6. capacity planning facilities layout

8/6/2019 6. Capacity Planning Facilities Layout

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OPERATIONSOPERATIONSMANAGEMENTMANAGEMENT

O MPCAPACITY PLANNING & FACILITIES LAYOUTS

By:By: --HAKEEMHAKEEMURURREHMANREHMAN

PCBAPCBAUCPUCP


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CAPACITY PLANNINGCAPACITY PLANNING Capacity PlanningCapacity Planning is the longis the longterm strategic decision thatterm strategic decision that

establishes a firms overall level of resources.establishes a firms overall level of resources. SStrategy Formulation With respect to Capacity Planning:trategy Formulation With respect to Capacity Planning:

Capacity strategy for longCapacity strategy for long--term demand which focus onterm demand which focus on demanddemandpatternspatterns and takesinto accountand takesinto account growth rategrowth rate andand variabilityvariability

Facilities that focus on cost of building and operatingFacilities that focus on cost of building and operating

Technological changes relate to rate and direction of technologyTechnological changes relate to rate and direction of technologychangeschanges

Behavior ofcompetitorsBehavior ofcompetitors

Availability ofcapital and other inputsAvailability ofcapital and other inputs

Key Decisions of Capacity PlanningKey Decisions of Capacity Planning

SSome of the common key decisions areome of the common key decisions are Amount ofcapacity neededAmount ofcapacity needed

Timing ofchangesTiming ofchanges

Need to maintain balanceNeed to maintain balance

Extent of flexibility of facilitiesExtent of flexibility of facilities


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CAPACITY PLANNING STRATEGYCAPACITY PLANNING STRATEGY Three basicstrategies for the timing ofcapacity expansion inThree basicstrategies for the timing ofcapacity expansion in

relation to a steady growth in demand.relation to a steady growth in demand. Capacity Lead StrategyCapacity Lead Strategy Average Capacity StrategyAverage Capacity Strategy Capacity Lag StrategyCapacity Lag Strategy

Capacity Lead StrategyCapacity Lead Strategy:: Aggressive strategyAggressive strategy Capacity is expanded in anticipation of demand growth.Capacity is expanded in anticipation of demand growth.

Average Capacity StrategyAverage Capacity Strategy:: Moderate StrategyModerate Strategy Capacity is expanded to coincide with average expected demand.Capacity is expanded to coincide with average expected demand.

Capacity Lag StrategyCapacity Lag Strategy:: Conservative StrategyConservative Strategy Capacity isincreased after an increase in demand has beenCapacity isincreased after an increase in demand has been

documented.documented.


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CAPACITY EXPANSION STRATEGIES


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CAPACITY DECISIONSCAPACITY DECISIONS

CCapacity increase depends on:apacity increase depends on:

volume and certainty of anticipated demandvolume and certainty of anticipated demand

strategic objectivesstrategic objectives

costs of expansion and operationcosts of expansion and operation

Best operating levelBest operating level

% ofcapacity utilization that minimizes unitcosts% ofcapacity utilization that minimizes unitcosts

Capacity cushionCapacity cushion

Which is an amount ofcapacity in excess of expectedWhich is an amount ofcapacity in excess of expecteddemand when there issome uncertainty aboutdemand when there issome uncertainty aboutdemand. (100%demand. (100% -- Utilization)Utilization)


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ECONOMIES OF SCALEECONOMIES OF SCALE IItcosts less per unit to produce high levels of outputtcosts less per unit to produce high levels of output

fixed costscan be spread over a larger number of unitsfixed costscan be spread over a larger number of units production or operating costs do notincrease linearly withproduction or operating costs do notincrease linearly with

output levelsoutput levels

quantity discounts are available for material purchasesquantity discounts are available for material purchases

operating efficiency increases as workers gain experienceoperating efficiency increases as workers gain experience

Best OperatingBest Operating

Level for aLevel for aHotelHotel


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DISECONOMIES OF SCALEDISECONOMIES OF SCALE

WWhen higher levels of outputcost more per unit tohen higher levels of outputcost more per unit to

produce.produce. Diseconomies ofDistributionDiseconomies ofDistribution:: (i.e., Larger stores,Distribution(i.e., Larger stores,Distribution

centre, or manufacturing facilities tend to serve expandedcentre, or manufacturing facilities tend to serve expandedgeographical areas.)geographical areas.)

