LAYOUT

Layout is one of the key decisions that determines the long-run efficiency of
operations. An effective layout can help an organization achieve a strategy that
supports differentiation, low cost, or response. The objective of layout strategy is to
develop an effective and efficient layout that will meet the firms competitive
requirements. In all cases, layout design must consider how to achieve the following :

Higher utilization of space, equipment and people

Improved flow of information, materials, or people
Improved employee morale and safer working conditions
Improved customer/client interaction
Flexibility (whatever the layout is now, it will need to change)

1. Types of Layout
An effective layout facilitates the flow of materials, people, and information
within and between areas. To achieve these objectives, a variety of approaches has
been developed. We will discuss seven of them in this chapter:
Office layout: positions workers, their equipment, and spaces/offices to

provide for movement of information

Retail layout: allocates shelf space and responds to customer behavior.
Warehouse layout: addresses trade-offs between space and material handling
Fixed-position layout: addresses the layout requirements of large, bulky

projects such as ships and buildings.

Process-oriented layout: deals with low-volume, high-variety production (also

called job-shop, or intermittent production).

Work-cell layout: arranges machinery and equipment to focus on production of

a single product or group of related products.

Product-oriented layout: seeks the best personnel and machine utilization in
repetitive or continuous production.

However, we do know that a good layout requires determining the following:

Material handling equipment: managers must decide about equipment to be

used.
Capacity and space requirements: only when personel, machines, and
equipment requirements are known can managers proceed with layout and

provide space for each component.

Environment and aesthetics
Flows of information

Cost of moving between various work areas

A. Office Layout
Office layouts require the grouping of workers, their equipment, and
spaces to provide for comfort, safety, and movement of information. Even
though the movement of information is increasingly electronic, analysis of
office layouts still requires a task-based approach. Managers therefore
examine both electronic and conventional communication patterns, separation
needs, and other conditions affecting employee affectiveness. A useful tool for
such an analysis is the relationship chart below.

This chart, prepared for an office of product designers, indicates that the chief
marketing officer must be :
Near the designers area
Less near the secretary and central files
Not at all near the copy center or accounting department
B. Retail layout
Retail layouts are based on the idea that sales and profitability vary directly
with customer exposure products. Thus, most retail operations managers try to
expose customers to as many products as possible. Five ideas are helpful for
determining the overall arrangement of many stores:
Locate the high-draw items around the periphery of the store

Use prominent locations for high-impulse and high-margin items

Distribute what are known in the trade as power items
Use end-aisle locations because they have a very high exposure rate
Convey the mission of the store by carefully selecting the position of the
lead-off department.
The main objective of retail layout is to maximize profitability per square foot

of floor space. Issue in retail layout is called slotting. Slotting fees are fess
manufacturers pay to get their goods on the shelf in a retail store or supermarket
chain.
C. Servicescapes
Servicescape describes the physical surroundings in which the service is
delivered and how the surroundings have a humanistic effect on customers and
employees. To provide a good service layout, a firm considers three elements:
Ambient conditions, which are background characteristics
Spatial layout and functionality, whivh involve customer cisrculation path

planning, aisle characyteristics, and product grouping.

Signs, symbols and artifacts, which are characteristics of building design that
carry social significance.

D. Warehousing and storage layout

The objective of warehouse layout is to find the optimum trade-off between
handling cost and costs associated with warehouse space. Effective warehouse
layouts do, of course, also minimize the damage and spoilage of material within
the warehouse. Modern warehouse management is, in many instances, an
automated procedure using automated storage and retrieval systems (ASRSs). An
important component of warehouse layout is the relationship between the
receiving/unloading area and the shipping/loading area.

Cross-docking
Cross-docking meant to avoid placing materials or supplies in storage by
processing them as they are received. Although cross-docking reduces product
handling, inventory, and facility costs, it requires both tight scheduling and

accurate inbound product identification.

Random stocking
Computerized random stocking systems often include the following tasks:
(a) Maintaining a list of open locations
(b) Maintaining accurate records of existing inventory and its locations
(c) Sequencing items to minimize the travel time required to pick orders
(d) Combining orders to reduce picking time

(e) Assigning certain items or classes of items

Random stocking systems can increase facility utilization and decrease
labor cost, but they require accurate records.

