facilities layout planning - lean manufacturing.pdf

Chapter 1

Facilities in aChanging Environment

"The dogmas of our quiet past are inadequate to thestormypresent. As our situation is new, we must thinkanew.tt

- Abraham Lincoln

Working facilities are the land, buildings, and equipment that providethe physical capability to add value. This book is about operationalfacilities used for a wide range of business, government, institutional,and charitable activities. It applies to offices, factories, and fast-foodrestaurants. It applies to any facilitythat houses value-adding operations.For convenience, terms such as "business facility" or"factory" are used,although the changing nature of work has blured many of thesedistinctions. The principles herein apply to a wide range of situationsthe industrial engineer commonly encounters.

Facilities are both durable and expensive, lasting for decades andsometimes even spanning centuries. A firm's facilities are among themost expensive of its possessions. They represent the largest asset itemon most balance sheets.

The durability of facilities, their cost, and their primary role inadding value make them an important strategic element. Just asgunpowder made the fortresses of medieval Europe indefensible,changes in technology, culture, and politics can quickly render today'sindustrial facilities obsolete. Conversely, facilities that adapt to thenature of their competitive environment can be a continuing source ofadvantage for their owners.

Facilities Planning

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Facilities In A Changing Environment

Figure 1.1 depicts the interaction of facilities, organization,products, and processes. The understanding, design, and developmentof these varied elements into a functioning business system are referredto in various terms. Among these are: manufacfuring strategy, co{poratereengineering, and business architecture.

The importance of facilities does not lie solely in their cost anddurability. They are also the most tangible element of the businesssystem, the element to which everyone in every area of the business canrelate. They can be a central, common reference for the restrucfuring/reengineering/strategic debate.

Working facilities in modern historyIndustrial facilitiesshops that served the needs of individual artisans were the industrialfacilities of the Middle Ages. These were small and centered around asingle skill such as armory or saddlemaking. They had simple and cleararrangements.

Duringthe Industrial Revolution, power sources and the movementof raw materials determined faciliry design. Textile mills requiredstreams for water power, and cumbersome shafts and belts dominatedtheir arrangement. Eady iron and steel mills were located on waterways,railroads, or mining sitesl coal, iron ore, and limestone transportationdominated their design.

Early large-scale production shops such as the pickering pianoFactory @g, 1.2) developed in the nineteenth century. These large

Figure 1.2 - The Pickering Piono Factory, Boston, Moss, Circo | 870

Facilities Planning

buildings turned out high numbers of manufacrured products. At onetime, the Pickering factory turned out 400 pianos each day.

In the earlytwentieth century, the progression ofmass-productiontechnology required facilities that optimized material flow. Themicro-division of labor made skill less important than efficientmovement of product.

In the second half of this century, information and knowledgebegan to dominate industrial production. The education and skills ofthe worKorce in industrializedparts ofthe world increased. As a result,industrial facilities must now optimize the coordination of people,processes, and products.

Government facilitiesIn the Middle Ages, the most important government facilities weretown fortresses. Their primary mission was defense against rovingbands and neighboring ciry-states. The fortified town of Rocroi, on thenorthern plain of France, is an example. Still largelyintact, it is a lastingtestimony to the durability, cost, and obsolescence of these fortresses.

With the advent ofgunpowder, battle technolory advanced. Newtactics evolved and armies became more disciplined. These massiveworks drained the treasuries of many dukes and kings and becameindefensible and obsolete. By the time of the Renaissance, fortresseshad evolved into palaces. Their primary mission was comfort for theinhabitants, as well as the projection of power and prestige. Thebuilders ofmany governmental buildings wanted to intimidate potentialenemies, both foreign and domestic.

Governments no longer can survive only through warfare or thethreat of warfare. Their constituents demand added value in a widerange of human activity. Accordingly, many governmental facilitiesnow are being designed for efficient operations rather than projectionof power.

The United States Postal Service provides an excellent example.Post offices built in the early part of this century were architecturallandmarks. Their mission was to display the power, stability, andprestige of the federal government. Postal facilities built today are neartransportation centers and optimize mail flow. Their primary missionis the efficient distribution of mail.

Kn owl e d g e - based fa ci I iti esFacilities in which knowledge is the primary means of work havealways been more varied than other types. The medieval monastery,for example) was a primary depository of knowledge in its time.


The church used this knowledge to vie with governments forpower and influence.

During the Renaissance and Industrial Revolution, knowledgebecame an important source for commercial competitive advantage.Individual professionals such as doctors, lawyers, and financiers wereprimary keepers of knowledge. Other knowledge resided in libraries.Factories imbedded it in their facilities and processes. Peter F. Druckerwas among the first to rccognize the increasing value ofwhat he termed"knowledge work." He put forth these ideas in his landmarkwork, ThePractice of Management, in 1955. Knowledge work depends primarilyon brainpower rather than manual skills or strength. In today'smanufacturing environment, most work requiring pure strength ofmuscle has long been automated away. Much of the work that oncerequired manual dexterity has been taken over by computerizedequipment such as numerically controlled machine tools or coordinatemeasuring machines. Therefore, knowledge and the information behindit now have become primary sources ofvalue in their own right. Manyorganizations exist for the sole purpose of processing information anddistributing it. Their facilities should reflect and enhance this role.

Facilities in a changing environmentFacilitydesigners have always workedwith materials, products, processes,information, andpeople. Theirtaskis to arrange workprocesses on landand in buildings for optimum performance. This has not changed andwill not change, but rapid shifts in technology, politics, and culturerequire a more fundamental understanding and analysis from thefacility designer. It no longer is sufficient (if it ever was) to copy anassembly line just because it was successful somewhere else.

In addition to the long-term trend toward increased knowledge-based work, other trends ofa stretigic nature are affecting business. Thefacility planner should catalyze or lead an organization's adaptation toever-changing surroundings.

The environmental imperativeHarmony with the environment is an increasingly important businessconcern that will not go away. Population growth is a principal factordictating this concern; the spread of the suburbs through increasedmobility is another. Organizafions that survive and prosper in comingyears will anticipate and lead with their environmental policies.

Location requirement changesInformation is the raw material of the knowledge worker. With the

6 Facilities Planning

confluence of information processing and communication, theinformation superhighway has opened. The ability to distribute vastamounts of information makes it less important for facilities to locatenear the source of information. This is similar to the distribution ofmaterials in an earlier day. As material transportation became moreefficient. manufacturers could locate farther from their sources.

Knowledge-based facilities now locate where their workers wishto live-often far from traditional industry. Industries that requirespecialized knowledge often converge in small areas: manufacturers ofoverhead cranes congregate in Milwaukee, Wisconsin; Wichita, Kansas,has a high concentration ofvinyl printers for decorative decals; and"Silicon Valley" in California is the home for many electronics plants.These changes affect global facilities planning decisions such as siteselection and planning.

The changing nature of workAs products become more sophisticated, their knowledge componentbecomes more important. It is no longer enough to manufacture acommodity product. Competition demands variety, frequent change, anddistribution systems that deliver physical product, service, and knowledge.

The nature ofworkhas changed. Today, individuals seldomworkalone. Knowledge teams are necessary in product design, processdesign, finance, and even law. Teams, by their nature, require proximiry.Facilities can inhibit or promote teamwork. They can smooth theoperation of complex and ethereal knowledge processes or they canisolate people and prevent communication.

The socio-technical systemSocio-technical systems have always existed, although few managersrecognized the phenomenon until recently. Management thought wascaught in the Newtonian concept that organizations were like machines,giant clockrvork mechanisms that ticked away in a predictable,mechanical manner. Eric Trist ofthe Tavistock Institute developed thesocio-technical idea in the early 1950s. Teamwork, total qualitymanagement (TQ{), and other techniques for employee involvementhave their roots in the concept ofthe socio-technical system (fiS. 1.3).

The social system includes people and their habitual attitudes,values, behavioral styles, and relationships. It is the formal powerstrucfure depicted on otganization charts and the informal structurederived from knowledge and personal influence. The technical systemincludes machinery, processes, procedures, and their physicalarrangement (layout).


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Facilities Planning

To be effective, the social and technical systems must integrate

and assist one another. Facilities planning plays a major role in this

integration. Businesses where people have isolated workstations, large

inventory buffers, and few sequential processes have difficultyimplementing teamwork. A manufacturing work cell that requiresextensive teamwork will not produce in an environment of suspicion,individual rewards, and command-control.

N o n -h i e ra rchi ca I org a niz atio n sHierarchical organizations with functional divisions of work evolvedfrom the Roman Legions, the Catholic Church, and medieval guilds.Such organizations are ill-suited for today's work, where the workproduct requires input from many functional specialties and wherecoordination between specialties is a primary requirement'

While TqM emphasizes cross-functional teamwork, morefundamental reengineering emphasizes elimination of functionalstructures in the organization This puts special demands on thefacilities planner. Non-hierarchical organizations must constantly changeto accommodate changes in business volume and product life cycles.

In these organizations there is less division between traditionalmanagement and labor functions. Many engineers and others who

traditionally worked in office areas now have their desks in themanufacturing plant. Many of today's high-tech manufacturingoperations demand more cleanliness and order than the traditionaloffice. Therefore, facilities must be more open with few walls andbarriers. Theyrequire constant rearrangement to accommodate changingwork cells and changing team structures.

Global business restructurtng reengineering, and facilitiesThanks in part to the changing nature ofwork, global economics, andtechnological advances, large-scale restructuring is occurring in many

organizatrons. As a result, many facilities that are no longer contributingto company missions will close. Other facilities will be built. Many

more will have products realigned and processes reengineered.Facilities planning is often a large-scale reengineering project. It

is an opportunity to rethink processes as well as suPPorting elements.During a facilities planningproject, the designers can help managementclarifr missions and rationalize product lines.

Layout is an integral part of reengineering and restructuring.Meaningful restructuring requires corresponding changes in the layout.

Conversely, a layout redesign can be the catalyst for restructuring.Many symptoms ofinappropriate business architecture appear as layout


or material handling issues. Factory layout can demonstrate the need forreengineering to an organization reluctant to tear itselfapart and rebuild.

Approaches to facility planningThose who plan and build facilities take many approaches. Some arehighly organized; others are ad hoc. Examples ofapproaches (fig.7.4) areexperiential, master building, cloning, bottom-up, systematic, and strategic.

ExperientialIn this approach, people plan their facilities based on past experience,common sense, and instinct. In any organization, the experience ofsenior members is valuable for information on what has worked andwhat has not worked in the past. Otganizations, as well as individuals,need this experience to function.

A faciliry designed from experience taps into the rich knowledgeof those who have gone beforel however, experience-based facilitiesplanning has limitations. Experience, bydefinition, is based on the past,and new technology and organization structures can make it obsolete.In addition, planning by experience is usuallyunorganized. It frequentlyis the result of the memories ofonlyone or a fewindividuals, and othersmay have had additional or contradictory experiences. Such hindrances,as well as forgotten details, haunt these efforts.

In planning a major facility, experience cannot be ignored butmust be gathered from the widest field of experience possible andapplied with judgment and discretion.

Master buildingMaster building focuses on consrruction and buildings. The finalproduct is often impressive and sometimes a work of art, but it may notfit the operational needs ofthe enterprise. Master builders can be foundat many levels in both large and small organizations: a companypresident building a new headquarters or a department managerfocusing on technological impressiveness rather than actual needs.Using a building to displayfinancial strength, technological prowess, orartistic accomplishment is a legitimate form of advertising. However,this purpose should be balanced with other business needs.

CloningCloning simply duplicates an existing facllity or portion of it. Thisapproach is fast. Ifthe existingfaciliryis proven and ifconditions are thesame, this type works well. McDonald's uses cloning to build itshamburger "factories" throughout the world. For most facilities, however,

I O Facilities Planning

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cloning has limited use because sites, processes, and people are different.Cloning should be applied only when appropriate.

Bottom upThe bottom-up approach starts with the details. How many desks?How many and which machines? How many people? From them,


departmental units and, eventually, the overall facility plan are built. Itis a satisfactory approach if the derails and how theywill be assembledinto a larger system are known, ifthere is time, and ifthe details will notchange. such conditions are often met for smaller facilities in stableenvironments.

Bottom-up planning does not lend itself to new operationsstrategies. Because all details have to be worked out before final designand construction, construction lead times are often too long. On largeprojects, the details become so overwhelming it is often difficult tomaintain schedules.

SystematicSystematic layout planning (SLP) uses procedures, conventions, andphases. It helps layout planners know what to do at each step of aproject. This provides layout planning with system and strucrure,saving time and effort. However, many layouts created with systematicmethodology are simply better versions of what went before. Theprimary concern is how to arrange blocks of space. A more fundamentalissue is what blocks of space should be arranged.

StrategicThe strategic approach is top-down. It sets policy first and aranges thetechnology, organization, and facilities to support it. Starting withbusiness and corporate strateg'y such as global site location, it moves tooperations strate gy and finishes with details like locarions of e quipmentand furniture.

A strategic approach is direct and has purpose. It allows everyoneinvolved in the project to follow a common direction. Used alone,however, strategic direction is insufficient. It does not tell facilirydesigners and those who use the facilities what to do.

FacPIanThe FacPlan method combines the best of various approaches. It hassystem and structure and adds strategic dimension. It taps into theexperience and knowledge of those who use the facilities. It can workfrom detail to general and vice versa when appropriate.

FacPlan uses a hierarchy of detail levels. It focuses on strategicissues at the appropriate time and minutiae at the appropriate time,using a model project plan to guide and srrucrure each project. Proceduralflow charts guide rhe planner through each task and assistwith decisionmaking. Charts, forms, and design aids contribute to the organizationof information.

1 1

1 2 Faci l i t ies Planning

The industrial enginee/s role in facility planningThe central, strategic role offacilities places their designers in a uniqueposition. Industrial engineers can assume narrow roles as technicalequipment arrangers or they can take broader roles as educators andcatalysts f or or gan\zational strate gic deb ate.

The latter requires more than skills in layout design and technicalprocedure. Strategic perspective, well-developed interpersonal skills,patience, and understanding are also necessary.

This work provides insight into the basic technical tools industrialengineers need for facilities planning. The broader skills will reguireexperie nce, insight, maturity, and education.

Chapter 2

The Framework forFacilities Design

The complete design of a facility requires work from many disciplineswithin an organization: sales and marketing, purchasing, humanresource s, accounting, and more. More visible is the work of architects,structural engineers, process engineers, and management. Architectsand structural engineers check soil conditions, building codes, andinfrastructure, detailing the structure, appearance, and internals of thebuilding and site. Process engineers mayplan the production procedures.To guide and coordinate all these efforts, management sets strategicpolicies.

Industrial engineers also play key roles. They often manage rheoverall project and report to top management, and they may performsome or all of the above tasks. Most importantly, they plan the use ofspace. These space plans, atvarious detail levels, become the centerpiecefor coordinating the entire project.

The levels of spatial designLayout, or space planning, is the central focus of facilities design anddominates the thoughts of most managers. But factory or office layoutis only one detail level. Ideally, a facility design proceeds from thegeneral to the particular-from global site location to workstation.Larger strategic issues are decided first.

It is useful to think of space planning in five levels as shown infigure 2.1. Figures 2.2 through 2.6 show qpical ourputs at each level.These range from the global maps of site location to engineeringdrawings of tools and workstations.

