Facility Layout
Ops Strategy Framework
Cost
Competitive Priorities
Market Requirements
Quality
Operations Strategy
Speed
Dependability
Flexibility
Process Facilities Sourcin Human Organization Production
technology g resources structure and planning
control and control
Structural Infrastructural
Decision Areas
OPERATION STRATEGY MATRIX
Facility Layout
• Layout decides the placement of
departments, workstations, workgroups
within the operation system to achieve
some goals:
– Minimize transportation costs, movement
– Minimize labor costs
– Increase throughput
4 Types of Layouts
• Process layout
• Product layout
• Cell
• Fixed position layout
Product Layout
• Equipment of work processes are
arranged according to progressive steps
by which the product is made.
• Suitable for High Volume Low Product
Variety situations.
TI Watch Cost Structure -1976
• Manufacturer Selling Price : $13.5
Integrated Circuits………$.3.25
LED……………………….$2.0
Quartz Crystal……………$1.0
Batteries…………………..$1.25
Other Assembly Parts……$1.5
Others and Overheads…..$0.25
Assembly Labor…………..$0.75
Contribution……………….$3.5
TI Watch 1780 (after 4 years)
• Manufacturer Selling Price : $7.5
Integrated Circuits………$1.5
LED……………………….$0.75
Quartz Crystal……………$0.50
Batteries…………………..$1.25
Other Assembly Parts……$0.75
Others and Overheads…..$0.25
Assembly Labor…………..$1.25
Contribution……………….$1.25
• There was only a little discussion. A little
discussion of batch production. Assembly
line was the only way we were aware of to
build them cost effectively. You just do not
do anything cost effectively in these
volumes in a batch mode.
– Peter Bradley- Operations Head , Texas
Instruments was instrumental in designing
calculator and watch assembly lines.
Case Study- Nova Cruz Company
• Manufacturer of Xootr- kick scooter.
• Xootr is the Rolls Royce of scooters- Time
The Xootr by Novacruz
Components Finished Xootrs
Activity 1 Activity 2 Activity 3
Current layout
Worker 1 Prepare cable 30
Move cable 25 Assemble brake lever
Assemble Washer 100 Worker 2 and cable 110
Apply fork,threading cable end 66
Trim and cap cable 59
Assemble socket head screws 114
Steer pin nut 49 Place first rib 33
Brake shoe,spring,pivot bolt 66 Insert axles and cleats 96
Insert front wheel 100 Insert rear wheel 135
Insert axle bolt 30 Place second rib and
Tighten axle bolt 43 deck 84
Tighten brake pivot bolt 51 Apply grip tape 56
Assemble handle cap 118 Insert deck fasteners 75
1 Total 648 10.8
3
.
Total 792 2
Worker 3 Inspect and wipe off 95
Apply decal and sticker 20
Insert in bag 43
Assemble carton 114
Insert Xootr and manual 94
Seal Carton 84
Total 450 7.5
Conveyor Belt
Components Finished Xootrs
Activity 1 Activity 2 Activity 3
A machine paced process lay-out (Note:
conveyor belt is only shown for illustration)
Weekly 1400
demand
1200
1000
800
600
400
200
June
July
April
May
March
August
October
January
November
December
September
demand trajectory for Xooters
Strategy to meet the demand
• Chase Strategy – produce as per the
demand
• Level Strategy – stationary production –
builds inventory during lean period
• Company decided to chose level strategy.
Line Balancing
• Method to develop a better product layout.
• Assign tasks to a series of workstations
such that
– Total production time at each workstation is
less than the desired cycle time.
– Idle time at each workstation is minimized
• Activity time at Stage 1 : 13.2 min
• Capacity at station 1 =
• 1/ activity time at stage 1 * time adjustment
• = (1/ 13.2) * 60 = 4.54 Xootrs per hour
• Compute capacities at stage 2 and 3 ?
• Activity times are 10.8 and 7.5 minutes.
• What is the process capacity ?
• = Min ( stage 1, stage 2 and stage 3
capacity)
• = min (4.5, 5,5, 8 ) = 4.5 Xootrs per hour.
• What would be cycle time of the process ?
• It would be the time required at the bottleneck.
• Utilization of a stage =
• activity time at stage / activity time at bottleneck
• Utilization at stage 1 = 13.2/ 13.2 = 100 %
Computing labor costs per Xootr
• Per hour how much labor cost is incurred ?
• How much Xootrs are produced per hour ?
• labor cost per worker per hour is 12 dollars.
• = 12 dollars per hour per worker X 3 worker
• = 36 dollars
• Throughput per hour = 4.54 Xootrs
• Labor cost per Xootr = 36/4.54 = 7.92
Analysis
• See excel document for analysis.
Another Method
• Determine workstation time:
production time per week
output per week
35 60
3 min 180 sec
700
• Compute theoretical number of
workstations required
sum of task times
work station cycle time
1890
10.5 ~ 11 workstations
180
• Assign tasks such that total task time at
the workstation is less than workstation
cycle time.
• Compute efficiency of the line
• = total task time
actual work station no x workstatio n cycle time
1890
87.5 %
12 180
Comparison of different
approaches
Method Capacity Labor cost per unit
Single long Line 756 6.654
4 Balanced Lines 759 6.65
Work Cell 800 6.3
What issues needs to be
handled
• Which approach will require higher investment in
machines ?
• Which approach will require skilled labor ?
• How is relationship between management and
labor
• Which approach provides more flexibility in
meeting demand variations ?
Improving line performance
• Splitting the longest tasks.
• Sharing tasks by adjacent workers.
• Use parallel workstations.
• Use more skilled worker.
Flexible and U Shaped Lines
• U shaped layouts provide more flexibility
while assigning tasks to workers.
•
• Travel time issues can be handled.
Mixed Model Line Balancing
• Scheduling different products over a given day in cyclic fashion to
meet the demand.
• 6 minutes are required to produce model ‘J’ and 4 minutes are
required to produce model ‘K’. Objective is to produce 48J and 48 K
over a day. Eight hours per day are available.
• Model sequence JJ KKK JJ JJ KKK
• Operation time 66 444 66 66 444
• Total time to complete the sequence : 60 min.
• Another Sequence: J K K J K J
• Total time to complete this sequence= 30 min
Group Technology
• Group technology assign different kinds of
machines to cells to process parts having similar
processing requirements.
Method
• Group parts into families that require common
sequence of steps.
• Identify dominant flow patterns of parts families.
• Physically grouping machines as per the flow
patterns into cells.
T Shirt Sewing Operations
• A – Seams
• B - Sleeves Stitch
• C- Sleeves Attach
• H – Buttons Holes
• J- Buttons Attach
• 0- Pockets Attach
Apparel Manufacturer
• How can we form cells for the sewing
operation?
• Will we require additional machines when
we move to cells from process layout ?
• What human issues needs to handled ?
Advantages and Issues
• Lower work in process and better material
handling.
• Reduced throughput time.
• Better human relations.
Fixed Position Layout
• Used for manufacturing giant products
such as ships etc.
• Machines , parts are arranged as required
in the product.
HW1 ( details on moodle)
• HW 1 is due next Friday in hard copy form
in the class room. Max 2 students can
work as a group and submit homework.
