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Copyright 2009 John Wiley & Sons, Inc.Copyright 2009 John Wiley & Sons, Inc.Beni AsllaniBeni Asllani
University of Tennessee at ChattanoogaUniversity of Tennessee at Chattanooga
Capacity and FacilitiesCapacity and FacilitiesOperations Management - 6thEdition
Operations Management - 6thEdition
Chapter 7Chapter 7
Roberta Russell & Bernard W. Taylor, IIIRoberta Russell & Bernard W. Taylor, III
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Copyright 2009 John Wiley & Sons, Inc. 7-2
Lecture OutlineLecture Outline
Capacity Planning
Basic Layouts
Designing Process Layouts
Designing Service LayoutsDesigning Product Layouts
Hybrid Layouts
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Copyright 2009 John Wiley & Sons, Inc. 7-3
Capacity
Maximum capability to produceMaximum capability to produce
Capacity planningCapacity planning establishes overall level of productiveestablishes overall level of productive
resources for a firmresources for a firm
3 basic strategies for timing of capacity3 basic strategies for timing of capacityexpansion in relation to steady growth inexpansion in relation to steady growth in
demand (lead, lag, and average)demand (lead, lag, and average)
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Copyright 2009 John Wiley & Sons, Inc. 7-4
Capacity Expansion Strategies
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Copyright 2009 John Wiley & Sons, Inc. 7-5
Capacity (cont.)
Capacity increase depends on volume and certainty of anticipated demand
strategic objectives costs of expansion and operation
Best operating level % of capacity utilization that minimizes unit costs
Capacity cushion % of capacity held in reserve for unexpectedoccurrences
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Copyright 2009 John Wiley & Sons, Inc. 7-6
cono!ies o" Scalecono!ies o" Scale
it costs less per unit to produce high levels ofoutput fixed costs can be spread over a larger number ofunits
production or operating costs do not increaselinearly with output levels
quantity discounts are available for materialpurchases
operating efficiency increases as workers gainexperience
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Best Operating Level for a Hotel
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#achine O$%ecties o"#achine O$%ecties o"'acility Layout'acility Layout
Minimize material-handling
costs Utilize space efficiently Utilize labor efficiently Eliminate bottlenecks Facilitate communication andinteraction
Reduce manufacturing cycletime
Reduce customer service time Eliminate wasted or redundantmovement
Increase capacity
Facilitate entry, exit, and placement
of material, products, and people Incorporate safety and securitymeasures
Promote product and servicequality
Encourage proper maintenanceactivities
Provide a visual control of activities Provide flexibility to adapt tochanging conditions
Arrangement of areas within a facility to:
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SIC L*O+S
Process layouts group similar activities together according
to process or function they perform Product layouts
arrange activities in line according tosequence of operations for a particularproduct or service
Fixed-position layouts are used for projects in which productcannot be moved
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-rocess Layout in Serices-rocess Layout in Serices
Womenslingerie
Womensdresses
Womenssportswear
Shoes
Cosmeticsand jewelry
Entry anddisplay area
Housewares
Childrensdepartment
Mensdepartment
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#anu"acturing -rocess Layout#anu"acturing -rocess Layout
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-rouct Layout -rouct Layout
InIn
OutOut
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Description
Type of process
Product
Demand Volume Equipment
Description
Type of process
Product
Demand Volume Equipment
Sequential
arrangement ofactivities
Continuous, mass
production, mainlyassembly
Standardized, madeto stock
Stable High Special purpose
Process
Co!parison o" -rouctCo!parison o" -rouct
an -rocess Layoutsan -rocess Layouts
Functional
grouping ofactivities
Intermittent, job
shop, batchproduction, mainly
fabrication Varied, made toorder
Fluctuating Low General purpose
Product
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Workers Inventory
Storage space Material handling Aisles SchedulingLayout decision
Goal
Advantage