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The Framework For Facilities Design 1 5

Level I -Global site locationDuring global location, the site location level, the firm decides whereto locate facilities and determines their missions. A facility missionstatement is a concise summary of products, processes, and keymanufacfuring tasks. A facility rarely can perform more than two orthree key manufacturing tasks well. The mission statement is thereforean important guide for facilities planners and others as they considervarious design trade-offs.

Other outputs at this level usually include a report to management.For multiple sites, maps showing site locations and customeiactivityare common. Figure 2.2 illustrates.

The cost of space planning at Level 1 is small. Global locationusually involves a few top executives and one or fwo industrial engineersor consultants. Each level below requires more and more people,analysis, and detailed engineering. Yet, the corporate budget pro..r,frequently demands that all significant planning be delayed urriil uft.,a decision is made to proceed with site acquisition. Those levels with the

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most strategic impact and the lowest planning cost receive the least

attention. Consequently, the decisions with the most strategic impactare sometimes made with the least reliable knowledge.

Overall business strategy is most important at the global level.Determining the number and location of sites requires far more thansimply searching for the lowest labor rates and largest tax breaks.Available labor skiils and attitudes toward work, supporting servicessuch as tool production and material supply, and politics, and sometimesgeopolitics, must also be major considerations. For example, if a plantis located in the wrong countr/r it may become a geopolitical pawn.Technological prowess could then shift to other regions. If there ispolitical instability locally, it can destroy a firm's ability to produce.Important raw materials might be depleted or replaced. Such problemsare not easy to correct.

Appropriate planning results in facilities optimized for the marketsand located near the most important resources-resources that,increasingly, involve knowledge, skills, and infrastructure rather than

raw materials.

Level 2-Supra-space planAt the supra-space plan level, site planning takes place. This includesnumber, size, and location ofbuildings, as well as infrastructure such asroads, water, gas, and rail. This plan should look ahead to plantexpansions and eventual site saturation.

The documents from a site planning project almost alwaysinclude a site drawing (fig. 2.3). Frequently, they involve a series ofdrawings showing past, present, and future configurations (there may

be several options for these). A major site study also might includenarratives on site history and descriptions of the considerations andrationale for the site plans.

At this level, planning still has long-term and far-reachingconsequences. Awell-designed infrastructure supports future expansionor conversion to new products. Proper location and building design

provide for logical expansion in suitable increments.

Level 3-Macro-space planAt the macro-space plan level, a macro-layout (fig. 2.4) plans eachbuilding, structure, or other sub-unit of the site. Usually this is the mostimportant level of planning, for it sets the focus, or basic organization,of the factory. The designers define and locate operating departmentsand determine overall material flow.

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lower costs, high quality, or a flexible labor. Fundamental macro-spaceplan decisions usually are easier to correct than site-level decisions. Still,a poorly planned facility can bring high handling costs, confusion, andinflexibility. These problems, in rurn, can cause difficulty in launchingnew products, erratic deliveries, and too much inventory. Correctingsuch problems may require a complete rearrangement with majorinvestments in process equipment and infrastructure.

Level 4-Micro-space planThe location of specific equipment and furniture is determined in themicro-space plan. The emphasis shifts from gross material flow topersonal space and communication. Socio-technical considerationsdominate. Ifproduction teams are an important element ofthe operationsstratery, the work at this level may inhibit or discourage teamwork.Figure 2.5 shows a space plan for an operating department.


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Level 5-Sub-micro-space planIndividual workstations and workers are the concern of the fifth level.Here, workstations are designed for efficiency, effectiveness, and safety.Ideally, the industrial engineer plans for the correct tools in the mostappropriate places, using fixtures that properly hold the work piece.Materials are introduced at optimal locations and large items areprovidedwith appropriate material handling aids. Some typical outputsare shown in figure 2.6.


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The Framework For Facilities Design 2' l

Levels 4 and 5 are the more detailed levels of space planning;therefore, equipment and issues are more localized.When.h"rrg., "r"necessary, there is usuallyless danger ofmajor production interruptions.

The phasing of space designIdeally, design progresses from the global level to the sub-micro levelin distinct, sequential phases. At the end of each phase, the design is"frozen" by consensus. This seftles the more global issues firsiandallows smooth progress without continuallyrevisiting unresolved issues.It also prevents details from overwhelming the prolect. Figure 2.7(A)illustrates this logical progression and shows the strategic impact ofthework in each phase. Strategic impact affects the long-term ab1fity of thefirm to compete and profit.

. Industrial engineers rarelyhave the opportunityto design afacility

in accordance with the normal phasing shown in figure 2.7(A).Thereare several reasons for this. Sites and buildings that have evolved overmanyyears outlive technologies and their original purpose, and thereforemust be rearranged. Another reason may be management's belief thatthe existing space plan is simply not optimal. In both cases, planning

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begins at the macro-space plan level. Figure 2.7(B) illustrates this. The

phasing demonstrated in figure 2.7(B) also occurs when managementmakes global and site-level decisions without the benefit of advice and

counsel from their facilities planner(s).The size and organization structure of cells in a macro-space plan

may be indeterminable when processes and strategies are untried. This

often happens when firms make a transition from functional to cellular

manufacruring. Pilot cells must then be developed to prove the concept

or technology. Figure 2.7(C) reflects this. A cell or micro-space plan(Level4) then becomes the first phase. Upon completion of this pilot,

people can agree on the general approach. Then the designer can shiftback to Level 3 and prepare a macro-space plan. The details ofremaining cells are defined in their optimal sequence.

The phasing demonstrated in figure 2.7(D) is common for large

office layout projects. First, the details of workstation layout are

established. This may come from standardizing space and equipment

based on each person's position in a hierarchy. Secretaries, for example,

may get a 175-square-foot workstation with filing space and word

processing equipment, while a Grade I engineer gets a 11O-square-foot

cubicle and a supervisor, a 15O-square-foot cubicle. From the

organizationcharts and staffing forecasts, the space for e ach department

and the arrangement between departments can then be developed. At

this point, the project moves upward in detail to the global or' more

commonly, macro- level.Separating the work into phases and levels is the ideal approach.

Nevertheless, there may be some overlap. For example, the space plan

of a particular work cell may not fit the boundaries previously decided

in the macro phase. This may then require minor changes to the

previously designed and agreed upon macro-space plan. For these and

other reasons, phasing should be flexible.Proper phasing should be considered in the earliest stages of the

project, perhaps after the initial discussions and certainly before any

significant work effort begins. Here are some guidelines:' work from the most general to the most specific level (highest

to lowest) unless special conditions dictate otherwise;' clearly communicate the phasing plan to all participants;' resist the temptation to jump ahead before a particular phase

is complete;' obtain agreement on the plan for each phase before moving on

to the next phase; and' rccognize that there may be some overlap between phases.

The Framework For Facilities Design 23

The space plan elementsEvery space plan at each level has four fundamentar elements and twoderived elements. The fundamental elements are: space planning unitsqPys): ffiniyies, spa-ce, and constraints. When developing a spaci plan,the des i gners fi rst defi ne and identi$' S PUs. They th.r, .rrJrr"t. "ffi nities.using the affi nities, they join SPUs to form one or mo rc afi n i ty di agra ms.The affiniry, or configuration, diagram is the first ofthe derivei eleirerrts.Space added to the configuration diagram produces a space plan primitire,the second derived element. constraints applied io tit. space planprimitive produce the space plan. Figure 2.8 shows this progression.

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2 4 Faci l i t ies Planning

The concept of fundamental and derived elements is valid at all

levels. However, it is most useful and direct at the macro- and site levels.

The chapters that follow explore its application.

Space planning unitsSPUs are the entities arranged by space plan designers. At the macro-

level, they are referred to as cells. (The syste matic layout planning ISLP]system used the term acti'uity area.) Acell mightbe aworkdepartment'

a srorage space, a building feature, or a fixed item. Each cell initially is

represe nted by a symbol and identifier.Nlost of these symbols are taken from ANSI Y15.3M-1979,the

American National Standards Institute standard for process charts,

which show the tlpe of activity that acts on a product. For space

planning, the symbol that best represents the space's dominant activity

ir rrsed. Figrrt.2.8 shows the symbols, their meanings, and color codes'

The standard symbols represent operation, transport, inspection,

delay, and storage. For space planning, t'"vo additional symbols-

handling and product cells-are added. The handling symbol

designates areas used for repackaging, transfers, or other elements

that are partly transport and partly operation. The product cell

designates space used for multiple activities on a single product or

small group of products. The definition of SPUs is one of the most

strategic tasks in facility planning. This definition decides the basic

organtzation of the factory.

AffinitiesAffinities represe nt various factors that demand closeness between any

two cells in a space plan. For example, communication or personal

interaction between workers might give rise to an affinity. Affinities are

rated using a six-level scale, with numerical values ranging from +4 to-1. The scale has four positive levels that mean sPUs should be close.

Such high-value affinities may result from frequent material movement

between the cells. Negative ratings mean that the SPUs shouldbe apart.

There also is a neutral rating, 0.A vowel scale, A-E-I-O-U-X, may also be used for rating

affinities; this scale was first popularized by Richard Muther. Here, "A"

represents the highest affinity rating, "IJ" represents a neutral affinity,

"nd "X" i, " rregative affinity. This scale has a mnemonic advantage- The

vowels have corresponding word associations as illustrated in ft gute 2.9.

Chapter 3 discusses the methods for evaluating affinities.

Figure 2.9 shows the affinity conventions developed by building

on the original SLP system. The multi-line representation works well


Descriptlon VowelRating

ScalarRating

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Figure 2.9 - Affinity Conyentions

for manual graphics. On many CAD systems and other computergraphics software, it is easier to use varying line widths, gray scales, andcolor. When color is available, it dramatically illustrates the nature ofthe affinity network.

Figure 2.10 shows the typical range of affinity distributions formacro- and micro-layouts.

Affinity diagromSPUs combine with affinities to form an affinity diagram-the firstof the derived elements. This diagram is an idealized spatialarrangement that eventually becomes a space plan. In the diagram,symbols represent SPUs and lines represent affinities between them.A single line is the lowest value affinity and a four-part line is thehighest. Squiggly lines represent negative affinities. These conventionsare illustrated in figure 2.9.

Using an iterative process, the designer manipulates the diagramto create an optimal or near-optimal arrangement. A near-optimalarrangement has very short high value affinities at the expense oflower


value affinities. It minimizes the crossing of affinity linesFigure 2.11 illustrates the iterative improvement of an affinity

diagram. It is interesting that many computerized planning systemsemphasize this specific process when, in fact, it is the part ofthe layoutprocess to which computers are least suited.

SpaceEach SPU has a unique space requirement. Some SPUs may requireonlv a few square feet, while others may require tens or hundreds ofthousands of square feet.

The nature ofspace and the calculations required changes with eachpianning level. At the higher levels, space is "elastic," and the calculationsmay not need to be as accurate. At the lower levels, space can be more rigidbut also less definite. For example, a particular machine or desk requiresa certain amount ofspace, and the designer cannot make it fit in less space.In other instances, a piece of equipment may require a certain type ofspace because it has a peculiar shape, such as a U. But, under certainconditions, other items may also fit in that U shape.

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Figure 2.10 - Usual Affinity Distribution


The space plon primitiveWhen space is added to the affinitydiagram, it distorts the diagram intothe space plan primitive. It is an idealized representation and does notinclude design constraints.

ConstraintsDesign constraints are those conditions that limit an ideal space plan.Such constraints might be building size and shape, columns, floorloading, utility configurations, external features, and many others.

Space planThe fusion of a space plan primitive and constraints produces a spaceplan. Several viable space plans should emerge. A set of cells, affiniiies,and constraints may give rise to several equally valid configurationdiagrams and primitives. Each ofthese primitives may result in multiplemacro-space plans. The nature of the design problem precludes anoptimal space plan, except in the simplest situations.

The designer's experience is a key factor, for it helps him or herdecide which configurations have the most potential. It helps scale themyriad of possible space plans down to a reasonable number.

Figure 2.11 illustrates the complete progression from fundamental

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Figure 2.1 I - Optimizing o Configurotion Diogrom


elements of cells, space, affinities, and constraints to the macro-spaceplan. These elements and the progression are valid for any size facilityand at any level.

The design projectThe elements of facility space plans are simple; execution of the tasksrequired to develop them is not. Rarely do the tasks neatly correspondto the development as described above. At each level of design, theapproach changes to accommodate the amount of detail, availableinformation, and the dominant issues.

At each level, an approach that fits a wide range of projects andsiruations can be developed. These are called model projec*.With minorvariations, the model project for a macro-space plan, for example,applies to almost any macro-space plan regardless of size, complexity,or industry. Similarly, the model projects for cell design and siteplanning apply to almost any cell design or site-planning project. Thescope, resources, methods, formality, and time required vary accordingto size and complexiry. The sequence, procedures, and deliverables areessentially constant. Model projects for each level of design can befound in Chapters 3,4,5,6, and7.

Chapter 3

The Macro-Space-Plan

The macro-space-plan often is the mosr important level of facilityplanning. It sets the fundamental organization of the factory andpatterns of material flow with long-term effects. From personnelturnover to quality to delivery, the macro-space-plan influences almostevery measure of facility and organization performance.

Done well, it is a platform for reengineering business. It can forcereexamination of markets, products, and processes. It can achievequantum improvements in productivity and profit. It can position afirm for profitability and growth. Done superficially, it can leave realissues unquestioned.

This chapter explains how to design macro-space-plans using astructured, step-by-step approach that results in a near-optimal spaceplan andwide acceptance ofthe results. This approach has severalparts:conceptual frametuork, model project p/ans, task procedures, conventions,and design tools and aids.

Chapter 2 introduced the conceptual frameworkwith its levels ofdetail that narrow the project to a manageable level. These fundamentaland derived elements show how a space plan dwelops. Arranging thelevels in phases helps plan the project. In the pages that follow, macro-space-planning-one of the more important phases-is examined.With a model project plan, tasks are arranged. Procedure diagramsillustrate how to conduct each task. The technical tools and other aidsprovide the means to complete each task. Figure 3.1 is the modelprojectplan for a macro-layout. It shows the required tasks and their sequence.This model evolved from the systematic layoutplanning (SLP) approachdeveloped by Richard Muther almost thirtyyears ago. It has been used


for hundreds of projects and suffices for almost any size and type ofmacro-space-plan. From project to project, the depth of analysischanges along with the methods for each task, the resources) and the

time. Occasionally, a project requires a few additional tasks. However,the basic structure and sequence remain the same.

Each task has a two-part identification number. The two digits

before the decimal showthe tasklevel. The digits followingthe decimalidentifythe specific task, roughlyin sequence. Task03.04, for example,is the fourth task at Level 3, the macro-space-plan.