Diseconomies of BureaucracyDiseconomies of Bureaucracy:: (i.e., Large facilities require more(i.e., Large facilities require morestaff)staff)

Diseconomies ofConfusionDiseconomies ofConfusion:: (i.e.,Complexity increases with(i.e.,Complexity increases withnumber of linkages between department)number of linkages between department)


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FACILITY LAYOUTFACILITY LAYOUT

Minimize material-handlingcosts

Utilize space efficiently Utilize labor efficiently Eliminate bottlenecks Facilitate communication and

interaction Reduce manufacturing cycle

time Reduce customer service time Eliminate wasted or

redundant movement Increase capacity

Facilitate entry, exit, andplacement of material, products,and people

Incorporate safety and securitymeasures

Promote product and servicequality

Encourage proper maintenanceactivities

Provide a visual control ofactivities

Provide flexibility to adapt tochanging conditions

Arrangement of areas within a facility to:


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TYPES OF LAYOUTSTYPES OF LAYOUTS

Basic LayoutsBasic Layouts

Process LayoutProcess Layout

Product LayoutProduct Layout

FixedFixedPosition LayoutPosition Layout

Hybrid LayoutsHybrid Layouts

Cellular LayoutsCellular Layouts

Flexible Manufacturing SystemsFlexible Manufacturing Systems

MixedMixedModel Assembly LinesModel Assembly Lines


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BASIC LAYOUTS

Process layouts group similar activities together according to

process or function they perform

Product layouts arrange activitiesin line according to sequence of

operations for a particular product or service

Fixed-position layouts are used for projectsin which productcannot be

moved


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PROCESS LAYOUT INPROCESS LAYOUT IN

SERVICESSERVICESWomenslingerie

Womens dresses

Womenssportswear

Shoes

Cosmetics andjewelry

Entry and displayarea

Housewares

Childrensdepartment

Mensdepartment


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MANUFACTURING PROCESSMANUFACTURING PROCESSLAYOUTLAYOUT

L

L

L

L

L

L

L

L

L

LM

M

M

M

D

D

D

D

D

D

D

D

G

G

G

G

G

G

A A AReceiving andShipping Assembly

Painting Department

Lathe DepartmentMilling

Department Drilling Department

GrindingDepartment

P

P


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A PRODUCT LAYOUTA PRODUCT LAYOUT

InIn

OutOut


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FIXEDFIXED--POSITION LAYOUTSPOSITION LAYOUTS

Typical of projectsTypical of projects

Equipment, workers,Equipment, workers,materials, othermaterials, other

resources brought to theresources brought to thesitesite

Highly skilled laborHighly skilled labor

Often low fixed CostOften low fixed Cost

Typically high variableTypically high variablecostscosts


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DESIGNING PROCESSDESIGNING PROCESS

LAYOUTSLAYOUTS GoalGoal:: minimize material handling costsminimize 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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BLOCK DIAGRAMMINGBLOCK DIAGRAMMING

Unit loadUnit load

quantity in whichquantity in whichmaterial is normallymaterial is normallymovedmoved

Nonadjacent loadNonadjacent load

distance farther thandistance farther thanthe next blockthe next block

STEPSSTEPS

create load summary chartcreate load summary chart

calculate composite (two way)calculate composite (two way)

movementsmovements develop trial layoutsdevelop trial layouts

minimizing number ofminimizing number ofnonadjacent loadsnonadjacent loads


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BLOCK DIAGRAMMING:BLOCK DIAGRAMMING:

EXAMPLEEXAMPLE

DepartmentDepartment 11 22 33 44 55

Load Summary ChartLoad Summary Chart

FROM/TOFROM/TO DEPARTMENTDEPARTMENT

11 100100 5050

22 200200 5050

33 6060 4040 5050

44 100100 606055 5050

1 2 3

4 5


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EXAMPLE (CONT.)EXAMPLE (CONT.)

