Session 07 Capacity and Layout

Capacity and FacilitiesCapacity and Facilities

Lecture OutlineLecture Outline

Capacity Planning Basic Layouts Designing Process Layouts Designing Service Layouts Designing Product Layouts Hybrid Layouts

CapacityCapacity

Maximum capability to produceMaximum capability to produce Affects product lead timeAffects product lead time Affects Customer responsivenessAffects Customer responsiveness Affects Operating costsAffects Operating costs Affects firm’s ability to competeAffects firm’s ability to compete

Capacity planning

Capacity planningCapacity planning establishes overall level of productive establishes overall level of productive

resources for a firmresources for a firm

3 basic strategies for timing of capacity 3 basic strategies for timing of capacity expansion in relation to steady growth in expansion in relation to steady growth in demand (lead, lag, and average)demand (lead, lag, and average)

Capacity Expansion Strategies

Capacity (cont.)

Capacity increase depends on volume and certainty of anticipated demand strategic objectives costs of expansion and operation

Best operating level % of capacity utilization that minimizes unit costs

Capacity cushion % of capacity held in reserve for unexpected

occurrences

Economies of ScaleEconomies of Scale

it costs less per unit to produce high levels of output fixed costs can be spread over a larger number of

units production or operating costs do not increase

linearly with output levels quantity discounts are available for material

purchases operating efficiency increases as workers gain

experience

Best Operating Level

Economies of ScaleBest OperatingLevel

Averageunit costof output

Volume

Diseconomies of Scale

Machine Objectives of Machine Objectives of Facility LayoutFacility Layout

Minimize material-handling costs

Utilize space efficiently Utilize labor efficiently Eliminate bottlenecks Facilitate communication and

interaction Reduce manufacturing cycle

time Reduce customer service time Eliminate wasted or

redundant movement Increase capacity

Facilitate entry, exit, and placement of material, products, and people

Incorporate safety and security measures

Promote product and service quality

Encourage proper maintenance activities

Provide a visual control of activities

Provide flexibility to adapt to changing conditions

Arrangement of areas within a facility to:

BASIC LAYOUTS

Process layouts group similar activities together

according to process or function they perform

Product layouts arrange activities in line according to

sequence of operations for a particular product or service

Fixed-position layouts are used for projects in which product

cannot be moved

Process Layout: Process Layout: Interdepartmental FlowInterdepartmental Flow

GivenGiven The flow (number of moves) to and from all The flow (number of moves) to and from all

departmentsdepartments The cost of moving from one department The cost of moving from one department

to anotherto another The existing or planned physical layout of The existing or planned physical layout of

the plantthe plant DetermineDetermine

The “best” locations for each department, The “best” locations for each department, where best means maximizing flow, which where best means maximizing flow, which minimizing costs minimizing costs

Process Layout: Process Layout: CRAFT ApproachCRAFT Approach

It is a heuristic program; it uses a simple rule It is a heuristic program; it uses a simple rule of thumb in making evaluations: of thumb in making evaluations: "Compare two departments at a time and "Compare two departments at a time and

exchange them if it reduces the total cost of the exchange them if it reduces the total cost of the layout."layout."

It does not guarantee an optimal solutionIt does not guarantee an optimal solution

CRAFT assumes the existence of variable path CRAFT assumes the existence of variable path material handling equipment such as forklift material handling equipment such as forklift truckstrucks

CRAFTCRAFT

Load inputLoad input Initial layoutInitial layout Transportation costTransportation cost Calculate dept centresCalculate dept centres Calculate cost of mat handCalculate cost of mat hand Make paired exchangeMake paired exchange If total cost decrease then repeat the If total cost decrease then repeat the

process else stopprocess else stop

Process Layout: Process Layout: Systematic Layout PlanningSystematic Layout Planning

Numerical flow of items between departments Numerical flow of items between departments Can be impractical to obtainCan be impractical to obtain Does not account for the qualitative factors that Does not account for the qualitative factors that

may be crucial to the placement decisionmay be crucial to the placement decision Systematic Layout PlanningSystematic Layout Planning

Accounts for the importance of having each Accounts for the importance of having each department located next to every other department located next to every other departmentdepartment