The tasks ofthe model project occur in three distinct groups: dataacquisition, strategy development, and layout planning. These groupsare near the top of figure 3.1. Two tasks, 03.01 and 03.27, are outsidethese groups. Task 03.01 starts the project, with plans for activities,

timing, and resources. Task03.21 is the actual selection ofthe preferredlavout option. It closes the project and allows preparation for Level4,

the micro-space-plan.A procedure diagram is provided for some tasks. For example,

figure 3.3 is the procedure diagram for Task 03.02. Such diagramsillustrate the logic flow and sub-tasks required. These procedures are

sometimes iterative. Most early layout models emphasized the third

task group, where geometric arrangement takes place. Of course, this

is important, but far more important is the determination of what

spaces to arrange. The definition of these layout cells establishes the

organizationof a faciliry's work. Embodied in cell definition, it has far

more impact on facility performance.Figure 3.1 also guides designers through their first layouts using

the system described in this chapter. The design task at hand should

always be the central focus and any temptations to jump ahead

prematurely to other tasks should be resisted. Completed tasfts also

should not be revisited. Figure 3.1 helps designers concentrate on the

current task, its procedure diagram, and specific discussions. If each

task is done in proper sequence, the space plan will take shape and the

project objective will be reached.It is vital to keep managers throughout the organization informed

during the entire planning process, a responsibility best suited to the

designer. Many facility projects result in fundamental changes andrestructuring. Managers and others need time to learn newinformationand form newviews. If they are not kept informed and involved in thelearning and reasoning process, agreement and consensus will not be

achieved. This could result in the rejection of an excellent layout.There are several formal and informalways ofinvolving managers.

Formal methods include using a steering committee to oversee and

The Macro-Space-Plan 3 1

review progress and adding update meetings to the model project. Akickoff meeting can follow Task 03.01. During such a meeting, keymembers of the organization could review tasks and confirm thatresources are available. An additional meeting, at which time factualdatawould be presented in a non-threatening manner, might followthe

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data acquisition tasks.A formal meeting is valuable for developing operations strategy

and can be an important consensus builder. Agreement and commitme nt

to the operations strategy are vital for later agreement on a faciliry plan.Task 03.21, the evaluation and selection of space plan options, is also

a good consensus builder. Extensive interviews and informal

conversations with managers and others throughout the organizationare also important.

Introducing Cosmos ProductsCosmos Products is the company used as a model in this chapter toillustrate the processes offacilities planning at the macro-level. CosmosProducts converts high-grade vinyl film into decorative material. The

firm has two broad product lines with different processes, markets, and

distribution channels. Roll products-pin-striping material in many

colors, patterns, widths, and combinations-sell in the automotiveafte rmarket. Custom sheet products sell to manufacturers that use them

for labels, logos, and decoration. Manufacturers of campers' boats,

chain saws, and agricultural equipment are typical customers. Cosmosoften prepares the artwork for these customers. Custom products are

flat sheets of material with imprinting, adhesive , and a paper backing.

Cosmos Products started as a small operation about twenry-five

years ago. The firm has grown significantly each ye ar at ̂ n average rate

of 22percent. To accommodate this growth, there have been a numberof additions to the current faciliry. In recent years' management has

experienced difficulty that has manifested itself in too much inventory'

shipping delays, and general confusion.The company's current project is reengineering the faciliry and

related Drocesses. The obiectives are to: reduce material handling costs;

reduce'operating .orrrl i-prove delivery performance; irip.or'.

teamwork, communication, and quality; allow for new products;accommodate 1998 production; and deliver the project under a budgetof $800,000. The steering committee for this project consists of; O. W.

Holmes, president and chiefexecutive offi cer; J. Marshall, chieffinancialofficer; W. Burger, vice president, operations; and E. Warren, vice

president, sales and marketing.

Planning the projectTask 03.01, "Plan Project," develops a specifi c project plan. Developing

a sound macro-space-plan demands significant resources. In this step,

the disposition of those resources is mapped out. The model project in

figure 3.1- works for almost every macro-space-plan project, whether


large or small. Small or simple projects may need less formality, rigor,

and documentation than larger or complex projects. Nevertheless, theessentials of each task must be done.

Step 1 establishes the key decision-makers for the project. Afterthey are interviewed and their objectives are established, the time and

resources needed for each task should be defined. With the aboveinformation and the model, the designer then plans the project. Project

planning software is useful for this task, although for most macro-

space-plans, a simple Gantt chartwill suffice. Figure 3.2 is the schedulefor a new macro-space-plan for Cosmos Products.

In addition to statements outlining tasks, elapsed time, andresponsibility, the deliverables for each task should be identified. A

deliverable is a tangible output for the task. A written summary offindings is a valid deliverable, as are a material flow diagram andphysical infrastructure checklist. "IJnderstand material flow" is not a

valid deliverable because there is no way to see' measure, or judge

completion. The designer should confirm that these deliverablesaccuratelyreflect the intentions ofkeydecision makersbefore proceeding.

For Task 03.01, "Plan Project," the deliverables are a task list, a

Gantt chart, and a summary that includes the project objectives. A

PERT chart is useful but not necessary.The typical time frame for completing a project of Cosmos's size

and complexity is about forty working days. Almost half is used for

information acquisition and strategy. This provides a firm foundationfor the layouts to follow, thereby eventually reducing total project time.This is sometimes difficult for impatient managers to accept because it

takes longer for a space plan to aPPear. However, far less time is spent

on changes and debate. Moreover, a consensus for the plan is morelikely when all participants have been through the information and

strategJ stages.

Information acquisition tasksOnce there is approval for the project plan, the first set of tasks involves

the gathering ofirrformation, both quantitative and qualitative, needed

to develop sound macro-space-plans.This phase has another pulpose that may be more profound and

less obvious: raising awareness throughout the organization and askingdifficult que stions that many in the org anizationmay not have consideredpreviously. At this time, the process ofbuilding suPPort and consensus

for the outcome is begun.In addition to analysis skills, space plan designers must have an

understanding of individual and organizational psychology. Consensus

33


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means time and common understandings that must begin early in orderto bear fruit at the end ofthe project.

Prod uct-vol ume ana lysisProduct-volume (P-!) analysis examines the current and future timeframes for the products and their volumes. This analysis helps thedesigner understand the relationships between various products. High-volume and low-volume products, for example, may require differentequipment and production modes. The analysis also defines futurerequirements, helps select the best planninghorizon, and allows forchanges beyond the immediate space plan.

The results of the P-V analysis provide important input for manylater tasks, and, therefore, should be completed early in the project.Facility designers that have been long-time employees sometimesbelieve they know the products well enough to skip this task, but thisis not recommended.

The procedure diagram for product-volume analysis is in figure 3.3.Block 1 documents the gathering ofinformation. This maybe accomplishedin the following ways: visually examining a range of finished products;reviewing sales catalogs and other information for an overview of theproduct line; and interviewing sales and marketing people. It is alsoimportant to obrain overall sales volume history (usually, five to ten yearsis adequate). Where markets and technologies are changing rapidly, tvyo tothree years may be a more appropriate time frame.

Sales forecasts for the following five to ten years should also berequested. An absence of this information indicates uncertainty. It mayrequire multiple contingencies in the faciliry plan. Unfortunately, salespeople and other managers may be unwilling to commit to a forecast.In such a situation, high, low, and optimistic forecasts could be askedfor, with the explanation that they are needed for facility planningpurposes and extreme accuracy is unnecessary.

A request for a sales forecast may touch off a flurry of executiveactivity because the requested information may nor exist or may bequestionable. Generating the numbers will help build managementawareness. It is sometimes the beginning of an important strategicdebate that ultimately leads to better facility plans. This debate also canlead to important and profound changes in management thinking.

In Block 2, the forecast data is plotted on a line chart along withsales histories. If they are available, oprimistic and pessimistic forecastsshould also be added. After examining the chart, plotting a regressionline like that in figure 3.4 may be helpful. Where seasonality is aconcern, a separate chart could be used to show monthly sales for the


past two to four years. Visual presentation is more meaningful than a listofnumbers. A simple chart often reveals previouslyunrecognized trends.

In Block 3, the products are examined for appropriate grouping.If the facility will only produce a few products, such grouping isunnecessary. Most facilities, however, have many products orvariationsin anywhere from three to fifly groups. Preferably, these groups havecommon manufacturing characteristics as well as customer requirements.Sometimes the distribution channel determines sales groups.

During this task, the groups may have either a marketing ormanufacturing orientation, orboth. A marketing orientation means theitems within a group are similar for the customer. A manufacturingorientation means the itemswithin agroup are similarfor manufacturingpurposes. These groups m y or may not be the same. Sometimes

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Figure 3.3 - Tosk 3.01, Product-Yolume Anolysis


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Figure 3.4 - Soles HistorylForecost

operations people adopt product groups originally devised by marketing.This can complicate the manufacturing process unnecessarily.

Once the groups have been determined, a grouped product profileshould be prepared. Such a profile takes the form ofa ranked bar chartshowing sales volume for eachgroup (fig. 3.5). Sales volume is measurablein dollars, pieces, or other convenient units. Several profiles showingdifferent units such as tons or pallets mav be helpful. A second v-axison the chart shows cumulativepercentage.

A more detailed product profile, Block 4, also might prove useful.There are situations when a product group has significant sales volume,but individual products in the group have few (or no) sales.

The forecasts and P-V analysis become the agreed upon basis forprocess design, space requirements, storage requirements, and materialflow analysis. It is important to confirm the forecasts and other P-Vdata with managers and especially with the key decision-makers.

The P-V analysis can assist with the development of themanufacturing strategy. High volume and low variety suggest high-speed production line equipment. Low volume with high varietysuggests a functional layout. High variety and a wide range ofvolumessuggest cellular manufacturing. Seasonal variation necessitates specifi cstrategies for inventory and capacity. The section on manufacturing


strateg'y will explore these issues more fully.A few short paragraphs or bullets can summarrze the findings

from the P-V analysis as shown in figure 3.3, Block 5.Figures 3.3 through 3.5 illustrate deliverables forthe Cosmos Product

Volume Task The following is its P-V summary, another deliverable.

Cosmos Products : Product-volume sum ma ryThe 22 percent growth rate is expected to slow somewhat during thenext three years. The 1997 forecast volume of 35,000 units will be thefirst faciliry planning horizon. Cosmos has about 10,000 line items inthe product database. These areinl92 groups according to significantfeafures such as base material, color, and width. Thirty-four groupsrepresent 80 percent ofsales. Ofthe 192 groups, 63 generate less than$200 per month of income. We may have significant opportunity tontionalize the product offering or modify our inventory policy.

Existing process analysisTask 03.03, "Existing Process Analysis," involves trackingwork productactivity, or the sequences in which outside entities act on an organization'swork product. For manufacturing space plans, the work product isusually a physical product. In other space plans, the work product maybe intangible such as an information packet. In a hospital, the workproduct may be a patient.

Existing process analysis documents the process currently in place.However, ifthe product is new, such a process may not exist, and a similar

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product and process should be studied. Ifboth product and process haveno current benchmarks, an initial proposal for the process should beselected. The eady completion of this task creates a reference point forprocess improvements and a space plan. The space plan designer usuallyperforms this task with assistance from production people. This bringsdetailed knowledge of actual floor operations to the process.

_ Figure 3.6 shows the procedu re for analyzing the existing process.one or more flow process charts are constructed during ihis task.Modified ANSI conventions (see fig. 3.7) are used in this chartingsystem, whereby symbols represent different types ofevents that involvea work product.

The operation symbol modifies the work product in a way thatadvances it towards a finished state. The transp,rt symbor shows aphysical movement ofthe work product-usually a significant disrance,such as ten feet or more. The bandling symbol represents sorting,positioning, or some other short movement. Inspection checks forquality. The delay symbol represents something that halts the process fora time. Often, this is a work-in-process staging.

Storage is a longer wait, usually in a designated area where thelocation and material have records. A short horizontal line at thebeginning ofthe process shows items from suppliers outside the processunder study. vertical lines on the chart show the sequence ofivents.Horizontal arrows show where several items of work product merge.Text to the right of each symbol describes the event. These notes alsomight indicate time, the number ofpeople, orother relevant information.

Process charts and material flow charts should not be confused.There is a notable difference. with process charts, the symbols are notlocations or workstations or even machines. only the text has who,what, and where information. The lines do nor represent movement ofthe work product; instead, they represent only ̂ ,.qu.rr." of events.

Constructing the chart(s) means gathering initial informationbeforehand; this is illustrated by Block 1 in figure 3.6. Some of thiscomes from the P-vanalysis (Task03.02) and some fromlookingattheprocess and talking with knowledgeable people;

- Block2 (fig. 3.6) of the procedure begins addressing the questionof how many and which products to analyze.It asks if theie are productgroups with similar processes. The answer should be based on theobservations and knowledge currently available. Some situations maypresent thousands or tens ofthousands ofproducts.

A definite answer may nor be possible without extensive analysis,w-hich is unnecessary at this point. Suppose, for example, an injectionplanning facility were being planned. The plant supplies 67 molded

39


items but each item comes inany of 79 colors. This gives a total of 7,273item, or SKU, numbers. However, the plant uses quick color changeequipment and has honed their skills in color changes. For manufacturingpurposes, color is not a differentiator. The molders can make any givenpiece in any color or a succession of colors without difficulty. The 19colors of each part would therefore be grouped as if they were a singleproduct. If such groups cannot be identified, Block 3 is the next steP.

Block 3 asks if there are fewer than2i products. If there are, each

Process Chart

Figure 3.6 - Task 3.03, Anolyze Current Process


item is charted. For more than 25, a charting sample of 5 to 25 itemsshould be selected. This is Block 4 or Block 10. Product groupsidentified in Block 2 are treated similarly, resulting in Block z. Simptysubstitute groups for individual products in the process described.

There are several methods of preparing the charts. For a simpleprocess' personal observation is enough. If computerized routings areavailable, they may be used. A personal interview with someonJ whoknows the process well is sometimes satisfactory. usually, however, agroup approach should be used. It caprures a wide range ofopinion andknowledge and helps build consensus for the chart as well as for the laterspace plans.

_ The group approach garhers the mosr knowledgeable peopleavailable. Together, they construct a chart that follows the matirial oritem and records events that affect it. People often have difficultydistinguishing the product or item, workers, and machines. To helpwith this, they should imagine they have become the product and haveassumed its role. They should then report their experiences.

All elements should be recorded. Frequenth. there is an ,,official"

process documented on routings and a computeidatabase. Then thereis the "unofficial" process-what really happens. unofficial erementsmay include set downs, queues, and repairs. The group may wish toinclude other information on the chart such as process time or cost.when this is complete, the group should make further commenrs,particulady about which process elements are troublesome. someadditional questions to bring out important process issues are:

. Which elements generate the most quality defects?

. Which elements are most difficuit to set up?

. Where are the largest inventory buildupsl

. Which elements have the most scheduling difficulry?

. Which elements demand the most labor?The analyst guides the group during this task by deciding:

. the level of detail for process elementsl

. the number of products to chart;

. whether and how to group products; and

. whether and how to group items that go into a product.To tally a count for each f'?e ofelement, the percentage oftotal elementsis calculated. These could be charted on a bar or pie graph. Only theoperation symbol adds value. All other elements contribute only cost ortime. The percentage ofvalue-adding elements is called the value addedindex (vAI). vAIs frequentlyare intherangeof 20 to 30percent. Awen-thougtrt-out process should have a VAI of at least 60 p-r.ent:

Next, a short summary ofthe results should be pripared. The flow


process charts, element profiles, and written findings are deliverables.The following is the Cosmos process summary:

Cosmos Products: Existing process summotyThe value added index (VAI) for roll products is 13 percent' The VAIfor commercial products is 20 percent. These are both quite low. There

are a substantial number ofopportunities to reduce transport' handling,and storage elements.

In ro11 products, the processes require special equipment' This

equipment is relatively small scale. Changeover times range from five

to forty-five minutes.For commercial products, process scale is very small in the manual

operations at pick-and-pee1. Die-cutting operates on a medium scale.

Silk-screening uses large-scale presses. We may wish to investigatesmaller scale processes for silk-screening.

