chapter 05-layout strategies 01

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�� DefinitionDefinition�� ObjectivesObjectives

�� Characteristics of good layoutCharacteristics of good layout

�� Types of layoutTypes of layout



��Key decision that determineKey decision that determine

long run efficiency of long run efficiency of operations.operations.

�� Good layout establishesGood layout establishes

competitive priorities.competitive priorities.

�� Effective layout helps anEffective layout helps anorganization achieve itsorganization achieve its

strategy.strategy.

DefinitionDefinition



Objectives of layout designObjectives of layout design

� To develop an economic layout that will meetthe firm¶s competitive requirements:

higher utilization of space, equipment, people

improved flow of information, materials or people

improved employee morale and safer workingconditions

Improved customer/client interactions

Flexibility in the sense layouts can quicklyadapt to changes due to product changes



A good layout requires that:A good layout requires that:

� Materials handling equipment.

� Capacity and space requirement.

� Environment and aesthetics.

� Flow of information.

� Cost of moving operations between work areas.



Types of layoutTypes of layout

Retail

layout

Warehouse

layoutProduct

layout

Fixed

position

layout

Processoriented

layout

Office

layout



� The project remains in one place.

� The product remain stationery.

� It is used when product are huge, large, bulky or fragile.� Three main factors:

Limited space

Different material are used different stages of

construction

Volume materials needed is dynamic

Example: Building a ship, constructing a highway or

bridge, housing project and oil wells.

Fixed Position LayoutFixed Position Layout



Process LayoutProcess Layout

� Can simultaneously handles low volume but a

wide variety of product and services.

� It is the layout that are efficient for handling

customer with different needs and product with

different sequence of operation.

� It is where a part or item that is being worked on

travels form from one area to another.

� It is also referred as job shop layout.



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� Its flexibility in equipment and labor assignment.

� It is suitable for small lots or small order of

product.

� Equipment, supervision and skills are organized

around the process.

� Able to accommodate different product routes by

using general purpose machines.

DD

IISS

AA

DD

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AA

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TT

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SS

�Take more time.

�Tendency to create more WIP inventories.

�Require high labor skills.



Work Cells/ Cellular Layout/Work Cells/ Cellular Layout/

Group TechnologyGroup Technology

� Requires special arrangement of machinery and equipment.

� Identifies product that have similar characteristic to be

processed.

� People and machines are organized in groups.

� Arrange in U-shaped layout.

� Example: Tuner adjustment work cell to preset all audio

products to the frequency stations, a work cell on sewing all

button or zippers.



� Reduced WIP inventory.

� Less floor space required.

� Reduced raw material and finished goods inventories.

� Reduced direct labor cost.

� Increase employee participation.

� Increased use of equipment machinery.

� Reduced investment.

� Improved operator expertise skills.

AdvantagesAdvantages



RequirementsRequirementsIdentification of

families of

product

High level of training and flexibilityon part of employees

U-Shape

layout



Office LayoutOffice Layout

� Provide comfort, safety and easy movement of

people and information.� Guidelines:

100 square feet per person (including corridor)

Conference room: 25 square feet per person

Layout arranged base on relationship chart



Retail LayoutRetail Layout

� An approach that addresses flow, allocates space, and

responds to customers behavior.

� Based on idea that sales and profitability vary directly

with customer exposure to products-try to expose

customers to as many products as possible.

� E.g: Shopping Malls

� Main objective:

± to maximize profitability per square foot of floor space

� Issue: Slotting Fees



Hints for determining overallHints for determining overall

arrangement of many stores:arrangement of many stores:� Locate the high-draw items around the

periphery of the store.

� Use prominent locations for high-impulse andhigh-margin items:

Housewares

Beauty aidsShampoos



� Distribute µpower items¶ to both sides of an

aisle, and disperse them to increase the

viewing of other items.� Use end-aisle locations.

� Convey the mission of the store by careful

selection in the positioning of the lead-off

department.

Continue«Continue«



ServicescapesServicescapes

� The physical surroundings in which the service is

delivered and how the surroundings have a

humanistic effect on customers and employees.

Elements to be consider to provide good service

layout:

Ambient conditions

Spatial layout and functionality

Signs, symbols, and artifacts



A design that attempts A design that attemptsto minimize total cost byto minimize total cost by

addressing tradeaddressing trade--offsoffs

between space andbetween space and

material handling.material handling.

3 types3 types::

�� CrossCross--dockingdocking

�� Random StockingRandom Stocking

�� CustomizingCustomizing

Warehouse LayoutWarehouse Layout



High volume + Low variety of productHigh volume + Low variety of product

Repetitive Production + Continuous ProductionRepetitive Production + Continuous Production

Product LayoutProduct Layout



FABRICATION LINEFABRICATION LINE

� Machine to machine.Machine to machine.

�� Builds componentsBuilds components

and parts of anotherand parts of another

subassembly orsubassembly or

assemblies.assemblies.

ASSEMBLY LINEASSEMBLY LINE

� Hand to hand.Hand to hand.

�� Progressive assemblyProgressive assembly

± ± parts are assembleparts are assemble

and put together on aand put together on a

moving conveyermoving conveyer

system.system.

Types of Product LayoutTypes of Product Layout



� Reduced WIP inventory.Reduced WIP inventory.

�� Less floor space.Less floor space.

�� Reduced raw material andReduced raw material and

finished goods inventories.finished goods inventories.

�� Reduced direct labor.Reduced direct labor.

�� Increase employeeIncrease employee

participation. participation.

�� Increased use of equipmentIncreased use of equipment

and machinery.and machinery.�� Reduced investment inReduced investment in

machinery and equipment.machinery and equipment.

�� Improved operator expertiseImproved operator expertise

and skills.and skills.

High demandHigh demand

Work stoppages at any pointWork stoppages at any point

ties up the whole operationties up the whole operation

Lack of flexibilityLack of flexibility

DisadvantagesDisadvantagesAdvantagesAdvantages

chapter 05-layout strategies 01

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