Is also guided by trial and errorIs also guided by trial and error Switching departments then checking the results of Switching departments then checking the results of

the “closeness” score the “closeness” score

Process Layout in ServicesProcess Layout in Services

Women’s lingerie

Women’s dresses

Women’s sportswear

Shoes

Cosmetics and jewelry

Entry and display area

Housewares

Children’s department

Men’s department

Manufacturing Process LayoutManufacturing Process Layout

A Product LayoutA Product Layout

InIn

OutOut

Description

Type of process

Product

Demand Volume Equipment

Description

Type of process

Product

Demand Volume Equipment

Sequential arrangement of activities

Continuous, mass production, mainly assembly

Standardized, made to stock

Stable High Special purpose

Process

Comparison of ProductComparison of Productand Process Layoutsand Process Layouts

Functional grouping of activities

Intermittent, job shop, batch production, mainly fabrication

Varied, made to order

Fluctuating Low General purpose

Product

Workers Inventory

Storage space Material handling Aisles Scheduling Layout decision Goal

Advantage

Workers Inventory

Storage space Material handling Aisles Scheduling Layout decision Goal

Advantage

Limited skills Low in-process, high

finished goods Small Fixed path (conveyor) Narrow Part of balancing Line balancing Equalize work at each

station Efficiency

Process

Comparison of ProductComparison of Productand Process Layoutsand Process Layouts

Varied skills High in-process, low

finished goods Large Variable path (forklift) Wide Dynamic Machine location Minimize material

handling cost Flexibility

Product

Fixed-Position LayoutsFixed-Position Layouts

Typical of projects in Typical of projects in which product produced which product produced is too fragile, bulky, or is too fragile, bulky, or heavy to moveheavy to move

Equipment, workers, Equipment, workers, materials, other materials, other resources brought to the resources brought to the sitesite

Low equipment utilizationLow equipment utilization Highly skilled laborHighly skilled labor Typically low fixed costTypically low fixed cost Often high variable costsOften high variable costs

Designing Process LayoutsDesigning Process Layouts

Goal: minimize material handling costsGoal: minimize material handling costs Block DiagrammingBlock Diagramming

minimize nonadjacent loads minimize nonadjacent loads use when quantitative data is availableuse when quantitative data is available

Relationship DiagrammingRelationship Diagramming based on location preference between areasbased on location preference between areas use when quantitative data is not availableuse when quantitative data is not available

Block DiagrammingBlock Diagramming

Unit loadUnit load quantity in which quantity in which

material is normally material is normally movedmoved

Nonadjacent loadNonadjacent load distance farther distance farther

than the next blockthan the next block

STEPSSTEPS create load summary chartcreate load summary chart calculate composite (two calculate composite (two

way) movementsway) movements develop trial layouts develop trial layouts

minimizing number of minimizing number of nonadjacent loadsnonadjacent loads

Block Diagramming: ExampleBlock Diagramming: Example

DepartmentDepartment 11 22 33 44 55

Load Summary ChartLoad Summary Chart

FROM/TOFROM/TO DEPARTMENTDEPARTMENT

11 —— 100100 505022 — — 200200 505033 6060 — — 4040 505044 100100 — — 606055 5050 — —

1 2 3

4 5

Block Diagramming: Block Diagramming: Example (cont.)Example (cont.)

2 3 200 loads2 4 150 loads1 3 110 loads1 2 100 loads4 5 60 loads3 5 50 loads2 5 50 loads3 4 40 loads1 4 0 loads1 5 0 loads

1 2 3

4 5

100 200

150 50 50

60

40

110

Grid 1

Nonadjacent Loads:110+40=150

1 2

3

4

5

100

200

150

50

50 6040110

Grid 2

Nonadjacent Loads:0

Block Diagramming: Block Diagramming: Example (cont.)Example (cont.)