Slit-and-sheet operations all use a single slitter that is quite fast.Both commercial and roll products use the same material. Optimizingthe use of each roll saves significant wastage. It seems to dictate

continued use of a common slit-and-she et ̂ tea for all products.The process charts for Cosmos Products arc fairly simple. In

addition to the modified ANSI conventions, figure 3.7 shows the process

for one of Cosmos's roll products-a vinyl stock material for signs and

other decoration. Figure 3.8 charts the process for a multi-color, die-cut

decal, a typical product from one ofCosmos's commercial markets. These

decals decorate automobiles and other outdoor equipment. This singlechart represents several thousand distinct products.

With complex processes, it is often tempting to combine items,

thereby reducing the complexity of the chart. Simplifying the chart,

however, is not the same as simplifring the process. Much of the value

of a process chart is its accurate representation of the full complexity of

a process. It is an important means of building consensus and

understanding for a new space plan. A readable chart on large-scaledrafting paper may be necessary to convey the full scope and complexity

ofthe process.

lnventory analysisTask 03.04, "Inventory Analysis," is important for at least two reasons.First, inventory is usually the primary or secondary capital consumer'often vying with facilities for this dubious honor. Second, almost every

difficulty, problem, or defect in the business system eventually comes torest in inventory. Inventory thus can be an indicator of the efficacy of

the business system.

The Macro-Space-Plan 43

The inventory analysis uses financial and warehouse data. Thefirst step in the analysis is to prepare a chart that shows historical annualinventory turns, usually for five to ten years or even further if theinformation is readily available. Inventory turns are the total inventoryfrom the firm's balance sheet divided into the total sales for the previousyear. sales information usually comes from the income statemint. Theindustry average for the inventory turn also should be listed on the chart.The inventory turns for cosmos Products are illustrated in figure 3.9.

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One or more inventory profiles like that in figure 3.10 should beprepared. These are pie charts or bar graphs that show the currentdistribution of inventory across several classifications. A productionclass profile should show invent ory by raw material, purchased items,finished goods, and work-in-process (WIP). A product class profileshows inventory by product or product group. Other classifications,such as customer Wq are useful in special situations.

What does inventory analysis determine? Trends in inventoryhistorv can help size storase areas for the new facilitv or layout. Such

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trends provide valuable input for the development of manufacturing

strategy. An unfavorable trend might initiate a change in strategy.The production class profile also can suggest areas forimprovement.

High levels of raw materials or purchased ite ms indicate a supplier and

purchasing issue. High levels of WIP indicate material movement'

scheduling, or focus issues. A high volume of finished goods indicate

scheduling, sales, or marketing issues. The following is an example of

an inventory analysis summary:

Cosmos Products: lnventory summaryInventory volume has increased significantly during the past six years.This increase is higher than sales growth' resulting in a gradual erosion

of the rurn ratio. Management anticipates that, as a result ofthe facilityreengineering project, the number of turns will increase, and inventorylevels will come down.

The inventoryprofile ffig. 3.10] shows the portion ofinventory at

each production stage. This indicates significant opportunities for

reducing finished goods and purchased vinyl.

Space AnalysisThe space analysis reveals current space use. The space diagrams

indicate whether the existing layout is primarily functional, product-

focused, or a mixture, as well as which products use line or cellular

production andwhich use functional layout modes. This space analysis

also helps define layout cells later in the project and can be a basis for

space requirement calculations for the new facility.The space profile also reveals imbalances in space use. Value-

added space generally represents 60 percent or more oftotal space usage

in the best space plans. When value-added space falls below 30 percent,

there are significant opportunities for improvement. Large amounts of

storage space can indicate a need for more ceilular and line production,

or it may show a need for scheduling system revisions. Using large

amounts of space for inspection or repair may indicate significant

quality issues.When operations focus is an issue, adding a product space class

diagram is useful. It classifies space by product. Each product group has

a pattern or color. Space used for operations for a single product group

will have only one color, while functional space used for operations for

many product groups will have many colors. A product-focused layout

has a "clean" product space diagram and a "messy''functional space

diagram. A process focused (functional) layout has the opposite. The

section on oDerations focus explores these issues in more detail.


The analyst usually performs Task 03.06, "Space Analysis,', withassistance from those who are familiar with operations. The analysisbegins with a current drawing of the facility, preferably one that showsmajor departments and, perhaps, details of equipment and furniturelocations. The colors or patterns in figure 2.9 are then used to codemarked-off space on this drawing. A tlpical result is the existing spacediagram for cosmos Products in figure 3.11. The area for "".h ,p"..class is totaled and a space class profile similar ro the pie chart labeled"Existing Space Profile" in figure 3.11 is prepared.

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The collection and presentation of this information can alert

managers to key issues. As with the other information acquisition tasks,

this is an important result of the space analysis. The analyst should

encourage managers to begin asking such questions as:' Why do we use 40 percent of our facility for storage, yet we

constantly fall short on customer delivery?' Why are aisles in our facility so disjointed and chaotic?' Why does Product A require 18 percent of our facility s space

but only generates 3 percent ofour sales and 0.5 percent ofour profit?

The following is the space analysis summary for Cosmos Products'

Cosmos Products: Existing spoce summoryI\{uch of our space appears disconnected and scattered. The existing

space diagram shows no clear, undedying plan. The proPortions of

space use are better than in many other industries, but could be

improved. Significant opporrunities may exist in reducing storage and

traffic areas. Some parts of the plant have narrow aisles. Others have

overly wide aisles that become WIP storage areas.

Organization analysisTask 03.06, "Organization Analysis," has several purposes. It can help

determine the size of support facilities such as restrooms and cafeterias.

In office layouts, it may be essential for planning space based on work

station requirements. It can help evaluate the current and proposed

space plan. It can assist in formulating a manufacturing strategy or in

identi4'ing inconsistencies between strategy and practice.Organization analysis usuallybegins with a complete and current

organizatronchart from the personnel department. It should include all

departments and employees that use the facility hdown to the lowest

levil. It also might include departments and people who reside outside

the facility but have a major impact on operations. An example might

be a corporate engineering department that designs processes and

oroducts but is in a remote location. Names and titles for each

production worker are not needed, but there should be an approximate

count for each supervisor and department.These charts can become quite large and may have to be plotted on

large-scale drafting paper, but the chart should not be broken into small

sheets. This may be convenient for the analyst but it disguises the true

nature of large, convoluted organizatrcns. Maximum impact is the aim.

Managers must develop and approve the sftategic basis of the space plan,

aswellas the spaceplanitself Figure 3.12 shows howto constructthe chart.

After the organ\zation chart is complete, the current space plan


should be examined. A continuous, enclosed line on the organizationchart should represent each major area on the layout, surrounding eachposition or department that inhabits the layout area until all positionsare accounted for.

Figure 3.12 illustrates space andorganization congruity. It showsconsistency between the current otganizatron and the currentarrangement. People and positions in the same department generallyoccupy contiguous areas.

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A messydiagram (fig. 3.13) demonstrates howmanypeople in thesame organization units are scattered through the facility. The diagramby itself does not tell us whether the facility or the organization iscorrect; it shows that they are inconsistent.

ldentifying physical infrastructurePhysical infrastructure supports operations for all or most of theproduct line but does not contribute directly to the process. For this

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reason, physical infrastructure elements do not appear on the processcharts. Infrastructure seldom relates to a single product or productgroup. Examples are: cafeteria, maintenance department, heating,ventilating and air conditioning space, and electrical switchgear rooms.These elements are necessary for operations and they are essential to thespace plan, yet they are easy to overlook.

A physical infrastructure checklist (fig. 3.1a) helps catalog thesefeatures. using this form involves stepping through thelist with a smallgroup of knowledgeable people. Qrestions to ask are:

. Is each item in the current facility?

. Will a similar item be neede d in the new facility or space plan?This list will be input for the cell definition task later in the project.

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Analyzing material flowIn this task, information from the process analysis is superimposed onthe current space plan. The resulting diagrams bring attention tomaterial movement opportunities. They also indicate the need for morecellular or line production modes. This task also provides a baseline formeasuring handling improvement due to the new facility or space plan.

Forthis task, the process charts andlayouts developedinTask03.03and Task 03.06 should be used to select one or more items to representtlpical products or parts. Lines and arrows should trace movement acrossthe layout. The number ofmoves for each item should be counted and themovement distance for each item totaled. If the analysis is performed formany ite ms, the results should be averaged. Figure 3.15 is an example. Itshows long moves, crossovers, and backtracking. This faciJity has signifi cantimprovement opportunity. Moves between organizational departmentsalso indicate improvement oppornrnity.

Managers are often unaware of the severity of material flowproblems. This analysis will document these issues in a dramatrcway.I t helps management take another step towards consensus,understanding, and support. Other types of material flow diagrams arealso useful for a more complete picture of the current material flow.

Other issuesOther issues can affect the layout. Theyusually arise in initial discussionor during data acquisition. Some examples are:

' a scheduling system that dictates batch movement throughthe plant;

' difficulties in hiring skilled people that maypush a companytoward automation; and

' external regulations such as those in the pharmaceuticalindustry that may dictate functional operations.

Experience andjudgment are the bestguides. At minimum, abrieflisting of these issues is necessary. They may need significant analysis.

The strategic frameworkAn operations strateg'y is the dominant approach or philosophy thatguides the design of the manufacturing or business system. Operationsstrategies often determine the competitiveness and ultimate fate of anorganizatron Strategyleads to structure, as well as the arrangement andinterconnection of business elements. Such elements might be machine s,information systems, people, or facilities.

Strategies extend overlongperiods-years or decades. Theyencompassall the products and processes, permeating every area and aspect ofthe


organization They affect and determine the behavior of individuals.Operations strateg'y may be explicit or implicit. An explicit

strateg'y is stated, orally or in writing. Properly promulgated, it guidesdecision-makers in their dailywork, building a common framework forboth operational and structural decisions.

An implicit strategy, by conrrast, is not written or publici zed assuch. It often results from common understandings aboutwhat mattersfor the business. These understandings may be rational or senseless,effective or ineffective, consistent or contradictory.

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An implicit strategy is determined only by watching patterns ofdecisions and behavior over time. For example, has the organizationevolved along functional rather than product lines? Is new equipmentpredominantly high-speed and large-scale? Is the scheduling systembatch-oriented? Even the absence ofpatterns is a pattern.

Management is responsible for operations strateg'y. Top managerscan abdicate the task of enunciating that strateg/, but they cannotrelinquish responsibility for the result.

Determining the framework of an organization's operationsstrateg'v hinges on the identification of hey manufacturing tasks,focusopportunities, and an operations strateg! sumlnar! (or statement).

Key manufacturing tasks and focus opportunitiesThe design of a manufacturing plant or business is like any otherengineering design. It optimizes performance on some dimensions,while reducing optimization on others. The business environment andavailable technologv place limits on the design.

This has an analogy in aircraft design. Aerospace engineers candesign an aircraft that flies at Mach 3.0 or one that carries 350 people.They can design an aircraft that circles the globe on a few hundred gallonsof fuel or one that lands on a 500-foot runway. However, they cannotdesign an aircraft that does all ofthe above. In the 1960s Secretary ofDefense Robert McNamara tried to buy such a multi-puqpose aircraftcalled the TFX. This aircraft did not achieve many goals.

Yet, manv managers demand factories that produce manyproductsquickly for manv customers, at the highest quality and the lowest costwith output changing from day to day. Such a factory lacks focus. Abusiness operation rarely performs well on more than two or three ofthese key dimensions. An unfocused factory has too many tasks or toomany products or too many process technologies or too many disparatecustomers. It is often too large for effective management. Such afactoryrarely performs any task well.

Manufacturing focus concerns the organization of products andprocesses. In the early 7970s,Wickham Skinner reco$nized that largefactories with many products usually performed poorly. Several factorscontribute to this effect:1. A wider range of products usually brings more variery in the

process. This requires greater complexity in handling, storage,tooling, changeovers, and skill requirements. It affects almost everyfacet ofoperations.

2. Awider range ofproducts often must serve disparate customers and

3 .


markets. One market may regard delivery speed as a top prioritywhile another demands quality or customization. Such variedmarket criteria increase the diffi cultyfor manufacturing and decreaseeffectiveness.

Economies of scale are the usual rationale for increasing factorysize. Economy of scale refers to the increasing efficiency as plantiand prorcesses grow in size and output. The idea was popularized byHenry Ford's mass production methods. Wickham Skinner coinedthe term "dis-economies ofscale." Increasing scale brings such dis-economies as increased coordination effort, isolation of specialtydepartments, and isolation from customers. As a factory growsbeyond 300 to 500 persons, the dis-economies of scale soonovercome the economies.

Larger factories have greater distances between departments. Thisincreases material handling costs and exacerbates the isolation andcoordination diffi culties.

5. unfocused factories often have extensive veftical integration. verticalintegration with a wider product range requires more disparateprocesses. This requires far more technical mastery than a morefocused operation.

A focused factory strives for a narrower range of products,customers, or processes. The result is a factory that is smaller and hasfew key manufacturing tasks.

In recent years, Skinner's concept ofthe focused factory has beenextended. Focus is an issue when organizing any combination ofproducts, technology, and people. It applies to service operations, tofactories, and to departments within the factory.It applies to workstationswithin each department. The issue is: by what criteria shall we divideour space, people, and machines into manageable units?

There are severalpossible responses. Some examples are: products,processes, markets, customers, geographic areas, and supportrequire ments. For a more complete discussion ofoperations focus, referto the first chapter of the Handbook of commercial and IndustrialFac i li ties M a n age m en t.

For the macro-space-plan of a factorfi the focus choice usuallynarrows to product orprocess. Aproduct-focused plant groups operationsinto departments that focus on products. Each department must haveall equipment and skills for all operationt, y.t only process a single

4.


product. This eliminates changeovers and reduces coordination and

scheduling problems.A process focus allows each department to specialize in their

particular process or craft. It is a common arrangement in many plants,

probably taken from the medieval craft guilds.Many of the perceived advantages of process focus are elusive in

practice, although process-focused space plans and organizations do

work well in certain, specialized situations. On the whole, product-focused space plans are preferred because they have many more

advantages. Designers should aim for the highest degree of productfocus attainable, using process focus only when exotic skills and largescale processe s make it necessary. The areas in which product focus has

advantages include: cost control, coordination, material flow,

management and supervision, equipment utilization' knowledge and

skills, response time, flexibility, quality, and organization.Product focus simplifies cost control because it pulls together the

same or similar products and converts many indirect costs to direct.

Elaborate tracking and allocation schemes are often unnecessary.Because a process-focused operation must address a wider productvariet!, allocation of indirect costs is more difficult.

Product focus simplifies the coordination of sequential processes.

Operations are in small areas, reducing the complications of distance

and isolation and simplifying personal communication between

operations. Because the product range is narrow' only a small variety of

problems and issues will arise. Product focus often uses simpler methodsfor production control such as Kanban and direct link. In conjunctionwith MRP-type systems, it reduces the number of work centers the

system schedules.When compared to process focus, material flow reductions of 80

to 95 percent are common for product-focused operations. There are

fewer interdepartmental moves, and distances are shorter. Variableflow paths often become fixed upon conversion to product focus. This

allows the use of simpler handling devices, such as conveyors' or even

manual handling. Process-focused space plans often require expensiveautomatic guided vehicle systems or even more expensive fork trucks.

Because of the smaller product range and better communication,product focus simplifies management. Product-focused cells oftenrequire little or no management because they naturally encourageteamwork. Product focus achieves the shallower org nrzations now in

vogue. More emphasis is placed on products and customers rather than

departmental loyalties.In theory, product focus uses more equipment for the same output

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than process focus. However, firms seldom realize the theoreticalutilization advantage ofprocess focus because ofthe complex schedulingrequired. In practice, there are several approaches to mitigate theapparent under-utilization of product focus. One way is to design cellsthat maximize the use of major equipment while sacrificing usage onless expensive peripheral equipment.

Product focus requires a wider range of employee skills andknowledge. This mayplace large trainingburdens on firms that convertfrom process focus. However, the teamwork and job enrichment thatresult reduces turnover. Process focus, on the other hand, allowsconcentration on process skills, and highly complex and technicalprocesses sometimes need this concentration.

Process-focused organizations tlpically have verylong throughputtimes. As a result, they cannot respond quickly to changes in productmix, volume, or special requirements. Many process-focused plantscounter this with extensive inventories, even though inventory isexpensive and rarelyreduces the response time on customized products.Product focus allows firms to eliminate finished-goods inventorywhileimproving delivery performance and reliability.

Process focus is more flexible, at least in theory. However, severalmeans exist to achieve good flexibility in product-focused layouts. Forexample, the use of small-scale, mobile equipment can allow productfocused cells to be formed, disassembled, and re-formed newproducts.

Product focus generally achieves high quality levels. This resultsfrom quick feedback, good communication, easy coordination, andhigh commitment. Process focus sometimes mayhave aqualityadv^nt^gefor complex or technical processes.

Product focus is most compatible with newer approaches based onteamwork and empowerment. Process focus lends itself to traditionalcommand and control management styles, often requiring a substantialhierarchy to deal with increased coordination and complexiry.

The concepts offocus and key manufacturing tasks are interrelated.Focus identifies the most important dimensions and optimizes them.The business addresses a narrower market, but addresses it very well.The key manufacturing tasks state what manufacturing must do well tosurvive in the market.

Process elements are the equipment, people, and operations that addvalue to aproduct. They direcdytransform materials, information, and parts.

O perati ons strategy su m m a ryA sound operations strategy addresses four areas: mission, ?rlcess,i nfr a s truc t ur e, and fa c i I i ties (physical infras tructure). The site mission


states, in a few paragraphs, the purpose of the site. It identifiescustomers, products, and processes. It defines one to three keymanufacturing tasks that directly correlate to success in the marketplace.The mission statement also might address important external issuessuch as environmental policy. The remainder of the operations strateg'ysummary flows from the mission statement. It states how the firmintends to achieve the key manufacfuring tasks.

Infrastructure supports the process but does not directly affect theproduct. Non-physical infrastructure covers a wide variety of elements.It refers to people and information systems. Examples are: schedulingsystems, training operations, personnel departments, and tool designcapability.

Physical infrastructure, is tangible and is generally synonymouswith facilities. Buildings, utility systems, roads, and docks are notdirectly in the process stream; rather, they support all processes.

A good summary addresses each major topic at a policy level. Fewcompanies have a strategy summary sufficient for facility design purposes.For such purposes, those elements of strategy and structure that relateto facilities ne ed to be emphasized. For example, compensation syste mshave major effects on org anizatronalbehavior but little consequence forthe facility plan.

Figure 3.16 provides a structure for a strategy statement. Such astatement normallyconsists ofone to fourpages summarizingthe firm'sintentions for each structural element. Figure 3.77 is the statement forCosmos Products.

The absence ofan effective summarypresents the facilities plannerwith difficult options:

'proceed without a summary;'guide management as they develop a stratery;' write a summary based on an idea of what it should say; or' write a summary based on what probably will happen.

Development ofa strategy summary relies on all ofthe informationcollected during the first task group. Even this may be insufficient fora complete statement. Strategic development is a high-level task thatencompasses almost every aspect of the business.

ldentifying operations strategyFigure 3. 18 is the procedure diagram forTask03.10, "Identi$'Operations

Strategy." Block 1 ofthe diagram begins with the assembly ofinformationin a form suitable for a report or presentation. The operations strateg))outline, Block 2, is also needed.

Block 3, the current position summary, shows the company's


present status. A management team should assist with this step or atleast concur that the summary reflects the company's current sifuation.

Blocks 4through 6 determine management's readiness forchange.It is not enough for management, or certain individuals, to express aneed for change. The management team also must be capable ofcarrying through with change. The success of a space plan depends onthe organization's ability to support it. For example, a cellular space planthat depends on kanban production control and small lot sizes needs

TechToolsstrategy and structure

Key lssues

1.0 Site MissionL l Site Foils

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2.0 Process2.1 Production Mode(s)

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3.3 Organization Structure. Fwtional. Producl. Othq. D€pth

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3.6 Production Control. Mrke{coiders, Makb-tcstck.Physicallink. Br@d€n. Keban. MRP. Reorlcr Point

3.7 SupplierPolicies. S€lEtiooc.iteria. Single / Multiple Soltffi. Conm Time HoriaN. Scheduliry Appr@h. ShippitrgPolici6

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4.2 Site Ircation & Size

4.3 Tmsportation Acc€ss

4.4 Utility Systems4.5 Expmsion Policies4.6 Nil Product Flexibility4.7 New Proess Fluibility4.8 Resle / Disposal Policy

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Figure 3.f6 - Strotegy ond Structure Key lssues


rapid setup techniques and participative management. Managementmay not have the wherewithal to adopt these techniques.

If management has an acceptable strateg'y summa{I, this summaryshould be used in subsequent space plan work. Ifmanagement expressesa desire for operations strategies different from current practices, theirreadiness to make required changes mustbe evaluated. This is a difficultand sensitive decision that requires years ofexperience in institutionalchange. Designers who lack such experience should seek counsel fromthe management team or others in the organization.

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At Cm w q!@t to be a good ngighbor a|dintegnl pa of or muity. Com6 shold b€lilM 6. sdbhctory mployers.

ProcassRoll Ploducte Cffic will striv€ for a

produd-f@sod opcdion with the dctprid ofprinBry slittDg *trich seruc both Roll andCmial opcroim. we will h.w a mix of largeard $utl s€lc cquipM in G@p T@tmlo$/@lls. Rapd stup i5 a importart prioity forequipdd sl€ti@ ald op€Blio. We will attqnptd avFage cquipMt utiliation bwq 60% atd85%. we will add pr(Bs eprcity 6-12 mthsahad of daMnd. Pffis should harc a M€gability iDdsx of L4. We wil ffi gEduly tohigh€r bh@logj/ p|ffi puitbd they re@NisM wifi dr f{w ffitcgy, @st justified adhaw ad.q@ spport.

Co||ercid Producte Cm6 will triw forptodud-foq8 witlin thc limits s€t by plrc andmviourroal requimts. This my diclatephysical *pmio bawo silkscming adsubsequd opcdi@. Prinary slitring nd sbetcunirg wiU |@in p|lss f@used. Our prlssscale will be a mix of largc aDd snEll @cpordmgto th€ ordcr mix. Rapil s€tup is d importantpriority o the ruller *ale, lw volme pre.We will attqnpt o arcnge utili*io of 807e90%

m larg$scale silks|q priffi aDd 50olc?0% ddlFi equipMt. We will add snBll-scale equipmotin advd@ of del@d dd brgFscale equipmdwfio dqMnd is prc@. All cquipM will haw amidmm oapability index of 1.4. we will strive forfte laK sd highd t4hDl€y lwel on large{ca.lesilksHing.

IntraslructureC('ffi will triw for a produd.focue4

shallw, multatiw ard infonna.l orgeiz*i@. Wewill gradully move Mrds a ptticipatireffi+aed org&i4i@ ovc the M five yec.

Our Ming s)ffi shqld a@mmodataciivity-bded 6ting using @st &iveB foroverlsd allstio. Wc will u* prcj* mirg forc@ial work ud p|1ss @sting for rollproducts. We @ogniz€ the limitatioE ofomtiooal mmtirg systans for maagmtdsisic.

Prcduaio ontrol will us MRP-ty?€schcdrli4 for mcial produ* dd supplieN.We *i[ u$ krnbd s]ffi for inbrul schcdulingof 6ll opediG. Cfficial produd will b€sidly mkefrrder. Roll prodrd will u$ strEll6"i"h€d goods st@ls for the highct volw E0o/o oflim itans. Tlrc mining 20% of lw-volme rcllproduc wiu b6 trEde ro or&r. Unusually largeor&rs ofrcll pJoduG will have c{md€d deliveridald be rade to or&r.

At Cffi we will trirc br l@g-bmreldidBhip! wilh rcliable $ppli6. We will sldsupplicF @ lb€ b6is ofquality, d€lirery rcliabilityaDd @$ in tld order.

Facllltles

Sit€ fqs will folN @rpoftlwel stEr€gisd w siB develop. All sib, nw dd in dF fuhrewill haw a ruimm of 200 fiplcyH. Site #lrequic only limired capability for nw prcduc{sand prms. Significa*ly difrpr@t prws,such a a esting openrioo" sbotrld hare a separatesib.

Figure 3.17 - Physicol lnfrastructure Stdternent


An organization may not want change or may not be positionedfor change. If so, the operations strateg.y summary should identify theapproach that is most likely to be adopted in practice.

If the organizatron desires and is ready for significant change,initiating a strategic debate is a good idea. This debate should concludewith a proposed operations strategJ summary that will help the spaceplan designer carry out the new strategy during the facilities plan.

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One sub-task of Task 03.10 is the identification of focus

opportunities. The concept offocus applies to space plans, organi.zatron

,t-rrr.tur"r, and other elements of the enterprise. Developing an

appropriate strategy for facility planning means identifying the most

uppropriut. focus-for the facilities at each level. This is not a final

unalyris. Rather, it guides and gives preferred directions to space

planners as they proceed with their work.

The flo- piocess charts from Task 03.03 can help sort this out'

Figure 3.19 shows the process charts for the manufacture of cosmetic

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containers. The principal operations are injection molding, assembly,transfer printing, and packaging.

There are four basic containers. Each has varieties of color andprint. Because color and print changeovers are fast and easy, the plantconsiders only container styles different products.

Process elements usually touch the product. At Cosmos Products,people assemble, lathes turn, and molding machines convert powderedresin to solid components. The selection, arrangement, and operationof these and similar elements are part of process design. A purelyprocess focus would group the molding machines into a moldingdepartment, printing into a print department, and assembly into anassembly department. Each department would perform operations onall four products. Envelope A shows how assembly operations might fitinto an assembly department.

Envelope B shows how all operations for a single product wouldbe coordinated.

Sometimes focusing purely on product is impractical. Instead,group technology cells might be used, whereby a series of operations forseveral products take s place in a single cell. Envelope C shows how theseoperations might be coordinated.

Various mixed approaches are common. For example, processfocus might be used for receiving, shipping, and molding, while otheroperations might have a product focus.

Figure 3.20 shows the procedures for ident i fy ing focusopportunities. The first is preparation ofprocess charts for all products.This maybe done on paper, or, forlarge numbers ofproducts, forms ofcomputer analysis can be used.

Next, products that are candidates for a plant-within-plant areidentified. These would have enough volume to justi$r separateequipment, people, and infrastrucrure. Any such products should be setaside and removed from further consideration. A plant-within-plant(PWP) is a self-contained production facilitywithin the walls of a largerfacility. Ideally, a PWP is completely independent with its ownsupporting infrastructure.

We then search for products (or components) that have similaroperation "strings"-troups of operations that can use the sameequipment, the same people, and perhaps the same tooling. Is thereadequate volume to justiS, dedicating equipment, people, space, andinfrastructure to this group? If so, these products or components mustbe removed from further consideration and assigned to a grouptechnology (GT) cell.

This procedure continues until the only remaining products and


operations are those too small and varied for dedicated plants or GTcells. Process-focused cells are then developed for these items. Analternative is a job-shop department similar to a prototype shop.

Some space plans involve a great number of products andcomponents, perhaps thousands or tens ofthousands. In these situations,practicality may not allow a detailed analysis at this point in the macro-

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space-plan project. The objective for this sub-task is to identi$'opportunities, not to make decisions.

For Cosmos Products, the two distinct product lines-roll productsand commercial products-separated naturally into focused factories.However, the slit-and-sheet operation served both product lines. Manylog rolls, when slit, became stock for both product lines. The narrowwidths necessary for roll products are a natural byproduct of slitting forthe wider commercial items. Maintenance, quality, and several otherfunctions cannot be split economically. For this reason, the design team'saim became two semi-focused factories within the same facility, i.e.,plants-within-plant. Several functional areas serve both focused factories.

Roll product operations lend themselves well to GT cells. However,the large number of items precludes a complete GT analysis at themacro-space-plan level. The team therefore developed a composite cellfor roll op erations, with the intention of analyzingthe proces s in gre aterdetail and designing GT sub-cells at the next design level.

In commercial products, the silk-screen operations call for tightenvironmental control. In addition, the existing silk-screen presses uselarge-scale, high-technology equipment. The team decided to put twocomposite cells in the commercial area. The first composite cell wouldinclude silk-screen and any related operations in the controlledenvironment. A second composite cell would have post-silk-screenoperations such as thermal die-cut, pick-and-peel, and packaging.These smaller-scale processes would be arranged into GT cells.

Designing the space planWith adequate information and an agreed-upon strateg-y, the actualspace plan can be designed. The activity to this point may haveconsumed as much as half of the time and resources available to theproject. Nevertheless, these expenditures were good investments.Managers from all areas have new perspectives. The factual data hastempered emotions. As the space plans develop, debate should beconstructive and rational. The final selection will enjoy wide supportthanks to management's broader understanding of both business andtechnical issues.

Defining space plan cells and processesTask03.11, orthe definitionofspaceplanningunits (SPUs), is the mostfundamental and important task in space planning. It establishes theorganizationof space and must fit with a corresponding org anization ofpeople and processes. Moreover, all subsequent work flows from thistask. An omission or error invalidates all of the work that follows.


A procedure chart for this task is in figure 3.21. Blocks 1 through3 call for assembling deliverables from all previous tasks. Block 4reviews operations strategy. If the strategy statement favors a process-focused (functional) space plan, planners shouldproceed to Block5 andskip Blocks 11 through 23.

In Block 5, functional and support cells for the space plan areidentified by examining the cell definition summary (fig. 3.22), thespace analysis, the infrastructure checklist, the process charts, and the

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organizairon chart. We look for activities, people, or equipment thatwill require space. For each such item, a cell could be defined, or theitem could be combined with others into an SPU. Generally. ren tothirty SPUs should be identified

In the SPU definition summaV, the space planners shouldidentiSr each SPU with a name and number and show those that areincluded. The space planner may also specify exclusions. The columns

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that show the source of the cell definition should be examined (e.g., doesthis activity show up on the organization chart, process chart, or both?).

If the operations strategy summary calls for a product-focusedspace plan (line, cellular, or Toyota), support cells still need to beidentified. However, a product-focused space plan may absorb manyindirect activities within the product-focused cells. For example, in anelectronics plant, assembly-integrate-test cells each had one ofsevenmajor products. Schedulers, test engineers, and process engineers sat inthe cells. A subsequent organization realignment had these peoplereport to cell managers rather than functional managers.