Customizing
Warehouses can be places where value is added through customizing.
Warehouse customization is a particularly useful way to generate competitive
advantage in markets where products have multiple configurations. These
value-added activities at quasi-warehouses contribute to strategies of
differentiation, low cost and rapid response.
E. Fixed-position layout
In a fixed-position layout, the project remains in one place and workers
and equipment come to that one work area. The techniques for addressing the
fixed-position layout are complicated by three factors. First, there is limited
space at virtually all sites. Second, at different stages of a project, different
materials are needed; therefore, different items become critical as the project
develops. Third, the volume of materials needed is dynamic. Because
problems with fixed-position layouts are so difficult to solve well onsite, an
alternative strategy is to complete as much of the project as possible offsite.
F. Process-oriented layout
A process-oriented layout can silmutaneously handle a wide variety of
products or services. It is most efficient when making products with different
requirements or when handling customers, patients, or clients with different
needs. A big advantage of process-oriented layout is its flexibility in
equipment and labor assignments. Process-oriented layout is also especially
good for handling the manufacture of parts in small batches, or job lots, and
for the production of a wide variety of parts in different sizes or forms.
The disadvantages of process-oriented layout come from the general-purpose
use of the equipment. Orders take more time to move through the system
because of difficult scheduling, changing setups, and unique material handling.
General-purpose equipment requires high labor skills, and work-in-process
inventories are higher because of imbalances in the production process.
When designing a process layout, the most common tactic is to arrange
departments or work centers so as to minimize the costs of material handling.

Material handling costs in this approach depend on (1) the number of loads (or
people) to be moved between two departments during some period of time and
(2) the distance-related costs of moving loads (or people) between
departments. The objective can be expressed as follows :

2. Work Cells
A work cell reorganizes people and machines that would ordinarily be
dispersed in various epartments into a group so that they can focus on making a
single product or a group of related products as figure below.

The advantages of work cells are :

Reduced work-in-process inventory
Less floor space required
Reduced raw material and finished goods inventories
Reduced direct labor cost
Heightened sense of employee participation
Increased equipment and machinery utilization
Reduced investment in machinery and equipment
A. Requirements or work cells
The requirements of cellular production include :
Identification of families of products, often through the use of group

technology code equivalents

A high level of training, flexibility, and empowerment of employees

Being self-contained, with its own equipment and resources

Test (poka-yoke) at each station in the cell
Work cells have at least five advantages over assembly lines and process

facilities: (1) because tasks are grouped, inspection is often immediate; (2) fewer
workers are needed; (3) workers can reach more of the work area; (4) the work
area can be more efficiently balanced; and (5) communication is enhanced
B. Staffing and balancing work cells
Efficient production in a work cell requires appropriate staffing, this involves
two steps. First, determine the takt time, which is the pace (frequency) of
production unit necessary to meet customer orders:
Takt time = total work time available/Units required
Second, determine the number of operators required. This requires dividing the
total operation time in the work cell by the takt time:
Workers required = total opration time required/takt time
In many arrangements, without cells and without cross training, if one
operation is halted for whatever reason, the entire flow stops. Multiple-operator
cells are therefore preferred.
C. The focused work center and the focused factory
A focused work center move sproduction from a general-purpose, processoriented facility to a large work cell that remains part of the present plant. If the
focused work center is ini a separate facility, it is often called a focused factory.
The term focused factories may laso refer to facilities that are focused in ways
other than by product line or layout.
3. Repetitive and product-oriented layout
Two types of a product-oriented layout are fabrication and assembly lines. The
fabrication line builds components, while an assembly line puts the fabricated parts
together at a series of workstations. Fabrication lines tend to be machine-paced nad
require mechanical and engineering changes to facilitate balancing. Assembly
lines, tend to be paced by work tasks assigned to individuals or to workstations.
Managements goal is to create a smooth, continuing flow along the assembly
line with a minimum of idle time at each workstation. A well-balanced assembly
line has the advantage of high personnel and facility utilization and equity among
employees work loads. The term most often used to describe this process is

assembly-line balancing. The objective of the product-oriented layout is to

minimize imbalance in the fabrication or assembly line.
The main advantages of product-oriented layout are:
(a) The low variable cost per unit usually associated with high-volume,
(b)
(c)
(d)
(e)

standardized products
Low materials handling costa
Reduced work-in-process inventories
Easier training and supervision
Rapid throughput

The disadvantages of product layout are :

(a) The high volume required because of the large investment needed to establish
the process
(b) Work stoppage at any one point ties up the whole operation
(c) A lack if flexibility when handling a variety of products or production rates
A. Assembly-Line Balancing
Line blancing is usually undertaken to minimize imbalance between machines or
personnel while meeting arequired output from the line. Once we have
constructed a precedence chart summarizing the sequences and performance
times, we turn the job of grouping tasks into job stations so that we can meet the
specified production rate. This process involves three steps:
(1) cycle time, the maximum time allowed at each workstation if the production
rate is to be achieved:

(2) calculate the theoretical minimum number of workstations. Fractions are

rounded to the next higher whole number:

(3) balance the line by assigning specific assembly task to each workstation. A
formal procedure for doing this is the following :
identify a master list of tasks
eliminate those tasks that have been assigned

eliminate those tasks whose precedence relationship has not been

satisfied
eliminate those tasks for which inadequate time is available at the

workstation.
Use one of the line-balancing heuristics as described below

We can compute the efficiency of a line balance by dividing the total task time
by the product of the number workstations required times the assigned (actual) cycle
time of the longest workstation: