FACTWISE REPORTFACTWISE REPORTONON

FACILITY LAYOUTFACILITY LAYOUTFOR FOR

NEW VIEW NEW VIEW TECHNOLOGIESTECHNOLOGIES

CHANDRASEKHAR GANDURI

ROHAN GAVANDE

KRISHNAN V KUMAR

SAMIK RAYCHAUDHURI

Methodology SUBDIVIDED INTO 3 PHASES

• PHASE-I: Rough-cut calculations for giving a basic idea of number of machines, number of operators, shifts per hour, number of cells, batch size and total cost.

• PHASE-II: Simulation for fixing number of machines, number of operators, level of cross-training, buffer-size and operator assignment. Preliminary calculation of initial cost and operating cost. Rough layout of cells.

• PHASE-III: Finalizing overall layout and detailed layout for cells and office spaces. Finalizing material handling method. Projecting cost estimates.

Operations PolicyOperations Policy

Cells are operating 1 Shift per day of 8 hours each. 1 Hour overtime for 3rd Year in Cell# 1 (For model# 860) and Cell# 3 (For model# 1080).

5 working days per week, 50 weeks per year : Total 250 days.

Cross-training level of operators are same, with additional cross-training in after 2 years.

Buffer sizes between machines are kept to 20 units.

Batch size is equal to a day’s order.

Details of Cell : Cell #1 (Model# 860)Details of Cell : Cell #1 (Model# 860)Operation Type Curr. Yr. After Yr1 After Yr2

M/C Util M/C Util M/C Util

Unpack and label components M 1 76.6 1 84.5 1 86.3

Sanitize LC displays and PCB’s M 1 77.3 1 84.3 1 85.2

Connect display to Power strips A 1 78.9 1 82.7 1 85.8

Tack keyboard inputs to display A 1 73.2 1 83.1 1 85

Bond power strip to PCB and LCD A 1 DH 83.2 2 (1D

+1S)

63.8 2 (1D

+1S)

69.92

Insert Backlights and Sensors A 1 78.4 1 79.7 1 75.6

Verify Alignment and Bonds M 1 66.4 1 74.8 1 60.49

Power Up Test on Components A 1 73.4 1 80.2 1 71.43

Solder Subassemblies and Connectors A 2 77.8 2 84.3 2 78.9

Complete Assembly in Housing A 2 73.3 2 81.5 2 73.3

Final test and Record Results A 1 76 1 82.7 1 77.1

Pack and Label Units M 1 73.5 1 84.6 1 79.4

TOTAL - 14 15 15

Cell #1: Throughput and OperatorsCell #1: Throughput and Operators

Operation Curr. Yr. After Yr1

After Yr2

TOTAL ANNUAL DEMAND FOR MODEL # 860

42000 48300 55545

TOTAL AVAILABLE HOURS 2000 2000 2250

REQUIRED THROUGHPUT FOR THE CELL (parts/hour)

21 24.15 24.69

OBTAINED THROUGHPUT WITH PROPOSED CELL (parts/hour)

21.96 ± 0.087

27.69 ± 0.059

26.94 ± 0.0291

Total Number of Operators 4 5 5

Cell #1: Operator (After 2 Yr.)Cell #1: Operator (After 2 Yr.)Op# 1 Op# 2 Op# 3 Op# 4 Op# 5

Unpack X X O O O

Sanitize X X X O O

Connect O O X O O

Tack O O X O O

Bond O O X X O

Insert O O O X O

Verify O O O X O

Power O O O O X

Solder O O O O X

Complete O X O O X

Final O O O O X

Pack X X O O O

Util Levels

89.7 % 87.1% 82.1% 78.7% 55.8%

Cell #1: Cost FiguresCell #1: Cost Figures

CATEGORY YEAR 1 YEAR 2 YEAR 3

MACHINE COST 80600 22000 0

OPERATORS 155400 186650 221150

MATERIAL HANDLING

2352 0 0

PM & SPC (@$250 + $100 per m/c per year)