If the plan's strategy calls for product focus, planners shouldoroceed to Block 11 to decide whether a current cell definition isiatisfactory. If the factory has previously operated with product-focused cells, rearranging them may be all that is needed. Suitabledefinitions may have been developed during Task 03.10, "IdentiS,

Focus Opportunities." Now, additional product-focused cells shouldbe defined. If the current definition is unsatisfactory, the next step isBlock 13.

For a product-focused space plan, the planner can define product-focused cells at the macro- or micro-level. Defining work cells at themacro-level is satisfactory if the likely result is a manageable numberand if the effort reouired is reasonable. Sometimes this is not the case.For example, an adiquate definition might require an extensive grouptechnology analysis, which is inappropriate at the macro-level. Or the remight be many small cells that are difficult to arrange. If so, the plannershould consider using one or more composite cel1s.

A composite cell consists of several smaller cells. In the CosmosProducts example, post-screen operations and roll operations lendthemselves to cellular manufacture. Designing the individual cells anddeciding which products go in them is a prolonged, detailed, anddifficult task that, in this case , has been postponed until the next designlevel. Therefore, post-screen operations and roll operations have beendefined as composite cells. This was not absolutely necessary. A grouptechnology analysis might have been conducted at this macro-level toidentify families and define the subcells.

If composite cells are not used at the macro-level, Blocks 14through 16 are the next step. Planners evaluate the number ofproductsand select an appropriate analysis tool. For a small number ofproducts,twenfy or less, the planners should go to Block 20, chart the process foreach, and then use the process charts in Blocks 18 and 19. In Block 18,the space planner identifies preliminary part families; in Block 19, thecells are defined.


For a moderate number ofproducts, less than 100 but more thantwenfy, production flow analysis is used. The process then moves toBlock 18 for defining product families and Block 19 for defining thecorresponding cells.

_ Y""y products (more than 100) will probably require aclassification and coding analysis. This is an extensive undertaking butone with significant benefits.

After defining SPUs, it is time ro review the processes forimprovement. The process analysis at this level may be general.Examining the process further maybe done during the detailing of thelayout at the micro-level.

In Block 7, the space planner determines key equipmentrequirements. This is not always a complete list; rather, it identifies

1aj9r equipment that occupies significant space or needs significantfunding. In Block 8, capaciry is checked. Normally, this lapaciryanalysis is confined to key equipment or known bottlenecks. piocesscharts for any significant process revisions and a list of key equipmentmight also be helpful.

When complete, a cell definition summary is in place. Celldefinition should include every space or feature necessary ior the ner"plant. It is not always an elaborate document. Everyone involved shouldknow what each SPU conrains and what it will not contain. These arethe building blocks for the new layout.

Because cell definition is so crucial ro the remaining activities,planners should circulate it widely for commenr and input. In addition,decision-makers must approve itbefore space planning can go forward.

Cosmos cell and process definitionPart of the cell definition for cosmos Products is illustrated in figure3.22.The operational cells come directly from the focus study ofrask03.11. other cells are derived from the existing process .h"rt, and thephysical infrastructure checklist.

For example, SPU 01 is silk-screen operations. It includes silk-screen printing, drlang, baking, and humidifying and excludes screenpreparation and subsequent operations. The team created this sPU fromthe existing space diagram and also from the existing process chart.

Cell04 is post-screen operations. It includes thermal die-cutting,pick-and-peel, masking, labeling, inspection, and packaging. Th1existing space plan had no area with this label. This spu was derivedfrom the process charts and the strategy statement.

Figure 3.23 is the revised process sheet for cosmos's multi-colorcommercial family of products. comparing this illustrarion to figure


3.8 reveals that the value added index (VAI) has increased from 0.20 to

0.30. The number of elements has decreased from 78 to 50.

Improvements ofthis magnitude (30 to 50 percent) are not uncommonin layout-reengineering projects. The dotted envelopes in figure 3'23represent the cells where the process activities occur. Most of the

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process improvements at cosmos are from the elimination oftransport,storage' and delay elements, which are rendered unnecessary whenprocesses occur in the same location. This is the power of a product-focused space plan.

Materialflow analysisIn Task 03.12,the analyst uses information gathered earlier to calculatematerial flow berween each combination of SPU pairs. Additional datamay be needed for this calculation to establish the affinities associatedwith material flow. Figure 3.24 shows the procedure for this analysis.

In manufacturing, material flow is usually an important factor inlayout. For non-manufacturing space plans, material ho* -"y not berelevant, and this task probably will not apply. Berween the extremes,the relative importance of material flow for establishing affinities willvary considerably.

Material flowvalues are one of two inputs for affinitv develooment.As space plan design progresses and several options are underconsideration,the material flow analysis can assist in evaluating these options. Later,flow calculations provide a basis for handling tyri.- design.

From the P-Vsummary, process charrs and observaiion (Block 1)materials are classified into manageable groups (Block 2). Thisclassification assists in developing a common unit for measuring flow,the equivalent flow unit (EFU). A classification summary is one of thedeliverables for Task 03.72.

Usually these groups number less than twenty-five. They arebased on material-handling characteristics. strucrurai shapes might beone group in a metal-working factory. It would include steel andaluminum shapes that are ten to twenty feet in length. Another groupmight be small parts-items defined as less than four ounces "ttd l.ttthan three inches on any dimension.

In Block 3 of the procedure, planners choose an EFU. This is atwo-part measure: material-units per time-unit such as pailets per day(metalworking); cartons per hour (grocery distributionj; tor* p* d,iy(steel foundry); or totes per day (electronics).

When there is one type of material, this step is easy. Ituses thenormal unit such as tons or pieces. such situationr "r. rare, however.Most layouts deal with a wide range of material movement.

Materials also may change form. A sheet metal cabinet forcomputers begins as a flat sheet that is difficult to handle. cutting andforming increases the difficulry and bulk by an order of magnilude.Paint makes it delicate and susceptible to damage. packagiirg thenallows it to be nested and stacked, rendering it lesi delicate."


Figure 3.25 illustrates these changes in a quantified schematicflow diagram. The lines represent movement, and theirwidth representsthe flow rate in equivalent pallets per week. The flow rate in units perweek is constant throughout the process. However, the change in size,features, delicacy, and packaging changes the equivalent flow as itmoves from one ooeration to the next.

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Figure 3.24 -Task3.l2, Analyze Material Flow


The source of data is determined in Block 4 of Fig. 3.24. Forsimple flow situations, the P-v analysis and process charts provide allthe necessary information. In complex situations, the proiess chartsmay be too many or too complex; sometimes moves take place that arenot in the official process. These must be identified from other datasources such as the MRP database, material handling records, direct

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observation, or random sampling as outlined in Block 5.Block 6 marks the extraction of data. Again, for simple situations,

only the process charts and the P-V information are necessary. For each

move on the process chart, the planner determines if a similar move willexistwhen the new SPUs are used. He or she then determines the flow unitand the number of flow units per day required to meet the sales forecast.

Other data sources may need significant manipulation. Eachspace plan project is unique with respect to flow data. Experience andcommon sense are the main guides.

Block 7 formats the data, usually on a comPuter spreadsheet ordatabase. In Block 8, the flowis calibratedusingtheAEIOLIXconventions(see fig.2.9). This is done on a rankedbargraphwith the SPUpairs alongone axis and flowrates on the other. The rating shouldbe done manually.The affinity distribution in figure 2.10 should be used only as a guide,because other factors also are involved. For example, discontinuities inthe curve naturally divide one rating from another. A{finity pairs thathave zero flow between them get a "IJ" rating.

The procedure forTask03.12 is illustratedbythe Cosmos project.Based on the information from Block 1, the materialswere classified asfollows:

Log Ro llrThese vinyl stock rolls are 36 inches long and abott 12

inches in diameter. They weigh about 200 pounds.SIit Rolts-Vinyl stock rolls are rolls that have been slit and

rewound on smaller cores. They range from 6 to 20 inches in length andless than 5 inches in diameter. Weights are less than 40 pounds.

Roll PacLages-:fhese are packed roll products similar to cellophanetape or masking tape . The largest are about 5 inches in diameter and 4

inches in length. Most are much smaller.Sbeets-These large sheets ofvinyl stockor decal material,average24

inches by 60 inches and remain flat throughout the process and shipping.Packaged Sheerr-These are decal sheets packaged in corrugated

boxes. The boxes and packing significantly increase their volume butreduce the delicacy required in handling.

Much ofthe material handling in the plant is done using handcartswith four-wheel castors, so a handcartwas used as an EFU. This offeredseveral advantage s. It was easy to visualize the handcart being used forall materials and to develop conversion factors from that vision. In thenewlayout, handcarts undoubtedlywould remain the primarymeans ofmovement.

Table 3.1 is the output of Block 7 and the deliverable for Block 9on the procedure diagram. This table shows the material flow analysisfor Cosmos Products. The material classes are at the top left. Next to


EFU=Equivalent Hand CartsLog Rolls 0.500Sli t Rol ls 0.071Roll PackagesSheetsPackaged Sheets

(A) (B) (C) (D) (E) (F) (c) (H) fl) (J) (K) (D (M)Fwd Rev Tot Flo Flo Flol N_F N_F Tot Tot

From Units Units EFU EFUs Vow Num N-F Vow NumNum Vow-To Unirs /Day lDay Fact /Day Rtg Rtg Ratio Rtg Rtg Scr Rtg

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01-0201-04 SHTS01-05 SHTS01-08Q1-1201-1301-1401-1502-1103-04O3-05 SLITS03-0603-08 PKGS03-10 PMAT03-1203-1303-1403-1504-09 SHTSo4-1104-1204-'13o4-1404-1505-06 SLITS05-07 LOGS05-09 LOGS05-1305-1405-1507-10 LOGS07-1208-09 PKGS 2134.008-1208-1309-1009-1210-1411-1211-1312-13

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each class descriptor is the EFU conversion factor, which converts the

material unit into an EFU. Each conversion factor is the inverse of the

number of flow units that fit onto the cart. A cart usually carries nvo log

rolls, for example, so its conversion factor is 0.5. The SPU pairs are in

column A of table 3.1. Column B shows the flow units-slit rolls,

sheets, etc. Columns C and D indicate the flow rate.Paths should be specified using two numerical SPU identifiers. In the

Cosmos example, 03 refers to roll operations, and 06 refers to intermediate

storage. The flowpath between them is 03 to 06. To avoid duplication and

possible errors, planners should use only the forward path-the SPU with

the lowest number followed by each SPU numbered above it. Whenmaterial moves from a higher numbered SPU to a lower numbered SPU,it is called reverse flow. The total material flow is the sum of the forwardand reverse flows. Column F in the Cosmos model is the flow totalsmultiplied by the EFU factor. This result is the average flow rate in EFUs

per day. Column G shows the vowel rating for each flow path.Figure 3.26 shows the flow calibration for Cosmos Products. This

is Block 8 on the procedure chart and is typical ofa product focusedlayout. It has a small number of high flow rates and many SPU pairs

with zero flow. Process-focused layouts have a much broader distributionof flows commensurate with their complex natures.

0 3 > 0 8 0 B > 0 9 0 4 > 0 9 0 5 > 0 7 0 7 > 1 0 0 1 > 0 4 0 1 > 0 5 0 5 > 0 6 0 3 > 0 5 0 3 > r 0 0 5 > 0 9

From-To SPUS

Figure 3.25 - Moteriol Flow Colibrotion


I d e ntifyi n g non -fl ow affi n iti esMaterial flow is only one of many factors that give rise to affinities.other factors are intangible and more difficult to quantifr. Examples ofthese factors are: personal communication; the need to transferperionnelbetween cells or departments; movement to and from the cafeteria orrest rooms; quality feedback; joint teamwork communications; accessby outside visitorsl RF communications requirement; and other site-specific needs.

Figure 3 -27 shows a chart for recording non-flow affinities that arsomay be used to documenr flow affinitie, J, total affinities. Diagonalsrepresent each SPU. When they cross, they form a diamond. In the upperhalf of the diamond, the affiniry rating is recorded using the vowel or

Figure ?.27 - Affinity Chor-t


number scale shown in figure 2.9.The lower half of the diamond is the

place to record the primary factor(s) that gave rise to the affinity.These non-flow affinities are independent of material flow

requirements. The problem lies in capturing them. In Task 03.14 they

are merged with affinities for an overall or total affinity rating. A survey,

consensus meeting, or personal evaluation may also be used.A consensus meeting that assembles representatives from each

department or SPU is usually the best approach for accomplishing Task

03.13. The analyst acts as facilitator. Using the affinity chart of figure

3.27 ,he or she explains the need for affinity ratings, the chart, and the

desired distribution. The group considers each pair of SPUs, one at a

time, and discusses the relationships.Using the conventions in figure 2.9' they decide on a rating.

Initially, these discussions are rather long. After five to ten ratings,

however, the group will begin to agree readily. A scribe records the

ratings and keeps the group focused by displaying the current SPU pair

on cards. Frequently, corollaryissues arise' These mayresultin constraints

or even revisions of the SPU definition.Participants in a consensus meeting emerge feeling that theyhave

been part of the overall project. This is important. When they see how

their input led directly to a sPace plan, they will have increased

commitment to the space plans that finally emerge.Another method ofidentifying non-flow affinities involves sending

questionnaires to representatives in each department. The questionnaireasks them to list other departments, areas, and people that must be near

each other. The results are then assembled, interpreted, and ratings

developed using the scale and conventions in figure 2.9. This method

is effective for large projects with fifty or more SPUs and many

affinities. However, it does not allow the participants to develop a

common understanding through discussion. The participants may not

trust the judgment of the person who intelprets the surveys and

corollary issues may not be brought out.A third method is personal evaluation, which uses a single judge

to determine affinities. He or she must have intimate knowledge ofthe

operations. This often is the analyst, but he or she may also be a strong

leader, perhaps the plant manager or CEO. This is a quick method and

may be effective for small projects. This, however, does not buildconsensus and may be divisive. Corollary issues may remain hidden.

Merging affinitiesTwo sets ofaffinities nowexist. The developmentofflowaffinities used

a quantitative approach. Non-flow affinities by their nature preclude a


quantitative approach and were identified by a consensus or some othernon-quantitative approach. These must nowbe merged into a single setof affinities (fig.3.28). This is Task 03.14.

A spreadsheet created by hand or computer is usually the moststraightforward method of merging. Table i.2 is an extension of thespreadsheet in table 3.1. These columns are put in after columnsA through D.

Column E: Vowel Non-Flow Rating (Enter Manuallv)Column F: Numeric Non-Flow Rati"g (Enter tr,t""u"ity;Column G: FlodNon-Flow Ratio(Enter Manually)Column H: Merged Score: Col. Ax Col. F + Col. p x (f - Col. F)Column I: Merged Vowel Rating (Enter Manually)Planners should add rows for all remaining combinations of

SPUs, sort the rows in themerged score column (col. u) in descendingorder, and plot the merged scores on a ranked bar chart. From the chart.

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they should assign a merged vowel rating (Col. I).Deciding the relative importance of flow and non-flow factors

depends on the industry, process, and other influences. Heavyindustries

such as steel or shipbuilding warrant a flodnon-flow ratio up to 2.0.

Office areas and industries that depend heavily on personal contact mayhave ratios as low as 0.5.

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Figure 3.28 - Tosk 03.14, Merge Affinities


Generally, the same flodnon-flowratio should be used for all theaffinities on the space plan. Occasionally, however, specific affinitiesmay have to be modified for special circumstances.