12

3

4

53

2

5

1 4

(a) Initial block diagram(a) Initial block diagram (b) Final block diagram(b) Final block diagram

Block Diagram type of schematic layout diagram; includes space requirements

Relationship DiagrammingRelationship Diagramming

Schematic diagram that Schematic diagram that uses weighted lines to uses weighted lines to denote location preferencedenote location preference

Muther’s gridMuther’s grid format for displaying manager preferences for department locations

Relationship Diagramming: ExcelRelationship Diagramming: Excel

Relationship Relationship Diagramming: ExampleDiagramming: Example

ProductionProduction

OfficesOffices

StockroomStockroom

Shipping and Shipping and receivingreceiving

Locker roomLocker room

ToolroomToolroom

AA AA

AA OO

OO

OOOO

OO

UU

UU UU

UU

EEXX

II

A Absolutely necessaryE Especially importantI ImportantO OkayU UnimportantX Undesirable

A Absolutely necessaryE Especially importantI ImportantO OkayU UnimportantX Undesirable

Relationship Diagrams: Example (cont.)Relationship Diagrams: Example (cont.)

(a) Relationship diagram of original layout(a) Relationship diagram of original layout

Key:Key: AAEEIIOOUUXX

OfficesOffices

StockroomStockroom

Locker Locker roomroom

ToolroomToolroom

Shipping Shipping and and

receivingreceiving

ProductionProduction

(b) Relationship diagram of revised layout(b) Relationship diagram of revised layout

OfficesOffices

StockroomStockroom

Locker Locker roomroom

ToolroomToolroom

Shipping Shipping and and

receivingreceiving

ProductionProduction Key:Key: AAEEIIOOUUXX

Relationship Diagrams: Example (cont.)Relationship Diagrams: Example (cont.)

Computerized layout Computerized layout SolutionsSolutions

CRAFT Computerized Relative Allocation of Facilities

Technique CORELAP

Computerized Relationship Layout Planning PROMODEL and EXTEND

visual feedback allow user to quickly test a variety of scenarios

Three-D modeling and CAD integrated layout analysis available in VisFactory and similar software

Designing Service Layouts

Must be both attractive and functional Types

Free flow layouts encourage browsing, increase impulse purchasing, are flexible

and visually appealing Grid layouts

encourage customer familiarity, are low cost, easy to clean and secure, and good for repeat customers

Loop and Spine layouts both increase customer sightlines and exposure to products,

while encouraging customer to circulate through the entire store

Types of Store LayoutsTypes of Store Layouts

Designing Product Layouts

Objective Balance the assembly line

Line balancing tries to equalize the amount of work at each

workstation Precedence requirements

physical restrictions on the order in which operations are performed

Cycle time maximum amount of time a product is allowed to

spend at each workstation

Cycle Time ExampleCycle Time Example

Cd = production time available

desired units of output

Cd = (8 hours x 60 minutes / hour)

(120 units)

Cd = = 4 minutes480

120

Flow Time vs Cycle TimeFlow Time vs Cycle Time

Cycle time = max time spent at any station Cycle time = max time spent at any station Flow time = time to complete all stationsFlow time = time to complete all stations

1 2 3

4 minutes4 minutes 4 minutes4 minutes 4 minutes4 minutes

Flow time = 4 + 4 + 4 = 12 minutesFlow time = 4 + 4 + 4 = 12 minutesCycle time = max (4, 4, 4) = 4 minutesCycle time = max (4, 4, 4) = 4 minutes

Efficiency of Line and Balance Delay

ii

ii = 1= 1

ttii

nCnCaaEE = =

ii

ii = 1= 1

ttii

CCddNN = =

EfficiencyEfficiency Minimum number Minimum number of workstationsof workstations

wherewhere

ttii = completion time for element = completion time for element ii

jj = number of work elements= number of work elementsnn = actual number of workstations= actual number of workstations

CCaa = actual cycle time= actual cycle time

CCdd = desired cycle time= desired cycle time

Balance Balance delaydelay total idle total idle

time of linetime of line calculated calculated

as (1 - as (1 - efficiency)efficiency)

Line Balancing ProcedureLine Balancing Procedure

1. Draw and label a precedence diagram2. Calculate desired cycle time required for line3. Calculate theoretical minimum number of workstations4. Group elements into workstations, recognizing cycle

time and precedence constraints5. Calculate efficiency of line6. Determine if theoretical minimum number of

workstations or an acceptable efficiency level has been reached. If not, go back to step 4.