2 3 200 loads

2 4 150 loads

1 3 110 loads1 2 100 loads

4 5 60 loads

3 5 50 loads

2

5 50

loads3 4 40 loads

1 4 0 loads

1 5 0 loads

1 2 3

4 5

100 200

15050

50

60

40

110

Grid 1

Nonadjacent Loads:

110+40=150

1 2

3

4

5

100

200

150

50

50

60

40

110

Grid 2

Nonadjacent Loads:

0


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EXAMPLE (CONT.)EXAMPLE (CONT.)

12

3

4

53

2

5

1 4

(a) Initial block diagram(a) Initial block diagram (b) Final block diagram(b) Final block diagram


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RELATIONSHIPRELATIONSHIP

DIAGRAMMINGDIAGRAMMING

Schematic diagram thatSchematic diagram that

uses weighted lines touses weighted lines todenote locationdenote locationpreferencepreference

Muthers gridMuthers grid

format for displayingmanager preferences fordepartment locations


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RELATIONSHIPRELATIONSHIP

DIAGRAMMING: EXAMPLEDIAGRAMMING: EXAMPLE

ProductionProduction

OfficesOffices

StockroomStockroom

Shipping andShipping andreceivingreceiving

Locker roomLocker room

ToolroomToolroom

AA AA

AAOO

OO

OOOO

OO

UU

UU

UU

UU

EEXX

II

A Absolutely necessary

E Especially importantI Important

O Okay

U Unimportant

X Undesirable


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DESIGNING PRODUCT

LAYOUTS Objective

Balance the assembly line

Line balancing tries to equalize the amount of work at each

workstation

Precedence requirements physical restrictions on the order in which operations

are performed

Cycle time maximum amount of time a productis allowed to

spend at each workstation


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CYCLECYCLE

TIMETIMEEXAMPLEEXAMPLE

Cd=

production time available

desired units of output

Cd = (8 hours x 60 minutes / hour)(120 units)

Cd

= = 4 minutes480

120

1 2 3

4 minutes4 minutes 4 minutes4 minutes 4 minutes4 minutes

Flow time = 4 + 4 + 4 = 12 minutesFlow time = 4 + 4 + 4 = 12 minutes

Cycle time = max (4, 4, 4) = 4 minutesCycle time = max (4, 4, 4) = 4 minutes

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

FLOW TIMEFLOW TIMEVSVS

CYCLE TIMECYCLE TIME


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EFFICIENCY OF LINE

ii

ii= 1= 1ttii

nCnCaaEE==

ii

ii= 1= 1ttii

CCddNN==

EfficiencyEfficiencyMinimum numberMinimum number

of workstationsof workstations

wherewhere

ttii = completion time for element= completion time for element ii

jj = number of work elements= number of work elements

nn = actual number of workstations= actual number of workstations

CCaa

= actual cycle time= actual cycle time

CCdd

= desired cycle time= desired cycle time


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LINE BALANCING: EXAMPLELINE BALANCING: EXAMPLEWORK ELEMENTWORK ELEMENT PRECEDENCEPRECEDENCE TIME (MIN)TIME (MIN)

AA Press out sheet of fruitPress out sheet of fruit 0.10.1

BB Cut into stripsCut into strips AA 0.20.2

CC Outline fun shapesOutline fun shapes AA 0.40.4DD Roll up and packageRoll up and package B, CB, C 0.30.3

0.10.1

0.20.2

0.40.4

0.30.3D

B

C

A


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LINE BALANCING: EXAMPLELINE BALANCING: EXAMPLE

(CONT.)(CONT.)WORK ELEMENTWORK ELEMENT PRECEDENCEPRECEDENCE TIME (MIN)TIME (MIN)AA Press out sheet of fruitPress out sheet of fruit 0.10.1

BB Cut into stripsCut into strips AA 0.20.2

CC Outline fun shapesOutline fun shapes AA 0.40.4DD Roll up and packageRoll up and package B, CB, C 0.30.3

Cd = = = 0.4 minute

40 hours x 60 minutes / hour

6,000 units

2400

6000

N= = = 2.5 3 workstations1.0

0.4

0.1 + 0.2 + 0.3 + 0.4

0.4


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(CONT.)(CONT.)