Next, the total affinities must be rated. When assigning themerged vowel rating, the analyst should consider two factors. First, heor she should strive for a workable distribution of ratings similar tothose shown in figure 2.9,\n addition, a search for natural breaks ordiscontinuities in the distribution avoids having nearly identical scoreswith different ratings. Accuracy is not paramount in this process.

Developing a configuration diagramIn Task 03.15, merged ratings are used to develop a configurationdiagram. The configuration diagram is the firstofthe derived elements.It comes from cell definitions, affinities, and experience. The graphicswork may be done on a CAD system or other software. However,manual development is straightforward and often quicker.

To develop the affinitydiagram, the analystplaces the A affinitiesand their associated SPU symbols first, then adds the E affinities. Atthis point, rearranging the diagram is desirable. Next, the I affinities areadded and the diagram is rearranged again. He or she finishes with theO affinities, which usually will have little effect on the diagram..

Striving for short distances between the As and Es with minimalcrossing is a worthwhile goal. Multiple crossings might create trafficcongestion on the final space plan. Lower value affinities probably willhave longer distances. The high value A and E affinities will have shortdistances. Attempting to fit this diagram into a buiiding environment atthis point is not advised. some excellent arrangements maybe ovedooked.

Figure 3.29 illustrates the diagram developed for the Cosmosproject. Step 1 features the SPU symbols. Step 2 shows the A and Eaffinities in an undesirable arrangement. Step 3 shows the rearrangementof the A and E affinities and the addition of the I affinities. Anotherrearrangement is illustrated in Step 4. Finally, in Step 5, the affinities havebeen rearanged again, and the O af{inities added.

The Cosmos configuration diagram in figure 3.29 is only one ofmany possible diagrams that uses this combination of SPUs andaffinities. It can be mirrored or rotated. There may be other positionsfor the SPUs that give the same or better results. Some of thesevariations will fit the building be tter than others. However, it is best notto jump ahead and anticipate the shape ofthe building. It is worthwhileto ask several people to develop diagrams, thereby ensuring a wideselection of possibilities.


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Space calculationSpace is the third fundamental element of a space plan. It is a limitedresource; there is only so much space under a roof, on a site, or in adepartment. Whether the space is land on a site or space in a building,it is usually expensive

Although space is three-dimensional, most space plans ignorethe vertical dimension. This is acceptable in all but a few situations.

Most layouts attempt to optimize the use of space as well as itsarrangement. A complete space plan requires not only the location ofSPUs, but their size and shape as well. The space occupied by SPUsusually prevents the designer from honoring all affinities

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TABLE 3.3


simultaneously. Benveen them, itforces compromises above andbeyondthose arrived at in the configuration diagram. The space needs of SPUsmay distort even a neady perfect diagram.

Task03.16 calculates size ofthe required space for each SPU, usuallyin square feet or square meters. Calculation ofspace requirements uses oneor more of six methods. These methods are: elemental calculation. visuale s tima ting, transformation, space standards, proportioning, or ratioforecas ting.Table 3.3 shows Cosmos Products' space requirements and how theanalysts used several methods for the calculation.

Elementol colculotionThis method, illustrated in figure 3.30, starts at the most detailed level. Eachpiece of fumiture or equipment assigned to an SPU is measured. Thesedimensions are then added together for the total amount of space. Space foraisles, miscellaneous storage, or other needs are also induded in the sum. Thisadded space often is a percentage of the basic equipment space.

Elemental calculation is simple and straightforward. However, it hasits limitations. For one, it takes considerable time and effort. Uncertainforecasts can make it difficult to determine how much furniture orequipmentwilloccupythe space. Elementalestimatingis primarilya short-term methodology. Most industries use it for one to three years in thefuture. Beyond that, other methods are equally and perhaps more reliable .

Develop Equipmentlnformation

Capacity/Process/Sales lnformation

Figure ?,30 - Computing Spoce, Elementol Colculation

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Figure ?.34 - Computing Space, Proportioning


ProportioningCertain types ofspace calculation use proportions effectively. The spacefor a given SPU comes from the calculation of another space. Forexample, aisles mightbe apercentage ofproduction space, or conferenceroom space may be a portion of office space. Figure 3.34 illustrates.

Proportioning works well when the history to support it exists. Itusually applies to only a few types of space, however. Proportioningrequires little effort.

Ratio forecastingRatio forecasting uses historical trends to forecast space. In this method,business parameters and space are correlated over time. Such ratios maychange gradually over the years. The analyst then projects the trend of thisratio into future years and uses that projection to calculate space.

Ratio forecasting, which is based on historical data, is mostappropriate for long-term site plans. It has limited use for short-termspace calculations.

The space plan primitiveThe next step in the progression is the space plan primitive, which involvesadding space to the configuration diagram(s). The space requirementscome from the calculations and space summary(Task03.16). The CosmosProducts space plan primitive is illustrated in figure 3.35.

The space plan primitive begins with a configuration diagram.Using an appropriate scale, designers place a square or rectangle withthe SPUs calculated area near each SPU symbol. In step 2, designerseither move each space blockunderneath the SPU symbol or move theSPU symbol over each space block. As the space plan primitivedevelops, itwill have to be stretched to accommodate the space withoutoverlaps. The result should be a compact arrangement that honors theaffinities as closely as possible. Although designers should beginanticipating a building shape at this time, they should not strive for afinal layout.

ConstraintsMany factors that affect a macro-layout do not fit the concepts of SPUs,space, and affinities. These are constraints. Some examples are:

. Column spacing of 32 feet restricts the placement of aislesand some equipment.

' High electrical load restricts the placement of heat treatovens to certain areas with adequate electrical service.

. A cold climate dictates that dock doors should not have


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northern exposure.' zoning requirements specify that docks not face the street;' floor loading restricts the placement of certain equipment;' explosion hazard dictates that ahazatdous chemical room

have an explosion vent on an outside wall; and' the company president requests a window for his office'

A form for identif ing constraints (Task 03.19) is shown in figure 3.36.

The SPUs are listed on the left and across the toP' major categories are

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identified. These include : site conditions, utilities, handling methods,personnel, procedures and controls, shape rario, and oihers. Theaccumulated project documentation for each spu and category arereviewed, and the constraints are listed. A bullet or check associateseach constraint with a particular sPU. some constraints apply to allSPUs. In this situation the bullet goes in rhe "general" rtw. Thefollowing is a description of Cosmos Products .orrftrairrts:

Aestheticy'The nafure of cosmos products is artistic. Therefore,the aesthetics of the building and surroundings is important. cosmoswants to present itself well to customers and other visitors. A pleasantsurrounding will help aftract the best commercial artists. The aestheticsissue applies to shipping and receiving areas, which are often unsightly. Italso applies to the artwork, administration, and employee service"areas.

TruckAccess-This is another site condition. Trucks need accessto both shipping and receiving. cosmos is fortunate in this respect. Thesite has good access on both the north and south sides.

Forkrrucks--Handling in some areas uses forklift trucks. Adequateaisle widths on the main aisles and selected departrnental aisles are necessaq/.

c ar t s-s mall carts convey materials in many areas. Here, narroweraisles will suffice.

EasyAccess-This is a personnel issue. Administration, employeeservice s, and maintenance all require easyand inviting access forpeople.

Press Lines-Aspect ratio refers to the relative length and widtl ofSPUs. Silk-screen printing operations require a mini*mum lenqth toaccommodate the long press lines.

Utilitier-Certain sPUs require water, sewer, and air conditioning.Next, this constraint summary and the space plan primitive will be

used to prepare space plan options.

Designing macro-space-plans

]h9.space plan primitive now must fit into a building outline. Thebuilding may exist or it may be a proposed strucrure.

_ Preparing space plan options begins with overlaying the building

:":]tl. with a space plan primitive. The space blocks are shaped to fiibuilding walls, columns, and other featur.r. Th" constraints ,r.--uryshould be consulted during the placement of each SpU.

_ F or each space plan primitive, there probablywill be several viablelayouts. All variations of the primitives, including mirror images androtations, should be examined.

I_t may be difficult to match space, honor constraints, and designan orderly arrangement. In general, designers should strive for clean,rectangular areas. space requirements may have to be compromised.


The original space calculations are usually flexible within a reasonable

range-10 to 20 percent.One ofthe macro-space-plan options (Option 1) from the Cosmos

project is illustrated in figure 3.37. This option is based on the

operations strategy, which called for a product-focused space plan using

cellular manufacturing techniques and focused factories.The soace between the two original buildinqs is now enclosed to

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improved material flow between the buildings and to the shipping andreceiving docks. Each of the old buildings has becom. u ,.-ilfoi,rr.df?,:oty,with roll products on the left and commerciar products on theright. In the center are slit-and-sheet operations, -hi.h serve bothfocused factories. service facilities such as quality assurance, employeeservices, and maintenance are also in u i.ntr"l location. Ariwork,administration, and employee services face the street. This satisfies theaesthetic constraints.

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Some Cosmos managers had reservations about the product-

focused strategy adopted in Task 03.10. Therefore, an additional

macro-space-plan based on continuing the process-focused approach'n", pr.p"..d. The resultwas O ption2 (fig. 3.38), which mitigated their

.orri.rnr and demonstrated the relative advantages and disadvantages

of process and product focus. It was prepared as a second, parallel

proJect starting from Task03. 10. The process-focused strategy statement

produced a different set of sPUs, affinities, and space requirements.

Option 2 retains the aisle system and many of the good features

of Ontion 1. Functional and semi-functional areas such as shipping,

receiving, and artwork have many of the same characteristics. They are

often in the same location. Some functional SPUs such as storage areas

need significantly more space. Process areas change their names,

characters, space requirements, and other characteristics. Option 2

needs about 10 percent more space than option 1. This additional

space is in a building expansion on the east side.

For most macro-space-planning projects, there will be three to six

fundamentally different options and several variations. using the

existing layout-or simply doing nothing*is always an option' Even

when the existing space plan is no longer viable, it makes a convenient

baseline forgauging improvement. The Cosmos project team developed

several other options, which are not included in this book.

AislesAisles present special problems. They should be straight and wide

.r,o.rgh fot two-way traffic. Usually, the best approach identifies main

aisles as a separate SPU. Designers then place them on the macro-

space-plan. Departmental aisles, on the other hand, are within the

space calculations for each SPU. Aisles adjacent to walls are often

undesirable because they serve only one side.An alternate approach includes all aisles as Part of the SPUs'

Designers then place sPUs on the plan, recognizing that those main

aisles generally will follow the SPU boundaries.

ihe straightforward Cosmos space plans in figures 3.37 and3'38

use the first method. Main aisles have a separate calculation and every

SPU is adjacent to a main aisle. A central loop allows continuous traffic

in both directions. A single dead-end aisle serves screen prep and part

of the silk-screening operation. This aisle system will allow subsequent

layout changes without disturbing the basic flow pattern.

ldentifying key material handling issuesMaterial handling and layout are intertwined. The best handling


system depends on the space plan and the best space plan may dependon handiing methods. often, a layout that does notworkwitir manualhandling becomes viable with automated or conveyorized handling.

This presents a chicken-or-the-egg problem. Are handlingequipment and containers selected before the rayout? Is the layoutdesigned first and the handling system then serected? usually, the bestapproach is to design the layout assuming conventionai p"rh"p,manual handling. This optimizes material flow and often eliminatesthe need for complex and expensive handling systems.

. lowever, particular handling issues that drasticaly affect spaceplan selection must be identified. For example, a pneumatic transportsystem has different requirements than a system that uses forktrucksfor conveying bulk material. one space plan might be the best for forktruck handling, while another might be best fotih. prr..r-atic system.

A space plan should be designed and selected bifore the handlingsystem is finalized. To do this, however, may mean assuming a generaltlpe of handling system prior to layout design.

To accomplish Task03.20, examine."ih ofthe proposed layoutoptions and ask the following questions:

. What types of handling systems are viable for each option?

. Would a particular handling system affect one layout optionmore than another?

. Would a different handling system allow new layout options ?

, lf aparticular handling system affects all layout opiior^ equally,selection ofthat system is not a key issue. In such a case, the evaluationofthe options is the next step in the space plan. Ifa particular handlingsystem would give one option a significant advantage over the others,such selection is a key issue. In such a case, furthir investigation isrecommended, perhaps accompanied by a preliminary design and costestimate for the handling system. This approach allows -"rr"g.rrrerrtto select the best layout at the macro-levelwithout completely deiigninghandling systems for all the options.

Deciding on the best space planSeveral vi-abfe options now exist for the macro-space-plan. Manyothers probably have already been screened out during ."ili", parts ofthe design process. The designer should narrow the choice to ihr.. tosix significantly diffe rent options. Each option may have several minorvariations. Management and others involved in the project then decidewhich to use. This is done for several reasons:

' management often criticizes the engineering staff for tunnelvision. Engineers may lock onto an idea early in a project. A


wide varietyofoptions shows that the designer or design team

has considered a wide range of possibilities;' asking for a selection from among options is usually more

palatable than asking for approval ofa preordained design;. the process of decision-making builds consensus' suPPort'

andionfidence. This Prevents later attemPts at redesign by

those who felt left out of the processl and' the decision process may Senerate hybrid plans, which are

often superior to the original designs.Figure 3.39 shows the procedure for evaluation. The space plan

options are the "input" listed in Block 1. Block2 assembles a decision team.

In Block 4, the team reviews the project's original objectives-

These original objectives may be specific, directly measurable, and

SpacePlan AmFigure 3.39 - Computing Space, Visual Estimotion


applicable to the evaluation, or they may be global and difficult tomeasure. They may require sub-objectives for a good evaluation. Theinformation developed during information gathering may have modifi edthe objectives. The debates during the strategy development also mayhave changed objectives. The decision team adopts the originalobjectivesor revises them as appropriate.

Flowing from the objectives are decision criteria. These are factorsthat the team can evaluate directly-either qualitatively or quantitatively.They are the basis for the decision. Examples of decision factors are:material handling savings, improved communication, OSHAcompliance, improved teamwork, initial cost, operating cost, qualityenhancement, improved delivery reliabiliry, improved delivery speed,and ability to use a particular technology.

A decision criterion may be a decider or a qualifier. Qralifiers aregolno-go criteria: a space plan meets the minimum requirements ornot. Performance beyond the minimum creates no additional benefits.Performance below the minimum disqualifies the space plan fromconsideration. For example, OSHA compliance might be a qualifier.Layouts that meet the requirements are acceptable. Layouts that gobeyond OSHA requirements bring no perceived additional benefit.

Deciders bring additional benefits for each increment ofperformance . Improved cost, for example, is usually a decider. OptionB mayhave an operating cost advantage over Option A. Although bothspace plans meet the budgeted cost improvement objectives, Option Bis the preferred space plan on that dimension.

Block 3 contains the tools for evaluation. In addition to macro-space-planning, these tools apply to other levels of facility planning.Among the common tools for evaluation are: material flow analysis(MFA), financial analysis, ranking, instinct, positive-negative-interesting (PNI), decision tree analysis, and weighted factor analysis.

MFA examines the large-scale material movement between SPUs.It develops a measure of associated cost and difficulty. Improvedcommunication and coordination are corollary benefits of improvedmaterial flow. Specific techniques in this category include transportwork, flow diagrams, and D-F plots. For the most part, these arequantitative methods.

Financial analysisincludes cost estimating, return on investment(ROI), and payback. These methods are quantitativel however, theyoften involve qualitative judgments as well.