Station 1

Minutes per Unit 6

Station 2

7

Station 3

3

Assembly Lines Balancing ConceptsAssembly Lines Balancing Concepts

Question: Suppose you load work into the three work stations below such that each will take the corresponding number of minutes as shown. What is the cycle time of this line?

Question: Suppose you load work into the three work stations below such that each will take the corresponding number of minutes as shown. What is the cycle time of this line?

Answer: The cycle time of the line is always determined by the work station taking the longest time. In this problem, the cycle time of the line is 7 minutes. There is also going to be idle time at the other two work stations.

Answer: The cycle time of the line is always determined by the work station taking the longest time. In this problem, the cycle time of the line is 7 minutes. There is also going to be idle time at the other two work stations.

Example of Line BalancingExample of Line Balancing

You’ve just been assigned the job a setting up an You’ve just been assigned the job a setting up an electric fan assembly line with the following tasks:electric fan assembly line with the following tasks:

Task Time (Mins) Description PredecessorsA 2 Assemble frame NoneB 1 Mount switch AC 3.25 Assemble motor housing NoneD 1.2 Mount motor housing in frame A, CE 0.5 Attach blade DF 1 Assemble and attach safety grill EG 1 Attach cord BH 1.4 Test F, G

Example of Line Balancing: Example of Line Balancing: Structuring the Precedence DiagramStructuring the Precedence Diagram

Task PredecessorsA None

A

B A

B

C None

C

D A, C

D

Task PredecessorsE D

E

F E

F

G B

G

H E, G

H

Example of Line Balancing: Precedence DiagramExample of Line Balancing: Precedence Diagram

A

C

B

D E F

GH

2

3.25

1

1.2 .5

11.4

1

Question: Which process step defines the maximum Question: Which process step defines the maximum rate of production?rate of production?

Question: Which process step defines the maximum Question: Which process step defines the maximum rate of production?rate of production?

Answer: Task C is the cycle time of the line and therefore, the maximum rate of production.

Answer: Task C is the cycle time of the line and therefore, the maximum rate of production.

Example of Line BalancingExample of Line Balancing: Determine Cycle : Determine Cycle TimeTime

Required Cycle Time, C = Production time per period

Required output per periodRequired Cycle Time, C =

Production time per period

Required output per period

C = 420 mins / day

100 units / day= 4.2 mins / unitC =

420 mins / day

100 units / day= 4.2 mins / unit

Question: Suppose we want to assemble 100 Question: Suppose we want to assemble 100 fans per day. What would our cycle time fans per day. What would our cycle time have to be? have to be?

Question: Suppose we want to assemble 100 Question: Suppose we want to assemble 100 fans per day. What would our cycle time fans per day. What would our cycle time have to be? have to be?

Answer: Answer:

Example of Line Balancing: Determine Theoretical Example of Line Balancing: Determine Theoretical Minimum Number of WorkstationsMinimum Number of Workstations

Question: What is the theoretical minimum number of Question: What is the theoretical minimum number of workstations for this problem?workstations for this problem?

Question: What is the theoretical minimum number of Question: What is the theoretical minimum number of workstations for this problem?workstations for this problem?

Answer: Answer: Theoretical Min. Number of Workstations, N

N = Sum of task times (T)

Cycle time (C)

t

t

Theoretical Min. Number of Workstations, N

N = Sum of task times (T)

Cycle time (C)

t

t

N = 11.35 mins / unit

4.2 mins / unit= 2.702, or 3t

N = 11.35 mins / unit

4.2 mins / unit= 2.702, or 3t

A

C

B

D E F

GH

2

3.25

1

1.2 .5

11.4

1

Station 1 Station 2 Station 3

Task Followers Time (Mins)A 6 2C 4 3.25D 3 1.2B 2 1E 2 0.5F 1 1G 1 1H 0 1.4

A

C

B

D E F

GH

2

3.25

1

1.2 .5

11.4

1


A (4.2-2=2.2)


A

C

B

D E F

GH

2

3.25

1

1.2 .5

11.4

1

A (4.2-2=2.2)B (2.2-1=1.2)G (1.2-1= .2)

