Chapter 9: Layout Strategies

BUSI 2016

Why is layout strategic issue?

Why is layout a strategic issue?• Get a high utilization of space, equipment and people• Improved “flow” of information, materials and people• Improved employee morale, safer working conditions• Improved customer/client interaction• Flexibility (ie changeability)

Types of Layout

Office Layout• Goal is to optimize flow of information, rather than goods and

services.• Issues• Unique factors – pertaining to individual company

• (next page)• Universal factors – apply to most offices

• Proximity, privacy, permission

Office Layout – Office Relationship Chart

Retail LayoutAssumes that sales and profits vary directly with customer exposure to productsFive Ideas used in retail1. Locate the high draw items on the periphery of the store2. Prominent locations for high impulse, high margin items3. Disperse “power items” – items that dominate a shopping trip4. End aisle locations have a high exposure rate5. Put “lead-off” departments in a prominent place

Retail Layout - Servicescapes• Areas in which services take place• Important factors1. Ambient conditions (lighting, sound, music, smell)2. Spatial layout (plan customer paths, angles for shelves, etc)3. Signs, symbols, artifacts (carpet encourages slower traffic)

Warehouse and Storage Layouts• Minimize cost by addressing tradeoffs• Maximize total utilization• Incoming transport• Storage• Outgoing transport

• Minimize cost• Equipment - People• Material - Supervision• Insurance - Depreciation

Warehouse and Storage Layouts - Retrieval• Cross-docking

• Processing materials as they are received

• Random Stocking• Material put anywhere in the warehouse, as opposed to stacking it all in the same

place• Accurate records via Automatic Identification Systems needed• Find

• Open Locations• Exact items• Travel Time• High-usage / low-usage items assigned based on traffic

• Customizing – do “some” work in the warehouse

Fixed Position Layout• Product remains in one place• Ie shipyard, cars pre Henry Ford, operating table• Problems• Limited Space, different materials at different times, different processes

• Solutions• Manufacture assemblies off site• Manufacture based on similar designs

Process Oriented Layout• Deals with low-volume, high-variety production. Very flexible• Eg hospital, custom machines

Process Oriented Layout - Optimizing• Place departments with larger material flows closer to each other

Work Cells• Arrangement of machines focused on making one product or family of

products (highly standardized)• Advantages• Reduced WIP – set up to provide flow from machine to machine• Less floor space rqd – closer machines to accommodate flow• Reduced raw material and finished goods – rapid• Reduced direct labour – improved communication, better material flow• High sense of employee participation • High machine utilization

Work Cells - Layout

Work Cells – Staffing and Balancing• Determine Staffing• Takt time – how often does a product need to off the line, “beat”, “measure”

• Takt time = total work time available / units required• Workers required = total operation time required / takt time

• Focused Work Center• “factory within a factory”

Product Oriented Layout• Organized around high volume, low-variety products.• Repetition, continuous• Assumes that

• Volume is high enough Demand is stable• Product is standardized (more or less) Raw materials are uniform

• Advantages• Low variable cost per unit Low material handling costs• Reduced WIP Easier training• Rapid throughput

• Disadvantages• Any work stoppage can tie up entire organization!• Flexibility a challenge

Product Oriented Layout – Assembly line Balancing• To reduce the amount of slack time throughout the assembly process• Balancing resources

Product Oriented Layout – Determining Efficiency• Cycle time = production time per day / units required per day• Min num of workstations = (sum of all tasks)/cycle time• Efficiency = (sum of task times) / (actual number of workstations) *

(largest assigned cycle time)