17500 18750 18750

TOTAL 255852 227400 239900

Operation Type Curr. Yr. After Yr1 After Yr2

M/C Util M/C Util M/C Util

Unpack and label components M 1 85 1 85 1 85

Sanitize LC displays and PCB’s M 1 74.2 1 79 1 84.9

Connect display to Power strips A 1 85 1 85 1 85

Tack keyboard inputs to display A 1 80 1 80.4 1 85

Bond power strip to PCB and LCD A 2 (1D

+1S)

85 2 (1D

+1S)

85 3 (1D

+2S)

85

Insert Backlights and Sensors A 1 72.2 1 78.1 1 84.4

Verify Alignment and Bonds M

Power Up Test on Components A 1 60 1 62.9 1 69.36

Solder Subassemblies and Connectors A 3 82.5 3 85 4 74.9

Complete Assembly in Housing A 2 85 3 75.3 3 84.2

Final test and Record Results A 1 48 1 71.8 1 76.7

Pack and Label Units M 1 52.8 1 57.2 1 62

TOTAL - 15 16 18

Details of Cell : Cell #2 (Model# 970)Details of Cell : Cell #2 (Model# 970)

Operation Curr. Yr. After Yr1

After Yr2

TOTAL ANNUAL DEMAND FOR MODEL # 970

32000 38400 46080

TOTAL AVAILABLE HOURS 2000 2000 2000

REQUIRED THROUGHPUT FOR THE CELL (parts/hour)

16 19.2 23.04

OBTAINED THROUGHPUT WITH PROPOSED CELL (parts/hour)

16.25 ± 0.0026

20.03 ± 0.0138

23.94 ± 0.0249

Total Number of Operators 4 5 5

Cell #2: ThroughputCell #2: Throughput

Cell #2: Operator (After 2 Yr.)Cell #2: Operator (After 2 Yr.)

Op# 1 Op# 2 Op# 3 Op# 4 Op# 5

Unpack X O O O O

Sanitize O X O O O

Connect O X O O X

Tack O O O O X

Bond O O O O X

Insert O O O X O

Power O O O X O

Solder O O O X O

Complete O X O X O

Final X O X O O

Pack O O X O O

Util Levels

79.9 % 71.2 % 69.3% 42% 60.1%

Cell #2: Cost FiguresCell #2: Cost Figures

CATEGORY YEAR 1 YEAR 2 YEAR 3

MACHINE COST 103300 1200 23500

OPERATORS 156000 156000 200850

MATERIAL HANDLING 2216 0 0

SPC & PM (@$250 + $100 per m/c per year)

18750 20000 22500

TOTAL 280266 177200 246850

Operation Type Curr. Yr. After Yr1 After Yr2

M/C Util M/C Util M/C Util

Unpack and label components M 1 84.7 2 79.4 2 86.3

Sanitize LC displays and PCB’s M 1 76.4 1 82.1 1 87

Connect display to Power strips A 1 77.4 1 84.3 1 86.5

Tack keyboard inputs to display A 1 72 1 76.9 1 71.6

Bond power strip to PCB and LCD A 2 (1D

+1S)

77.4 2 (1D

+1S)

83.4 2 (1D

+1S)

85

Insert Backlights and Sensors A 2 75.3 2 80.4 2 71

Verify Alignment and Bonds M

Power Up Test on Components A 1 77.9 1 82.7 1 73.3

Solder Subassemblies and Connectors A 3 81.8 4 85.2 4 77.2

Complete Assembly in Housing A 2 78.6 3 83 3 74

Final test and Record Results A 1 71.5 1 76.3 1 69.0

Pack and Label Units M 1 65.7 1 69.5 1 56.8

TOTAL - 16 19 19

Details of Cell : Cell #3 (Model# 1080)Details of Cell : Cell #3 (Model# 1080)

