Operations Management- Chapter 9: Layout Strategies

Objective of layout strategy
– to develop an effective and efficient layout that will meet the firm’s competitive requirements
Material handling equipment
-requirement of a good layout
-managers must decide about equipment to be used, including conveyors, cranes, automated storage and retrieval systems, and automatic carts to deliver and store material
Capacity and space requirements
-requirement of a good layout
-only when personnel, machines, and equipment requirements are known can managers proceed with layout and provide space for each component
Environment and aesthetics
-requirement of a good layout
-layout concerns often require decisions about windows, planters, and height of partitions to facilitate air flow, reduce noise, and provide privacy
Flows of information
-requirement of a good layout
-communication is important to any organization and must be facilitated by the layout
Cost of moving between various work areas
-requirement of a good layout
-there may be unique considerations related to moving materials or to the importance of having certain areas next to each other
Office layout
-the grouping of workers, their equipment, and spaces/offices to provide for comfort, safety, and movement of information
-importance placed on the flow of information
Retail layout
-an approach that addresses flow, allocates space, and responds to customer behavior
-goal is to maximize profit per square foot or store space
Slotting fees
-fees manufacturers pay to get shelf space for their products
-the physical surroundings in which a service takes place, and how they affect customers and employees
Ambient conditions
-background characteristics such as lighting, smell, sound, and temperature
-affect workers and customers and can affect how much is spent and how long a person stays in the building
Spatial layout and functionality
-involve customer circulation path planning, aisle characteristics (width, direction, angle, and shelf spacing), and product grouping
Signs, symbols, and artifacts
-characteristics of building design that carry social significance (e.e. carpeted areas of a department store that encourage shoppers to slow down and browse)
Ambient conditions example
-fine-dining restaurants with linen tablecloths and candlelit atmosphere
-Mrs. Field’s Cookie Bakery smells permeating the shopping mall
-leather chairs at Starbucks
Layout/functionality example
-Kroger’s long aisles and high shelves
-Best Buy’s wide center aisle
Signs, symbols, and artifacts example
-Walmart’s greeter at the door
-Hard Rock Cafe’s wall of guitars
-Disneyland’s entrance looking like hometown heaven
Warehouse layout
-a design that attempts to minimize total cost by addressing trade-offs between space and material handling
-objective is to maximize use of the whole building (from floor to ceiling)
Material holding costs
-all the costs related to the transaction
-incoming transport, storage, and outgoing transport of the materials
-include people, equipment, material, supervision, insurance, and depreciation
-avoiding the placement of materials or supplies in storage by processing them as they are received for shipment
-e.g Walmart uses the technique to reduce distribution costs and speeds restocking of stores –> improving customer service
Random stocking
-used in warehousing to locate stock wherever there is an open location
-increase facility utilization and decrease labor cost
-using warehousing to add value to a product through component modification, repair, labeling, and packaging
-useful way to generate competitive advantage in markets where products have multiple configurations
Fixes-position layout
-a system that addresses the layout requirements of stationary projects
-project remains in one place and workers and equipment come to that one work area
-e.g. ship, highway, a bridge, a house, and an operating table in a hospital
Process-oriented layout
-a layout that deals with LOW-VOLUME, HIGH-VARIETY production in which like machines and equipment are grouped together
-most efficient when making products with different requirements or when handling customers, patients, or clients use different needs
-advantage: flexibility in equipment and labor assignments
Job lots
-groups or batches of parts processed together
Work cell
-an arrangement of machines and personnel that focuses on making a single product or family of related products
-improves process layouts by reducing floor space and by reducing direct labor cost
Takt time
-pace of production to meet customer demands
(Total work time available/Units required)
-takt time
(Total operation time required/Takt time)
-workers required
Focused work center
-a permanent or semi-permanent product-oriented arrangement of machines and personnel
Focused factory
-a facility designed to produce similar products or components
-e.g fast-food restaurants
Product-oriented layout
-organized around products or families of similar high-volume, low-variety products
-repetitive production and continuous production
-objective is to minimize the imbalance in the fabrication or assembly line
Fabrication line
-a machine-paced, product-oriented facility for building components
-e.g. automobile tires or metal parts for a refrigerator
Assembly line
-an approach that puts fabricated parts together at a series of workstations; used in repetitive workstations
Assembly-line balancing
-obtaining output at each workstation on a production line so delay is minimized
Cycle time
-the maximum time that a product is allowed at each workstation if the production rate is to be achieved
(Production time available per day/Units required per day)
-cycle time
(Total task-duration time/Cycle time)
-minimum number of workstations
-problem solving using procedures and rules rather than mathematical optimization (does not guarantee optimal solution)
1. longest task (operation time)
2. most following tasks
3. ranked positional weight
4. shortest task (operations) time
5. least number of following tasks
(Total task times/(Actual # of workstations)(Largest assigned cycle time)