A simple ranhing, from most preferred to least preferred, is oftenan effective tool. The ranking can use qualitative factors, quantitativefactors. or both.


The gut-level reaction or instinct of knowledgeable people hasvalue. Although it should rarely be used as a primary evaluation tool, itmay uncover unseen opportunities or problems.

PNI analysis is a variation of the brainstorming technique. Itexamines each space plan factor, focusing first on the positive featuresand then on negative features. Finally, it focuses on those that areneither positive or negative-things that are interesting or unique. Thisanalysis, was developed by Edward DeBono, an expert on thinkingprocesses. It is simple but effective. It often brings out hidden featuresand builds teamwork and consensus.

Decision tree analysis is useful when a series of probable events canaffect the decision. For example, which space plan is best if a particularcontract is won and, afterward, the overall market contracts? It helpsevaluate the cumulative probabilityofeach ofthe four possible outcomes.Combined with financial analysis, it is a quantitative tool.

Weigbtedfactor analysis bases a decision on a combination of thevarious factors, both qualitative and quantitative. It is best ifthe factorsare indepe ndent, but this is not always possible. Some compromising ofthis principle is acceptable. Judges first identi$, the factors, then decidea weight for each, and, lastly, rate each option.

In addition to the tangible and intangible categories, straregicissues may arise. These are usually qualitative. The consequences ofstrategic issues are often so far-reaching and so important theyovershadow all other factors. For example, Option A might use a newtechnologv. This technology shows no immediate cost benefit yet theintroduction potentially could revolutionize the industry and place afirm far ahead ofothers. Should Option A be selected? This is a decisionfor top managers and cannot be made lightly.

In weighted factor analysis, the judges that weigh the factors maybe different from those who rate the options. For example, topmanagement may weigh the factors but leave ratings to specialists oroperating people.

In physics, Heisenberg's uncertainty principle states that both theposition and state of certain sub-atomic particles cannot be known.Thit ir because the process of measurem.rri dirtort, either the positionor state. A parallel phenomenon occurs in space planning. The processofjudging and evaluation often leads to other options. Thus, some orall of the space plans may change as a result of the evaluation process.Or, a hybrid space plan that features the best parts of several originaloptions may emerge.

Block 5 of the procedure diagram examines the decision criteriaand available tools. Two to four tools appropriate for the evaluation


should be selected.Block 6 evaluates all options with respect to the identified

qualifiers. Any option that fails to meet a qualiS'ing criterion dropsfrom consideration.

Block 7 evaluates the options with respect to the decider criteria.New or hybrid options go on the list of available options.

After evaluation, one option is selected for development. Adecision summary recapping the decision process should be prepared.The summary and decision make up Block 10.

Evaluating the Cosmos space plansThe Cosmos design team and steering committee met to evaluate theproposed space plans. They decided that both the steering commitreeand design team should participate in the evaluation. They firstreviewed the original project objectives. These came from Task 03.01,"Plan Project":

' reduce material handling cost;. reduce operating costs;. deliver project under budget of$800,000;' improve delivery performancel. improve teamwork, communication, and quality;' allow for new products; and' accommodate 1998 production.

From the original objectives, they derived these decision criteria:D Material flowD Direct operating costqD Initial costD DeliveryD CommunicationD TeamworkD QralityD New product adaptability

a_ Meets 1998 production requirementa_ OSHA/EPA Compliance

A "Q notation designates the qualifiers. OSHA,/EPA complianceis necessary for any space plan. Those that fail to meet this qualificationare no longer considered. Similarly, the 1998 production requirementis a qualifier. Initial cost is both a decider and qualifier. A space planmust meet the $800,000 budget limitation to be considered; this is thequalification. Initial costbelow $800,000 is a benefit; this is the decider.All the other criteria are deciders, denoted by a "D."

100 Faci l i t iesPlanning

The Cosmos team chose PNI, MFA, cost estimating, payback,and weighted factor analysis as the tools for evaluation.

They analyzed materialflowfirst andthen used the results to assistwith the cost estimating. In Step 1 ofthe MFA, they developed the flowdiagrams illustrated in figure 3.40.

These diagrams show where the flow complexity for the existing

Opr lon # I IProduclrFocused SpacePldn

Opt lon #3Ex is t lng Lagou l

Figure 3,40 - Moteriol Flow Evaluotion


layout is greatest. Option 2, a revised functional layout, improves the flowcomplexity and shortens flow distance. Option 1 improves complexity andfirther shortens the total distance. The flow complexity index (FCI) countsthe frequency of flow crossings on the diagram. Option t has an index of0, Option 2 has an FCI of 4, and Option 3 has an FCI of 6. Visualexamination of these material flow charts confirms the increasing materialflow complexity from Option 1 through Option 3.

Transportwork is the summation ofeach flow distance multipliedby the flow rate. The units for Cosmos are EFUs per day. Table 3.4 isthe spreadsheet used by the team to calculate distance and transport

1 0 1

= H EF =

= fr'r3E BEs ilFETSE

EE5E

6

D

0

F

Eo o

L

E l l

3 3 E fo l L

@ o) (o ro l-- o)F ro( f ) ( f ) OO)

F\ LO st OJ O)

l ' - T . O O O l r ) O C 9 $ O ) @ No) t) g? c0 !9 9.f 90 r-. to

S 5 ' O 9 f P P 9 > R S P

5 = 5 = 3 ad S o o e r > d g o c i d

q F e q K E c S E r eq ) O @ s t O O ( o O O C D $@ $ c v ) $ N c t

N C !

( . / ) V)@ lDa= 3 = 9 - 3 3 i . 8 9a < o < n o - N ( o s N O J o _

Fr= f l=Y?QPiE6 - a d Y - f 6 ' a = 3 & 5

^ aY 'o -

. = = d ) : : . ! l '> = i s-?r-!

- . ^ . ^ Q c . T c D * o q >

x .= 6_ 6_ X h : i > '= q o )d6666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666666d(,d00&.6c&.666

a a - - a l i .* = z z c i X . = . = . E S r n( n @ c ' E E ( J O _ A A ( n E _

s | r ) r o @ o o ) ( o r ' - o ) o o )

= = c b c b P + L i , 6 t o t r c b

t€o)

@No

CD

o

C)

TABLE 3.4

102 Faci l i t iesPlanning

work for Option 1. The other options have similar spreadsheets. Thethree options have transport wo rk of 9,647, 78,669, and 28,t31 EFU-feet per day respectively.

Another measure of material flow is the frequency count formaterial moves. Option t has 11 internal moves, Option 2has L4, andOption 3has 2I. The total distance traveled for the two representativeproducts is another measure. Options 1 through 3 have distances ofL,026, 7,723, and 2,735 feet, respectively. The average number of tripsper day is 119, 732, and !98.

This analysis assumes that all trips use the EFU, an equivalenthandcart, as the means. When implemented, the layout actuallywill useseveral methods of handling. However, for estimating, the EF"[Jassumption is a reasonable approximation.

Figure 3.41 is agraphic displayofthe MFAresults. Based on everymaterial flow measure, Option f. is significantly better than Option 2.Option 2 is significantly better than Option 3.

Financial analysisTable 3.5 summarizes the financial results for the three options. Option3-the existing layout-maintains the status quo. For this reason, thereis no change in either savings or costs. Option 3 thus provides thebaseline for the financial analysis.

2 5C0

2.CC0

1 500

1,000

500

0

7A

60

50

40

30

2A

1 0

0

IW(Fl EFU/Davr1000) 2 n 1 3 1

, 7 2 3Ir ps/Davf u l r o 132^nnua Cos l 1$) 63 957FLI^ I UO 4 0 0 600

Figure 3.41 - Msteriol Hondling Summory

TheMacro-Space-Plan 103

The center building is the new construction between the twoexisting buildings. The team estimated the cost at $35 per square foot.The east extension for Option 2 will cost about $30 per square footbecause it does not have loading docks.

Option 2 wlll need new equipment, valued at about $23,000,which will cost $21,000 for installation. Option 3 requires moreequipment because of its cellular nature. Rearrangement costs are$45,000 and $28,000, respectively, for Options 1 and 2.

The cellular approach of Option l will require significant trainingand additional consulting fees when compared to Option 2. The teamalso anticipated a more difficult start-up.

A contingency of 15 percent that allows for unplanned costs isapplied to the implementation ofboth newoprions. Either Option 1 or

Init ialCash OutflowsDescription

Center BuildingEast ExtensionEquipmentInstallationRearrangementTrainingConsultingStartupContingencies

Total

Annual InflowsDescription

Increased SalesMaterial HandlingDirect LaborOther lndirectWorking CapitalOuality

Total

Init ial InflowInventory

Years-To-Payout

Option 1Amount

$161,000$0

$176,000$49,500$45,000$32,000$43,500$100,000$91,050

$698,050

$750,000$22,885

$132,000$75,000

$140,000$230,000

$1,349,885

$1,750,000

0.23

Option 2Amount

$161,000$307,800

$23,000$7,800

$28,000$0

$20,000$45,000$88,890

$681,490

Option 2Amount

$750,000q E F F A

$10,000$37,500

$0$20,000

$826,058

$0

0.82

Option 3Amount

$0$0$0$0$0$0$0$0$0$0

$0$0$0s0$0$0

$0

$0

nla

Option 1Amount

Option 3Amount

TABLE 3.5


Option 2 will bring increased sales and production. The net profit forthis is estimated at $750,000.

Material handling savings come from the decrease in handlingand transport work. Using the data from the material flow analysis, theteam estimated cost savin gs of fi22,885 per year for Option 1 and $ 8,55 8dollars peryear for Option2. This assumes four minutes ofloading andunloading for each trip. It assumes an average transport speed of 150feet per minute and an $18.50 hourly labor cost. It also assumes thateach move has an empty return trip.

Calculations for direct labor, quality, and other indirect laborsavings are less rigorous, but the team developed conservative estimatesfrom their experiences.

Option t has a significant inventory reduction of ff7.75 million.This is a one-time savings and lessens the working capital required. Theinterest on this, at 8 percent, amounts to $140,000 per year.

The payout for Option 1 is 0.23 years. The payout for option 2 is0.82 years. Both payouts are quick. There is no payout for Option 3because there is no initial investment.

An ROI analysis would be more rigorous than the payout method.However, the fast paybacks for Options 1 and 2 indicate that the increasedcomplexity and effort required for an ROI analysis is unnecessary.

The team reviewed the decision criteria to see if the options metall qualifiers. All three options met the regulatory qualifiers. All threeoptions met the budgetary qualifier. Only Options 1 and 2 will satisfr1998 production requirements. This signifies that doing nothing,Option 3, is not a viable course of action. Option 3, however, has beenuseful as a baseline for improvement estimates.

Po s iti ve - n e g ative - i nte re sti n gHaving completed the quantitative analyses, the evaluation group thenrurned to PNI analysis. Meetingwith a facilitator, theyfocused on eachoption and each aspect in turn. They used brainstorming techniques todevelop the positive, negative, and interesting points for each option.The results are in table 3.6.

Weighted factor analysisWith the quantitative and qualitative analysis complete, the teamrurned to weighted factor analysis, where analysis and opinion aremerged into a single decision.

Figure 3.42 summarizes the weighted factor results. The teamfirst reviewed each factor and confirmed the definition. Throughdiscussion, the members reached a consensus on the weights. Each

TheMacro-Space-Plan 105

factor had a weight between one and ten.Operating cost, quality, and delivery received high weights (ten

and nine). These factors have the most direct effect in the marketplace.The group believed they had the highest strategic importance.

Material flow, communication, and teamwork received weights inthe seven to eight range. These factors are somewhatrelated. Good material

Option 1Positive

Best Material HandlingSimpli f icat ionNeat & Clean GeometryLess InventoryBetter TeamworkFitsW/TOMFaster ThroughputF a c t a r R a c n n n c a

Less SpaceLess CostFaster PayoutBest Annual CostEasier SupervisionEmployee InvolvementNice Aisle SystemUses Current Software

w/Kanban Production Control

Option IPositive

Reduced Material HandlingNice Aisle SystemNeat & Clean GeometryEasy Personal AdjustmentLots of Space

PNlAnalysis Summary

Option 2Negative

Option 3Interesting

Option 3Interesting

Allows CellularTransit ion Later

Low RiskHigh CostAllows Cellular

ProcrastinationNo Throughput

lmprovementMore Space RequiredLower PayoutHigher Annual CostI a q c F m n l n r r o o

InvolvementDoes Not Assit TOMLess Teamwork

TABLE 3,6

High Training RequiredIt Might Not WorkDiff icult AdjustmentHigher Risk

1 0 6 Facilities Planning

flow improves communication and simplifies operations. It also reducesinterdepartmental problems. Better flow and better communication enhanceteamwork. Material flow also ties to operating cost.

The team then examined material flow and compared the threeoptions. With quantitative data from the MFA, they quickly achievedconsensus on the ratings. Option 1 received an A for material flow,

WeightedFactor

Analysis

t'oj""t' fAcitir^/ Re-euaiueeeiu'

\ i t :lEol

cost't6?eoDucrSAy:

AL ef rzlqt,{ore: cottBliueD acoaEa

to FactorOplion t1 Opl ion l2 Option 13 Option al Oplion 15

F l tl.ATEAJALFLOW g, A 32 I 24 u o

f2 l0tlrluNicA.TioN ) 1 4 o 7 u o

F3 TeAt'twoeK 7 A zt u o u o

F) NEW "?ODUCTE 2 o 2 e 6 e 6

F4 rNiTlrX- 167 3 1 2 e s A 1 2

rs >ieecT o?ee-c61 1 0 E 3o 20 u o

i6 AU/XLiTY s A 3 6 1 g u o

t 7 >€tM€EV l o A 4o o 1 0 u o

Totals 1q4 s4 r (

* Option Descriplion

I CELLUIJAQ2

3FUNCTlON/ltEKST1N6

4

iltnAF€,)f.TAYLO?

H,FOAD

Figure 3.42 - Weighted Foctor Anolysis

The Macro-Space-Plan 1O7

Option 2 received an I, and Option 3, the baseline, received a U. Theteam repeated this process for the other factors.

Delivery had some quantitative basis. The number and length ofmoves from the MFA indicated that delivery would improve underOption 3, whereas delivery perhaps would see slight improvementunder Option 2.

Qrality, new products, teamwork, and communication had noquantitative analysis. Nevertheless, discussion and a review of the PNIanalysis brought a consensus among the team members.

They then multiplied each factor weight by each raring andtotaled the score for each option. Option 1 received 194 points, Option2 received 94 points, and Option 3 received 18 points. From thosescores, the group concluded that Option 1 was best by alarge margin.

The team could have begun the weighted factor analysis byweighing each factor individually and rating each option. They couldthen average and compare their results as a basis for discussion. This isa useful technique when it appears that individuals have widely differingviews. Several computer programs are available for this type of multilfactor decision making, but the most important results derive from thediscussions. In most situations, a manual compilation like that in figure3.42 rs sufficient.

ConclusionThis completes the discussion of macro-space-planning. Many of themethods apply to other levels of space plan design. Material flowanalysis, for example, is an important tool for Level 2, "Site Planning."Weighted factor analysis applies at all levels.

For most facility planning, the macro-space-plan is the mostimportant planning level. It is where strateg.y is defined and the firststeps toward implementation are taken. It is the level that usually hasthe greatest impact on a firm's competitive position. For these reasonsit has been the sublect of the most subsrantial discussion in this book.

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