Facility Location and Layout

Session Outline
 Importance of Location
 Factors Affecting the Location Decision
 General Steps in Location Selection and Location Decision Process
 Location Evaluation Methods
 Location Service Facilities
 Facility Layout
 Basic Layout Formats
 Developing a Process Layout
 Developing a Product Layout
 Developing a Cellular Manufacturing Layout
 Japanese Approaches and Trends in Manufacturing Layouts
 Service Facility Layouts
 Importance of Location
 It will fix the production technology and cost
structure
- Manufacturing facility in an under-developed
country will opt for labor intensive process.
 It depends on the size & nature of the system
- SSI selects a location near to a local market.
 Affects the company’s ability to serve its
customers quickly and conveniently.
- Service Centers are located where customer
density is more.
Factors Affecting the Location Decision
 Market Proximity
 Integration with other parts of the Organization
 Availability of Labor & Skills
 Site Cost
 Availability of Amenities
 Availability of Transportation Facilities
 Availability of Inputs
 Availability of Services
 Suitability of Land & Climate
 Regional Regulations
 Room for Expansion
 Safety Requirements
 Political,Cultural & Economic Situation
 Regional Taxes,Special Grants & Import/Export Barriers
General Steps in Location Selection and
Location Decision Process
 Define the Location Objectives & Associated Constraints
 Identify the Relevant Decision Criteria
 Relate the Objectives to the Criteria Using Appropriate Models
 Do Field Research to Get Relevant Data & Use Models to Evaluate
Alternative Locations
 Select the Location that Best Satisfies the Criteria
Location Evaluation Methods
 Cost-Profit-Volume or Break Even Analysis
 Point Rating Method
 The Transportation Method of Linear Programming
 Center of Gravity of Plant Location
 Analytic Delphi Method
 Factor rating Method
 Dimensional Analysis
 Brown and Gibson Model
Delphi Method
 Choose the experts to participate. They should be a variety of
knowledge people in different areas.
 Through a questionnaire(or e-mail), obtain forecasts from all
participants.
 Summarize the results and redistribute them to the participants along
with appropriate new questions.
 Summarize again, refining forecasts and conditions, and again develop
new questions.
 Repeat Step 4 if necessary, Distribute the final results to all
participants.
Facility Layout
Facility Layout means planning for the location of all
machines,utilities, employee workstations, customer
service areas,material storage areas, aisles, rest rooms,
lunch rooms,drinking fountains,internal walls,offices and
computer rooms, and for the flow patterns of the materials
and people around,into, and within buildings.
Facility Layout
Major Objectives of an Ideal Layout –
1. Providing enough production capacity
2. Reducing material handling costs
3. Reducing accidents and hazards to personnel
4. Reducing congestion & utilizing the space efficiently
and effectively
5. Efficient utilization of labor & increase in employee
morale
6. Easy Supervision
7. Easy maintenance & high machine/equipment
utilization
8. Improve in productivity
 Facility Layout
Criteria for a good layout –
 Maximum Flexibility –
A good layout can be rapidly modified with the changing
environment.
 Maximum Coordination –
Easy & smooth coordination of activities between
departments.
 Maximum Visibility –
All the entities should be readily observable at all times.
 Maximum accessibility –
All the servicing & maintenance points should be readily
accessible.
Facility Layout
Criteria for a good layout –
 Minimum Distance –
All movements should be direct. Unnecessary and circuitous
movements should be avoided.
 Minimum Handling –
Handling of material & information should be minimized.
 Inherent Safety –
Safety should be an important consideration for each and
every layout.
 Efficient Process Flow –
Material & information must flow in one direction only.
 Identification –
Workers must be provided with their own work space.
Basic Layout Formats
The formats by which departments are arranged in a facility
are defined by the general pattern of work flow –
 Process Layout
 Product Layout
 Grouping Technology Layout
 Fixed Position Layout
Basic Layout Formats
Process Layout ( also called job-shop or functional layout)-
It is a format in which similar equipments or functions are
grouped together, such as all lathes in one area and all
stamping machines in another. A part being worked and
then travels, according to the established sequence of
operations, from area to area, where the proper machines
are located for each operation.
Example – Hospitals where areas are dedicated to particular
types of medical care.
Basic Layout Formats
Process Layout ( also called job-shop or functional layout)-
Advantages –
1. Greater flexibility in production.
2. Better & more efficient supervision is possible through
specialization.
3. Breakdown of equipment can easily be handled by
transferring work to another machine.
4. The capacity of different production lines can be
expanded easily.
5. Better utilization of men & machine is possible through
this layout.
 Basic Layout Formats
Process Layout ( also called job-shop or functional layout)-
Disadvantages –
1. Production requires more time as work-in-progress has to
travel from one place to another in search of machines.
2. This type of layout requires more floor space and there
might be difficulties in production.
3. There will be accumulation of work at different production
units.
Basic Layout Formats
Product Layout ( also called flow-shop layout)-
It is a format in which equipment or work processes are
arranged according to the progressive steps by which the
product is made.The path for each part is,a straight line.
Example – Production line for shoes, chemical plants and car
washes are all product layouts.
Basic Layout Formats
Product Layout ( also called flow-shop layout)-
Advantages –
1. Mechanization of materials is possible and material
handling costs can be reduced considerably.
2. This layout requires less floor space per unit of
production.
3. This layout facilitates better production control and
production bottlenecks can be avoided.
Basic Layout Formats
Product Layout ( also called flow-shop layout)-
Disadvantages –
1. Expansion of the production line is difficult.
2. There is difficulty in supervising.
3. Breakdown of equipment may disrupt the entire process.
Basic Layout Formats
Grouping Technology Layout ( also called cellular
manufacturing layout)-
It groups dissimilar machines into work centers ( or cells) to
work on products that have similar shapes and
processing requirements. A group technology (GT)
layout is similar to a process layout where cells are
designed to perform a specific set of processes, and it is
similar to product layout in that the cells are dedicated to
a limited range of products. It also refers to the parts
classification and coding system used to specify machine
types that go into the cell.
Example –Metal fabricating, Computer Chip Manufacture.
 Basic Layout Formats
Grouping Technology Layout ( also called cellular
manufacturing layout)-
Advantages –
1. Simplify machine changeovers.
2. Reduce material handling costs.
3. Quicker manufacturing and shipping.
4. Reduce the in-process inventory.
5. Automate the production quickly.
6. Better human relations.
7. Improve operator expertise.
8. Faster production set-up.
Disadvantage –
1. Reduce manufacturing flexibility.
 Basic Layout Formats
Fixed-Position Layout -
In this type of layout, the product (by virtue of its bulk or
weight) remains stationary at one location.
Manufacturing equipments are moved to the product
rather than vice-versa.