Idle= .2



A

C

B

D E F

GH

2

3.25

1

1.2 .5

11.4

1

C (4.2-3.25)=.95


A (4.2-2=2.2)B (2.2-1=1.2)G (1.2-1= .2)

Idle= .2


C (4.2-3.25)=.95

Idle = .95

A

C

B

D E F

GH

2

3.25

1

1.2 .5

11.4

1


A (4.2-2=2.2)B (2.2-1=1.2)G (1.2-1= .2)

Idle= .2


A

C

B

D E F

GH

2

3.25

1

1.2 .5

11.4

1

C (4.2-3.25)=.95

Idle = .95

D (4.2-1.2)=3E (3-.5)=2.5


A (4.2-2=2.2)B (2.2-1=1.2)G (1.2-1= .2)

Idle= .2


A

C

B

D E F

GH

2

3.25

1

1.2 .5

11.4

1

C (4.2-3.25)=.95

Idle = .95

D (4.2-1.2)=3E (3-.5)=2.5F (2.5-1)=1.5


A (4.2-2=2.2)B (2.2-1=1.2)G (1.2-1= .2)

Idle= .2


A

C

B

D E F

GH

2

3.25

1

1.2 .5

11.4

1

C (4.2-3.25)=.95

Idle = .95

D (4.2-1.2)=3E (3-.5)=2.5F (2.5-1)=1.5H (1.5-1.4)=.1Idle = .1


A (4.2-2=2.2)B (2.2-1=1.2)G (1.2-1= .2)

Idle= .2


Example of Line Balancing: Determine the Efficiency of Example of Line Balancing: Determine the Efficiency of the Assembly Linethe Assembly Line

Efficiency =Sum of task times (T)

Actual number of workstations (Na) x Cycle time (C)Efficiency =

Sum of task times (T)

Actual number of workstations (Na) x Cycle time (C)

Efficiency =11.35 mins / unit

(3)(4.2mins / unit)=.901Efficiency =

11.35 mins / unit

(3)(4.2mins / unit)=.901

Line Balancing: ExampleLine Balancing: ExampleWORK ELEMENTWORK ELEMENT PRECEDENCEPRECEDENCE TIME (MIN)TIME (MIN)

AA Press out sheet of fruitPress out sheet of fruit —— 0.10.1

BB Cut into stripsCut into strips AA 0.20.2

CC Outline fun shapesOutline fun shapes AA 0.40.4

DD Roll up and packageRoll up and package B, CB, C 0.30.3

0.10.1

0.20.2

0.40.4

0.30.3D

B

C

A

Line Balancing: Example (cont.)Line Balancing: Example (cont.)WORK ELEMENTWORK ELEMENT PRECEDENCEPRECEDENCE TIME (MIN)TIME (MIN)

AA Press out sheet of fruitPress out sheet of fruit —— 0.10.1

BB Cut into stripsCut into strips AA 0.20.2

CC Outline fun shapesOutline fun shapes AA 0.40.4

DD Roll up and packageRoll up and package B, CB, C 0.30.3

Cd = = = 0.4 minute40 hours x 60 minutes / hour

6,000 units

2400

6000

N = = = 2.5 3 workstations1.0

0.4

0.1 + 0.2 + 0.3 + 0.4

0.4

Line Balancing: Example (cont.)Line Balancing: Example (cont.)

CCdd = 0.4 = 0.4

NN = 2.5 = 2.5

REMAINING REMAININGWORKSTATION ELEMENT TIME ELEMENTS

1 A 0.3 B, CB 0.1 C, D

2 C 0.0 D3 D 0.1 none

0.10.1

0.20.2

0.40.4

0.30.3D

B

C

A

A, B C D

Work station 1

Work station 2

Work station 3

0.3 minute

0.4 minute

0.3 minute

CCdd = 0.4 = 0.4

NN = 2.5 = 2.5

E = = = 0.833 = 83.3%0.1 + 0.2 + 0.3 + 0.4

3(0.4)

1.0

1.2

Line Balancing: Example (cont.)Line Balancing: Example (cont.)

