: It is the manufacture of a product through a series of interconnected operations where material moves from one stage to another without interruption. 2. MASS PRODUCTION SYSTEM: Here goods are produced in large quantities using Standardisation, product wise layout and balanced production. 3. PROCESS PRODUCTION SYSTEM: Here production is carried out continuously through uniform and standard sequence of operations using highly sophisticated and automatic machines. 4. JOB PRODUCTION SYSTEM: It means producing goods to meet specific customer requirements or special

order, thus this process is always non-standardised. 5. BATCH PRODUCTION SYSTEM: This is the manufacture of a product in batches (small or large) or lots by a series of operations, each operation being carried out on the whole batch before any subsequent operation is undertaken.