Workers Inventory
Storage space Material handling Aisles Scheduling
Layout decision Goal
Advantage
Limited skills Low in-process, high
finished goods Small Fixed path (conveyor) Narrow Part of balancing
Line balancing Equalize work at each
station Efficiency
Process
Co!parison o" -rouctCo!parison o" -rouct
an -rocess Layoutsan -rocess Layouts Varied skills High in-process, low
finished goods Large Variable path (forklift) Wide Dynamic
Machine location Minimize material
handling cost Flexibility
Product
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'i/e-osition Layouts'i/e-osition Layouts
Typical of projects inTypical of projects inwhich product producedwhich product producedis too fragile, bulky, oris too fragile, bulky, or
heavy to moveheavy to move Equipment, workers,Equipment, workers,materials, othermaterials, otherresources brought to theresources brought to the
sitesite Low equipment utilizationLow equipment utilization
Highly skilled laborHighly skilled labor
Typically low fixed costTypically low fixed cost
Often high variable costsOften high variable costs
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1esigning -rocess Layouts1esigning -rocess Layouts
Goal: minimize material handling costsGoal: minimize material handling costs
Block DiagrammingBlock Diagramming minimize nonadjacent loadsminimize nonadjacent loads use when quantitative data is availableuse when quantitative data is available
Relationship DiagrammingRelationship Diagramming
based on location preference between areasbased on location preference between areas use when quantitative data is not availableuse when quantitative data is not available
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loc 1iagra!!ingloc 1iagra!!ing
Unit loadUnit load quantity in whichquantity in which
material is normallymaterial is normallymovedmoved
Nonadjacent loadNonadjacent load
distance fartherdistance farther
than the next blockthan the next block
STEPSSTEPS create load summary chartcreate load summary chart
calculate composite (twocalculate composite (two
way) movementsway) movements develop trial layoutsdevelop trial layouts
minimizing number ofminimizing number of
nonadjacent loadsnonadjacent loads
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Copyright 2009 John Wiley & Sons, Inc. 7-!
loc 1iagra!!ing3 /a!pleloc 1iagra!!ing3 /a!ple
DepartmentDepartment 11 22 33 44 55
Load Summary ChartLoad Summary Chart
FOM!"OFOM!"O #E$%"ME&"#E$%"ME&"
'' (( '))')) *)*)
++ (( +))+)) *)*)
,, -)-) (( .).) *)*)
.. '))')) (( -)-)** *)*) ((
' + ,
. *
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Copyright 2009 John Wiley & Sons, Inc. 7-!9
loc 1iagra!!ing3loc 1iagra!!ing3
/a!ple (cont.)/a!ple (cont.)2 3 200 loads2 4 150 loads
1 3 110 loads1 2 100 loads4 5 60 loads3 5 50 loads2 5 50 loads3 4 40 loads1 4 0 loads1 5 0 loads
' + ,
. *
')) +))
'*)*)
*)
-)
.)
'')
/rid '
Nonadjacent Loads:110+40=150
' +
,
.
*
'))
+))
'*)
*)
*) -).)
'')
/rid +
Nonadjacent Loads:0
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Copyright 2009 John Wiley & Sons, Inc. 7-20
loc 1iagra!!ing3loc 1iagra!!ing3
/a!ple (cont.)/a!ple (cont.)
'
+
,
.
*,
+
*
' .
0a1 Initial 2loc3 diagram0a1 Initial 2loc3 diagram 021 Final 2loc3 diagram021 Final 2loc3 diagram
Block Diagram type of schematic layout diagram; includes space requirements
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Copyright 2009 John Wiley & Sons, Inc. 7-2!
4elationship 1iagra!!ing4elationship 1iagra!!ing
Schematic diagram thatSchematic diagram that
uses weighted lines touses weighted lines todenote location preferencedenote location preference Muthers gridMuthers grid
format for displayingmanager preferences for
department locations
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Copyright 2009 John Wiley & Sons, Inc. 7-22
4elationship 1iagra!!ing3 /cel4elationship 1iagra!!ing3 /cel
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Copyright 2009 John Wiley & Sons, Inc. 7-23
4elationship4elationship
1iagra!!ing3 /a!ple1iagra!!ing3 /a!ple$roduction$roduction
O44icesO44ices
Stoc3roomStoc3room
Shipping andShipping andrecei5ingrecei5ing
Loc3er roomLoc3er room
"oolroom"oolroom
%% %%
%%
OO
OO
OOOO
OO
66
6666
66
EE77
II
A Absolutely necessaryE Especially importantI Important
O OkayU UnimportantX Undesirable
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Copyright 2009 John Wiley & Sons, Inc. 7-24
4elationship 1iagra!s3 /a!ple (cont.)4elationship 1iagra!s3 /a!ple (cont.)