Computerized Line Computerized Line BalancingBalancing

Use heuristics to assign tasks to Use heuristics to assign tasks to workstationsworkstations Longest operation timeLongest operation time Shortest operation timeShortest operation time Most number of following tasksMost number of following tasks Least number of following tasksLeast number of following tasks Ranked positional weightRanked positional weight

Hybrid LayoutsHybrid Layouts

Cellular layouts group dissimilar machines into work centers (called cells)

that process families of parts with similar shapes or processing requirements

Production flow analysis (PFA) reorders part routing matrices to identify families of parts

with similar processing requirements Flexible manufacturing system

automated machining and material handling systemsautomated machining and material handling systems which can produce an enormous variety of items

Mixed-model assembly line processes more than one product model in one line

Cellular Layouts

1.1. Identify families of parts with similar Identify families of parts with similar flow pathsflow paths

2.2. Group machines into cells based on Group machines into cells based on part familiespart families

3.3. Arrange cells so material movement Arrange cells so material movement is minimizedis minimized

4.4. Locate large shared machines at Locate large shared machines at point of usepoint of use

Original Process LayoutOriginal Process Layout

CA B Raw materials

Assembly

1

2

3

4

5

6 7

8

9

10

11

12

Part Routing MatrixPart Routing Matrix

MachinesParts 1 2 3 4 5 6 7 8 9 10 11 12

A x x x x xB x x x xC x x xD x x x x xE x x xF x x xG x x x xH x x x

Figure 5.8Figure 5.8

Revised Cellular LayoutRevised Cellular Layout

3

6

9

Assembly

12

4

8 10

5

7

11

12

A B CRaw materials

Cell 1 Cell 2 Cell 3

Reordered Routing MatrixReordered Routing Matrix

MachinesParts 1 2 4 8 10 3 6 9 5 7 11 12

A x x x x xD x x x x xF x x xC x x xG x x x xB x x x xH x x xE x x x

Advantages and Disadvantages Advantages and Disadvantages of Cellular Layoutsof Cellular Layouts

AdvantagesAdvantages Reduced material Reduced material

handling and transit timehandling and transit time Reduced setup timeReduced setup time Reduced work-in- Reduced work-in-

process inventoryprocess inventory Better use of human Better use of human

resourcesresources Easier to controlEasier to control Easier to automateEasier to automate

DisadvantagesDisadvantages Inadequate part familiesInadequate part families Poorly balanced cellsPoorly balanced cells Expanded training and Expanded training and

scheduling of workersscheduling of workers Increased capital Increased capital

investmentinvestment

Automated Manufacturing CellAutomated Manufacturing Cell

Source: J. T. Black, “Cellular Manufacturing Systems Reduce Setup Time, Make Small LotProduction Economical.” Industrial Engineering (November 1983)

Flexible Manufacturing Flexible Manufacturing Systems (FMS)Systems (FMS)

FMS consists of numerous programmable machine tools connected by an automated material handling system and controlled by a common computer network

FMS combines flexibility with efficiency FMS layouts differ based on

variety of parts that the system can process size of parts processed average processing time required for part

completion

Full-Blown FMS

Mixed Model Mixed Model Assembly LinesAssembly Lines

Produce multiple models in any order Produce multiple models in any order on one assembly lineon one assembly line

Issues in mixed model linesIssues in mixed model lines Line balancingLine balancing U-shaped linesU-shaped lines Flexible workforceFlexible workforce Model sequencingModel sequencing

Balancing U-Shaped LinesBalancing U-Shaped Lines

A B C

D E

Precedence diagram:Precedence diagram:

Cycle time = 12 minCycle time = 12 min

A,B C,D E

(a) Balanced for a straight line(a) Balanced for a straight line

9 min9 min 12 min12 min 3 min3 min

Efficiency = = = .6666 = 66.7 %Efficiency = = = .6666 = 66.7 %24243636

24243(12)3(12)

12 min12 min 12 min12 min

C,D

A,B

E

(b) Balanced for a U-shaped line(b) Balanced for a U-shaped line

Efficiency = = = 100 %Efficiency = = = 100 %24242424

24242(12)2(12)

Session 07 Capacity and Layout

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