Cell #3: ThroughputCell #3: Throughput

Operation Curr. Yr. After Yr1

After Yr2

TOTAL ANNUAL DEMAND FOR MODEL # 1080

28000 36400 47320

TOTAL AVAILABLE HOURS 2000 2000 2500

REQUIRED THROUGHPUT FOR THE CELL (parts/hour)

14 18.2 18.92

OBTAINED THROUGHPUT WITH PROPOSED CELL (parts/hour)

15.30 ± 0.0355

19.90 ± 0.1168

19.96 ± 0.0145

Total Number of Operators 4 5 5

Cell #3: Operator (After 2 Yr.)Cell #3: Operator (After 2 Yr.)

Op# 1 Op# 2 Op# 3 Op# 4 Op# 5

Unpack X O X O X

Sanitize O X X O X

Connect O X O O O

Tack O O O X O

Bond O O O X O

Insert O O O X O

Power O O O X O

Solder O X O O O

Complete O X O O X

Final O O X O X

Pack X O X O O

Util Levels

72.7% 55.8% 61.9% 47.7% 80.6%

Cell #3: Cost FiguresCell #3: Cost Figures

CATEGORY YEAR 1 YEAR 2 YEAR 3

MACHINE COST 111300 3500 0

OPERATORS 149800 149800 264900

MATERIAL HANDLING EQP.

2592 0 0

SPC & PM (@$250 + $100 per m/c per year)

20000 23750 23750

TOTAL 283692 177050 288650

Anatomy of the FacilityAnatomy of the Facility

Layout

Material Handling

Communication

Utilities

Building

LayoutLayout

Location

Overall / Block Layout

Detailed / Cell Layout

Implementation

Four Phases of Systematic Layout Planning

CommunicationCommunication

Computers and modern information system are used for storage and retrieval of data.

One Information Systems Manager

Digital Information access to managers and above.

For production support, open office structure facilitates communication.

UtilitiesUtilities

Auxiliary utilities like recreation room, training rooms, conference rooms, medical facilities, cafeteria are provided.

Maintenance and Facilities Supervisor.

Maintenance, compressors and spare parts.

Material Handling and StorageMaterial Handling and Storage

External Integration

Overall Handling Plan

Detailed Handling Plan

Installation

Four Phases of Material Handling Analysis

MH : Overall HandlingMH : Overall Handling

Based on:

basic system of moves

Type of equipments

Transport unit or containers

Equipments used are:

Walkie-Pallet Truck

Gravity-roller conveyor

Wooden and Steel Pallets

MH : Detailed HandlingMH : Detailed Handling

Material Control System

Material Handling Dimensions:

Movement, Quantity, Time, Space & Control

MH and Storage Statistics and CostMH and Storage Statistics and Cost

Battery powered Walkie-Pallet Truck : 1 @ $5000

Steel Pallets : 15 @ $150 each = $2250

Wooden Pallets : 21 @ $120 each = $2520

Gravity Roller Conveyors : 205 ft. @ $8 /ft. = $1640

Conveyor Kits : 600 @ $5 each = $3000

Storage Shelves : 20 @$30 each = $600

Operation PoliciesOperation Policies

Two roads diverged in a yellow wood,And sorry I could not travel both.

- Robert Frost, The Road not taken- Robert Frost, The Road not taken

Performance MeasuresPerformance Measures

Tell me how you measure me and I will tell you how to behave. If you measure me in an illogical way do not be surprised by illogical behavior.

- Dr.Eli Goldratt,The Haystack Syndrome- Dr.Eli Goldratt,The Haystack Syndrome

Performance MeasuresPerformance Measures

External Oriented Measures:

Cost based : Cost to Customer

Investment indices–ROI,Payback

Inventory

Operational expense

other financial accounting measures

Performance MeasuresPerformance Measures

External Oriented Measures:

Non cost based : Lead times

Delivery Reliability

Flexibility in production

Performance MeasuresPerformance Measures

Internal Oriented Measures:

- Scrap Costs

Should be process oriented than result oriented.