0a1 elationship diagram o4 original layout0a1 elationship diagram o4 original layout
8ey98ey9 %%EE
II
OO
66
77
O44icesO44ices
Stoc3roomStoc3room
Loc3erLoc3erroomroom
"oolroom"oolroom
ShippingShippingandand
recei5ingrecei5ing
$roduction$roduction
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Copyright 2009 John Wiley & Sons, Inc. 7-25
021 elationship diagram o4 re5ised layout021 elationship diagram o4 re5ised layout
O44icesO44ices
Stoc3roomStoc3room
Loc3erLoc3erroomroom
"oolroom"oolroom
ShippingShippingandand
recei5ingrecei5ing
$roduction$roduction 8ey98ey9 %%EE
II
OO
66
77
4elationship 1iagra!s3 /a!ple (cont.)4elationship 1iagra!s3 /a!ple (cont.)
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Copyright 2009 John Wiley & Sons, Inc. 7-26
Co!puteri5e layoutCo!puteri5e layout
SolutionsSolutions CRAFT
Computerized Relative Allocation of FacilitiesTechnique
CORELAP Computerized Relationship Layout Planning
PROMODEL and EXTEND visual feedback allow user to quickly test a variety of scenarios
Three-D modeling and CAD integrated layout analysis available in VisFactory and similar software
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Copyright 2009 John Wiley & Sons, Inc. 7-27
1esigning Serice
Layouts Must be both attractive and functional Types
Free flow layoutsencourage browsing, increase impulse purchasing, are flexibleand visually appealing
Grid layoutsencourage customer familiarity, are low cost, easy to clean andsecure, and good for repeat customers
Loop and Spine layoutsboth increase customer sightlines and exposure to products,while encouraging customer to circulate through the entirestore
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Copyright 2009 John Wiley & Sons, Inc. 7-2
ypes o" Store Layoutsypes o" Store Layouts
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Copyright 2009 John Wiley & Sons, Inc. 7-29
1esigning -rouct
Layouts Objective
Balance the assembly line
Line balancing tries to equalize the amount of work at eachworkstation
Precedence requirements physical restrictions on the order in which operations
are performed Cycle time
maximum amount of time a product is allowed tospend at each workstation
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Copyright 2009 John Wiley & Sons, Inc. 7-30
Cycle i!e /a!pleCycle i!e /a!ple
Cd=
production time a5aila2le
desired units o4 output
Cd=0: hours ; -) minutes ! hour1
0'+) units1
Cd< < . minutes.:)
'+)
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Copyright 2009 John Wiley & Sons, Inc. 7-3!
'lo6 i!e s Cycle i!e'lo6 i!e s Cycle i!e
Cycle time = max time spent at any stationCycle time = max time spent at any station
Flow time = time to complete all stationsFlow time = time to complete all stations
' + ,
. minutes. minutes . minutes. minutes . minutes. minutes
Flow time < . = . = . < '+ minutesFlow time < . = . = . < '+ minutes
Cycle time < ma; 0.> .> .1 < . minutesCycle time < ma; 0.> .> .1 < . minutes
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Copyright 2009 John Wiley & Sons, Inc. 7-32
""iciency o" Line an alance 1elay
ii
ii< '< ' ttii
nCnCaaEE
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Copyright 2009 John Wiley & Sons, Inc. 7-33
Line alancing -roceureLine alancing -roceure
1.Draw and label a precedence diagram
2.Calculate desired cycle time required for line
3.Calculate theoretical minimum number of workstations4.Group elements into workstations, recognizing cycletime and precedence constraints
5.Calculate efficiency of line
6.Determine if theoretical minimum number ofworkstations or an acceptable efficiency level hasbeen reached. If not, go back to step 4.
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Copyright 2009 John Wiley & Sons, Inc. 7-34
Line alancing3 /a!pleLine alancing3 /a!pleWO8 ELEME&"WO8 ELEME&" $ECE#E&CE$ECE#E&CE "IME 0MI&1"IME 0MI&1
%% $ress out sheet o4 4ruit$ress out sheet o4 4ruit (( )?')?'
@@ Cut into stripsCut into strips %% )?+)?+
CC Outline 4un shapesOutline 4un shapes %% )?.)?.
## oll up and pac3ageoll up and pac3age @> C@> C )?,)?,
)?')?'
)?+)?+
)?.)?.
