Layout Strategy

Importance of LayoutThe objective of the layout design is to help

the firm meet its competitive requirementsLayout design must achieve:

1. Higher utilization of space2. Improved flow of information and inputs3. Increased employee morale and safer

working conditions4. Improved customer interaction5. Flexibility

Types of LayoutLayout includes the placement of desks,

machines, offices, or service centersFlow of the inputs and information should be

facilitatedSeven Approaches:

Office Layout Retail Layout

Warehouse Layout Fixed Position Layout

Process Oriented Layout Work-Cell Layout

Product Oriented Layout

Office LayoutComfort and safety are common

requirements that should be met in all layoutsFlow of information is an additional

requirement in the office layoutEven with the technological advancements,

hard copies still existTechnological advancements do provide

flexibility in the office layout

Office LayoutCubicles depend on teamwork, status,

authority, and conditionsOffice layout is part art and part scienceAn office relationship chart is useful to

organize an office layout

Retail LayoutThe more you see, the more you buyObjective: To maximize profitability per

square foot of floor spaceConsiderations while making retail layout:1. Locate the high draw items in the outskirts

of the store. Ex. Bread and Milk2. Use prominent locations for high impulse

and high margin items.

Retail Layout3. Items that are the purpose of the visit, power

items, should be distributed and spread out in the aisles

4. Strategically use end of aisle; extremely high exposure

5. Mission of the store should be in the two ends, where the customer prominently see

Slotting Fees

Retail LayoutServicescapes1. Ambient conditions2. Spatial layout and functionality3. Signs, symbols, and artifacts

Warehouse LayoutObjectives:

To find the best trade-off between handling costs and warehouse cost

Handling Costs: Costs related to the incoming transport, storage, and outgoing transport of materials to be warehoused. Also includes equipment, people, material, supervision, insurance, and depreciation

Minimize damage and spoilage

Warehouse LayoutASRS: Automated Storage and Retrieval

SystemsCan improve productivity by 500%

Cross Docking: Avoids unnecessary storage costs by processing inventory as soon as it comes inMust have tight scheduling and accurate

inbound product identificationRandom Stocking: Putting stock in any open

location in the warehouse

Warehouse LayoutAIS: Automatic Identification SystemsSKU: Stock Keeping UnitsComputerized random stocking systems include the

following tasks:1. Maintain list of open locations2. Maintain records of inventory and their locations3. Sequence items to minimize travel time4. Combine orders to optimize time5. Make classes according to usage to minimize travel

time Customizing: Adding value to the product while its

at the warehouse

Fixed Position LayoutThe product (or project) remains in one

“fixed” place while the workers and equipment build it the same area

Difficulties:Lack of spaceMaterial requirement variationDynamic volume of materials

Therefore, trend towards modules

Process Oriented LayoutUsed for low volume high variety production,

machines and labor placed together in job shopsAdvantages:

FlexibilityBreakdown of machine does not stop processGood for manufacturing in small batches

Costs are a function of:1. The number of loads to be moved between each

department2. The distance related costs of moving loads

between departments

Process Oriented LayoutSoftware for Process Oriented Layout:

CRAFT: Computer Relative Allocation of Facilities Technique

ALDEP: Automated Layout Design ProgramCOPELAP: Computerized Relationship Layout

PlanningFactory Flow

Work CellsMachines and personnel are arranged in a

manner that focuses on making a single product or related products

High level of communication and understanding of different cells

Widely used in manufacturing

Product Oriented LayoutFabrication Line: Machines are building

componentsAssembly Line: Fabricated parts are put

together at a series of workstationsAssembly Line BalancingDisassembly lines