CCdd

= 0.4= 0.4

NN= 2.5= 2.5

REMAINING REMAININGWORKSTATION ELEMENT TIME ELEMENTS

1 A 0.3 B, C

B 0.1 C, D

2 C 0.0 D3 D 0.1 none

0.10.1

0.20.2

0.40.4

0.30.3D

B

C

A


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A, B C D

Work

station 1

Work

station 2

Work

station 3

0.3

minute

0.4

minute

0.3

minute

CCdd

= 0.4= 0.4

NN= 2.5= 2.5

E= = = 0.833 = 83.3%0.1 + 0.2 + 0.3 + 0.4

3(0.4)

1.0

1.2


(CONT.)(CONT.)


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HYBRIDS LAYOUTSHYBRIDS LAYOUTS CELLULAR LAYOUTS

group dissimilar machinesinto work centers(called cells) that process families of partswith similar shapes or processing

requirements FLEXIBLE MANUFACTURING SYSTEM

automated machining and material handlingautomated machining and material handlingsystemssystems which can produce an enormous

variety ofitems MIXED-MODEL ASSEMBLY LINE

processes more than one product model inone line


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ORIGINALORIGINALPROCESSPROCESS

LAYOUTLAYOUT

CA B Raw materials

Assembly

1

2

3

4

5

6 7

8

9

10

11

12

Machines

Parts 1 2 3 4 5 6 7 8 9 10 11 12

A x x x x x

B x x x x

C x x x

D x x x x x

E x x x

F x x x

G x x x x

H x x x

PARTPARTROUTINGROUTING

MATRIXMATRIX


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REVISEDREVISEDCELLULARCELLULAR

LAYOUTLAYOUT

Machines

Parts 1 2 4 8 10 3 6 9 5 7 11 12

A x x x x x

D x x x x x

F x x x

C x x x

G x x x x

B x x x x

H x x x

E x x x

3

6

9

Assembly

12

4

8 10

5

7

11

12

A B CRaw materials

Cell 1 Cell 2 Cell 3

REORDEREDREORDEREDROUTINGROUTING

MATRIXMATRIX


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FLEXIBLE MANUFACTURINGFLEXIBLE MANUFACTURINGSYSTEMS (FMS)SYSTEMS (FMS)

FMSconsists of numerous programmablemachine toolsconnected by an automatedmaterial handling system and controlled by a

common computer network FMScombines 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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Mixed ModelMixed Model

Assembly LinesAssembly Lines Produce multiple modelsin any orderProduce multiple modelsin any order

on one assembly lineon one assembly line

Issuesin mixed model linesIssuesin mixed model lines Line balancingLine balancing

UU--shaped lineshaped line

Flexible workforceFlexible workforce Model sequencingModel sequencing


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BALANCING UBALANCING U--SHAPED LINESSHAPED LINES

A B C

D E

Precedence diagram:Precedence diagram:

Cycle time = 12 minCycle time = 12 min

A,B C,D E

(a) Balanced for a straight line(a) Balanced for a straight line

9 min9 min 12 min12 min 3 min3 min

Efficiency = = = .6666 = 66.7 %Efficiency = = = .6666 = 66.7 %24243636

24243(12)3(12)

12 min12 min 12 min12 min

C,D

A,B

E

(b) Balanced for a U(b) Balanced for a U--shaped lineshaped line

Efficiency = = = 100 %Efficiency = = = 100 %2424

2424

2424

2(12)2(12)


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QUESTIONSQUESTIONS

6. capacity planning facilities layout

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