)?,)?,#
@
C
%
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Copyright 2009 John Wiley & Sons, Inc. 7-35
Line alancing3 /a!ple (cont.)Line alancing3 /a!ple (cont.)
WO8 ELEME&"WO8 ELEME&" $ECE#E&CE$ECE#E&CE "IME 0MI&1"IME 0MI&1
%% $ress out sheet o4 4ruit$ress out sheet o4 4ruit (( )?')?'
@@ Cut into stripsCut into strips %% )?+)?+
CC Outline 4un shapesOutline 4un shapes %% )?.)?.
## oll up and pac3ageoll up and pac3age @> C@> C )?,)?,
Cd
< < < )?. minute.) hours ; -) minutes ! hour
->))) units
+.))
-)))
N< < < +?* , wor3stations'?)
)?.
)?' = )?+ = )?, = )?.
)?.
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Copyright 2009 John Wiley & Sons, Inc. 7-36
Line alancing3 /a!ple (cont.)Line alancing3 /a!ple (cont.)
CCdd< )?.< )?.
NN< +?*< +?*
EM%I&I&/ EM%I&I&/WO8S"%"IO& ELEME&" "IME ELEME&"S
' % )?, @> C
@ )?' C> #
+ C )?) #, # )?' none
)?')?'
)?+)?+
)?.)?.
)?,)?,#
@
C
%
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Copyright 2009 John Wiley & Sons, Inc. 7-37
%> @ C #
Wor3
station '
Wor3
station +
Wor3
station ,
)?,
minute
)?.
minute
)?,
minute
CCdd< )?.< )?.
NN< +?*< +?*
E< < < )?:,, < :,?,A)?' = )?+ = )?, = )?.
,0)?.1
'?)
'?+
Line alancing3 /a!ple (cont.)Line alancing3 /a!ple (cont.)
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Copyright 2009 John Wiley & Sons, Inc. 7-3
Co!puteri5e LineCo!puteri5e Line
alancingalancing Use heuristics to assign tasks toUse heuristics to assign tasks to
workstationsworkstations Longest operation timeLongest operation time
Shortest operation timeShortest operation time
Most number of following tasksMost number of following tasks
Least number of following tasksLeast number of following tasks
Ranked positional weightRanked positional weight
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Copyright 2009 John Wiley & Sons, Inc. 7-39
7y$ri Layouts7y$ri Layouts
Cellular layouts group dissimilar machines into work centers (called cells)that process families of parts with similar shapes orprocessing requirements
Production flow analysis (PFA) reorders part routing matrices to identify families of partswith similar processing requirements
Flexible manufacturing system automated machining and material handling systemsautomated machining and material handling systemswhich can produce an enormous variety of items
Mixed-model assembly line processes more than one product model in one line
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Copyright 2009 John Wiley & Sons, Inc. 7-40
Cellular Layouts
1.1.Identify families of parts with similarIdentify families of parts with similar
flow pathsflow paths
2.2.Group machines into cells based onGroup machines into cells based on
part familiespart families
3.3.Arrange cells so material movementArrange cells so material movement
is minimizedis minimized4.4.Locate large shared machines atLocate large shared machines at
point of usepoint of use
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Copyright 2009 John Wiley & Sons, Inc. 7-4!
-arts 'a!ilies-arts 'a!ilies
% 4amily o4% 4amily o4
similar partssimilar parts% 4amily o4 related% 4amily o4 related
grocery itemsgrocery items
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Copyright 2009 John Wiley & Sons, Inc. 7-42
Original -rocess LayoutOriginal -rocess Layout
C% @ aw materials
%ssem2ly
'
+
,
.
*
- B
:
')
''
'+
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Copyright 2009 John Wiley & Sons, Inc. 7-43
-art 4outing #atri/-art 4outing #atri/
Machines
$arts ' + , . * - B : ') '' '+
% ; ; ; ; ;
@ ; ; ; ;C ; ; ;
# ; ; ; ; ;
E ; ; ;
F ; ; ;/ ; ; ; ;
H ; ; ;
Figure *?:Figure *?:
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Copyright 2009 John Wiley & Sons, Inc. 7-44
4eise Cellular Layout4eise Cellular Layout
,
-
%ssem2ly
'+
.
