1. Chapter 9: Layout Strategies BUSI 2016

2. Why is layout strategic issue?

3. Why is layout a strategic issue? • Get a high utilization of space, equipment and people • Improved “flow” of information, materials and people • Improved employee morale, safer working conditions • Improved customer/client interaction • Flexibility (ie changeability)

4. Types of Layout

5. Office Layout • Goal is to optimize flow of information, rather than goods and services. • Issues • Unique factors – pertaining to individual company • (next page) • Universal factors – apply to most offices • Proximity, privacy, permission

6. Office Layout – Office Relationship Chart

7. Retail Layout Assumes that sales and profits vary directly with customer exposure to products Five Ideas used in retail • Locate the high draw items on the periphery of the store • Prominent locations for high impulse, high margin items • Disperse “power items” – items that dominate a shopping trip • End aisle locations have a high exposure rate • Put “lead-off” departments in a prominent place

8. Retail Layout - Servicescapes • Areas in which services take place • Important factors • Ambient conditions (lighting, sound, music, smell) • Spatial layout (plan customer paths, angles for shelves, etc) • Signs, symbols, artifacts (carpet encourages slower traffic)

9. Warehouse and Storage Layouts • Minimize cost by addressing tradeoffs • Maximize total utilization • Incoming transport • Storage • Outgoing transport • Minimize cost • Equipment - People • Material - Supervision • Insurance - Depreciation

10. Warehouse and Storage Layouts - Retrieval • Cross-docking • Processing materials as they are received • Random Stocking • Material put anywhere in the warehouse, as opposed to stacking it all in the same place • Accurate records via Automatic Identification Systems needed • Find • Open Locations • Exact items • Travel Time • High-usage / low-usage items assigned based on traffic • Customizing – do “some” work in the warehouse

11. Fixed Position Layout • Product remains in one place • Ie shipyard, cars pre Henry Ford, operating table • Problems • Limited Space, different materials at different times, different processes • Solutions • Manufacture assemblies off site • Manufacture based on similar designs

12. Process Oriented Layout • Deals with low-volume, high-variety production. Very flexible • Eg hospital, custom machines

13. Process Oriented Layout - Optimizing • Place departments with larger material flows closer to each other

14. Work Cells • Arrangement of machines focused on making one product or family of products (highly standardized) • Advantages • Reduced WIP – set up to provide flow from machine to machine • Less floor space rqd – closer machines to accommodate flow • Reduced raw material and finished goods – rapid • Reduced direct labour – improved communication, better material flow • High sense of employee participation • High machine utilization

15. Work Cells - Layout

16. Work Cells – Staffing and Balancing • Determine Staffing • Takt time – how often does a product need to off the line, “beat”, “measure” • Takt time = total work time available / units required • Workers required = total operation time required / takt time • Focused Work Center • “factory within a factory”

17. Product Oriented Layout • Organized around high volume, low-variety products. • Repetition, continuous • Assumes that • Volume is high enough Demand is stable • Product is standardized (more or less) Raw materials are uniform • Advantages • Low variable cost per unit Low material handling costs • Reduced WIP Easier training • Rapid throughput • Disadvantages • Any work stoppage can tie up entire organization! • Flexibility a challenge

18. Product Oriented Layout – Assembly line Balancing • To reduce the amount of slack time throughout the assembly process • Balancing resources

19. Product Oriented Layout – Determining Efficiency • Cycle time = production time per day / units required per day • Min num of workstations = (sum of all tasks)/cycle time • Efficiency = (sum of task times) / (actual number of workstations) * (largest assigned cycle time)