- Cell Throughput

- Work In Process

- Unit cost - Quality related Measurements

- Cell team performance - Space utilization

Performance IncentivesPerformance Incentives

-Dwight Eisenhower

Motivation is the art of getting people to do what you want them to do because they want to do it.

Performance IncentivesPerformance Incentives

Monetary rewards : Team based awards

Rewards need to be more monetary and non monetary

: Skill Based pay Schemes

Non-Monetary rewards : Public recognition

Best cell teams

Training PolicyTraining Policy Operators are cross-trained to minimize costs and obtain benefits that come with knowledge.

Initial cross-training level is based on operator background and projected operator idle time.

Operators who jell together as a team should be cross trained Consultants with proven experience in successfully implementing CM should be hired to educate operators and managers about CM and their broadened job roles. Operators should be encouraged to take initiative and experiment with new methods to solve the problems.

Quality PolicyQuality Policy

Strict quality policy is followed.

Separate manager for Quality Assurance : One technician and one co-op to help him.

Strategies like TQM should be implemented to get the full benefits of CM

Cell teams should be encouraged to come up with innovative solutions to tackle quality problems

Quality problems in incoming material is routinely communicated to suppliers.

Shipping, Receiving and LoadingShipping, Receiving and Loading

Inbound and outbound shipments are outsourced.

Quality of inbound raw material and outbound finished goods are responsibility of freight forwarders.

Choice of shipment agents are fixed for three months, and reviewed after that on the basis of performance.

Scrap PolicyScrap Policy

Present scrap rate is 7-8% of production, which is uncontrolled random scrap.

Scraps were reduced by removing setup and implementing SPC and PM.

MH equipment also handle scraps produced by the workstations:

§ Pallets have colored shelve for scraps.

§ Space between gravity conveyors are used for scraps too.

Company has a environment-friendly recycle policy.

Maintenance PolicyMaintenance Policy

Separate Supervisor for maintenance. The Preventive Maintenance will be done in machine idle time to allow for undisrupted production.

Cell teams will be trained to look for potential problems and focus on finding the cause of breakdown quickly and develop measures to prevent its reoccurrence.

Inventory PolicyInventory Policy

Separate warehouse for incoming material and finished LCD’s.

Company tries to maintain minimum raw material inventory: 2-3 days of inventory is stored in warehouse.

Incoming material and finished product inventory are monitored using software.

3 days of production capacity is stored in finished good inventory.

Cost AnalysisCost Analysis

Cost Curr. Yr. After 1 Yr. After 2 Yr.

Cell1 255852 227400 239900

Cell2 280266 177200 246850

Cell3 283692 177050 288650

Floor Space Cost 179840 0 0

RM and Inv. Cost 6561620 7924764 9581573

Salary (Sup. + Off.) 940000 940000 940000

Warehs and Store 7850 0 0

Other Utilities 30000 30000 30000

Office Space Cost 92250 0 0

Total 8,631,370 9,476,414 11,326,973

Figures in $

Cost Analysis : GraphCost Analysis : Graph

Total Cost vs. Year

0

2000000

4000000

6000000

8000000

10000000

12000000

1 2 3

Year

Co

st Year

Cost

Production Support PeopleProduction Support People

Inventory/warehouse supervisor : 1

Shop Floor Manager: 1

Maintenance and Facilities supervisor + assistant: 2

Warehouse and Store personnel: 2

(Monthly Salary shown in Square Bracket)

Office PersonnelOffice Personnel

Human Resources (Manager & Co-op): 2

Purchasing Manager: 1

Accounting/finance Manager + Information Systems Technical Person: 1

Product design and Development Manager + 2 engineers + 1 Co-op: 4

Quality Assurance Manager + QC Technician + Co-op: 3

(Monthly Salary shown in Square Bracket)

Manufacturing/Process Engineering Manager + Co-op: 2

President + Executive Assistant/Receptionist: 2