: ')
*
B
''
'+
% @ C
aw materials
Cell ' Cell + Cell ,
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Copyright 2009 John Wiley & Sons, Inc. 7-45
4eorere 4outing #atri/4eorere 4outing #atri/
Machines
$arts ' + . : ') , - * B '' '+
% ; ; ; ; ;
# ; ; ; ; ;F ; ; ;
C ; ; ;
/ ; ; ; ;
@ ; ; ; ;H ; ; ;
E ; ; ;
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Copyright 2009 John Wiley & Sons, Inc. 7-46
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Copyright 2009 John Wiley & Sons, Inc. 7-47
antages an 1isaantagesantages an 1isaantages
o" Cellular Layoutso" Cellular LayoutsAdvantagesAdvantages
Reduced materialReduced material
handling and transit timehandling and transit time Reduced setup timeReduced setup time
Reduced work-in-Reduced work-in-
process inventoryprocess inventory
Better use of humanBetter use of human
resourcesresources Easier to controlEasier to control
Easier to automateEasier to automate
DisadvantagesDisadvantages Inadequate part familiesInadequate part families
Poorly balanced cellsPoorly balanced cells Expanded training andExpanded training and
scheduling of workersscheduling of workers
Increased capitalIncreased capital
investmentinvestment
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Copyright 2009 John Wiley & Sons, Inc. 7-4
uto!ate #anu"acturing Celluto!ate #anu"acturing Cell
Source: J. . lac, 8Cellular
#anu"acturing Syste!s 4euce Setup
i!e, #ae S!all Lot
-rouction cono!ical.Industrial
Engineering (:oe!$er ;9
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Copyright 2009 John Wiley & Sons, Inc. 7-49
'le/i$le #anu"acturing'le/i$le #anu"acturing
Syste!s ('#S)Syste!s ('#S) FMS consists of numerous programmablemachine tools connected by an automatedmaterial handling system and controlled by
a common computer network FMS combines flexibility with efficiency
FMS layouts differ based on variety of parts that the system can process
size of parts processed average processing time required for partcompletion
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Copyright 2009 John Wiley & Sons, Inc. 7-50
'ulllo6n '#S
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Copyright 2009 John Wiley & Sons, Inc. 7-5!
#i/e #oel#i/e #oel
sse!$ly Linessse!$ly Lines
Produce multiple models in any orderProduce multiple models in any order
on one assembly lineon one assembly line Issues in mixed model linesIssues in mixed model lines
Line balancingLine balancing
U-shaped linesU-shaped lines Flexible workforceFlexible workforce
Model sequencingModel sequencing
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Copyright 2009 John Wiley & Sons, Inc. 7-52
alancing +Shape Linesalancing +Shape Lines
% @ C
# E
$recedence diagram9$recedence diagram9
Cycle time < '+ minCycle time < '+ min
%>@ C># E
0a1 @alanced 4or a straight line0a1 @alanced 4or a straight line
min min '+ min'+ min , min, min
E44iciency < < < ?---- < --?B AE44iciency < < < ?---- < --?B A+.+.,-,-
+.+.,0'+1,0'+1
'+ min'+ min '+ min'+ min
C>#
%>@
E
021 @alanced 4or a 6Dshaped line021 @alanced 4or a 6Dshaped line
E44iciency < < < ')) AE44iciency < < < ')) A+.+.
+.+.
+.+.
+0'+1+0'+1
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Copyright 2009 John Wiley & Sons, Inc.Copyright 2009 John Wiley & Sons, Inc.
All rights reserved. Reproduction or translationAll rights reserved. Reproduction or translation
o this !or" #eyond that per$itted in section %%o this !or" #eyond that per$itted in section %%o the %9' (nited States Copyright Act !ithouto the %9' (nited States Copyright Act !ithout
e)press per$ission o the copyright o!ner ise)press per$ission o the copyright o!ner is
unla!ul. Re*uest or urther inor$ation shouldunla!ul. Re*uest or urther inor$ation should
#e addressed to the +er$ission epart$ent,#e addressed to the +er$ission epart$ent,
John Wiley & Sons, Inc. -he purchaser $ay $a"eJohn Wiley & Sons, Inc. -he purchaser $ay $a"e
#ac"up copies or his/her o!n use only and not#ac"up copies or his/her o!n use only and not
or distri#ution or resale. -he +u#lisher assu$esor distri#ution or resale. -he +u#lisher assu$es
no responsi#ility or errors, o$issions, orno responsi#ility or errors, o$issions, or