Example – Construction Site, Movie Lots,Ship Construction,

Aircraft Assembly, Rocket Assembly
Advantages –
1. Less investment on layout
2. Avoidance of transporting bulky materials
Developing a Process Layout
 Graphic and Schematic Analysis
 Computer Models –
Computerized Relative Allocation of Facilities Technique
(CRAFT)
 Load Distance Model
 Developing a Product Layout
Line Balancing –
 Draw the Precedence Diagram
 Determine the required workstation cycle time ( C )
C = Production Time per day / Required Output per day (units)
 Determine the theoretical min. no. of workstation ( Nt)
Nt = Sum of task time (T) / Cycle time ( C )
 A set of rules is identified to shortlist and select the tasks to be
assigned to workstations.
 This set of rules is applied iteratively till the tasks are
assigned. At the end of this process, the actual no. of
workstation (Na ) required may be greater than or equal to
(Nt).
 Developing a Product Layout
Line Balancing –
 Efficiency = T / ( Na X C )
 If the efficiency is unsatisfactory, using a different decision
rule.
Developing a Cellular Manufacturing Layout
It comprises three steps –
 The parts that follow a common sequence of steps are
grouped into a family.
 The dominant flow patterns of parts-families are identified
as a basis for location or relocation.
 Finally, the machines and processes are physically grouped
into cells. The machinery part that cannot be grouped with
any cell or family are placed in a remainder cell.
Thank You