Components of Facility Planning

Lecture 4 FACILITIES PLANNING AND DESIGN

FACILITIES PLANNING

FACILITIES LOCATION FACILITIES SYSTEM

FACILITIES DESIGN

FACILITIEES LAYOUT

Prepared By: Prof. Rene D. Estember

FACILITIES HANDLING SYSTEM

Components of Facility Planning

Facility Location Refers to the placement of facility with which it interfaces It includes placement and orientation on a specific plot of land Facility Systems Consists of the structural systems, the atmospheric systems, the lighting/electrical/communication systems, life safety systems and the sanitation systems

Components of Facility Planning

Facility Layout Physical arrangement of equipment, machinery, furnishings, production areas, production-related areas and personnel areas within the building Facility Handling System Consists of the mechanism needed to satisfy the required facility interactions Consists of the materials, personnel, information and equipment handling systems required to support production.

Location Strategy
One of the most important decisions a firm makes

Location and Innovation

Cost is not always the most important aspect of a strategic decision
Four key attributes when strategy is based on innovation
High-quality and specialized inputs An environment that encourages investment and local rivalry A sophisticated local market Local presence of related and supporting industries

Increasingly global in nature

Long term impact and decisions are difficult to change The objective is to maximize the benefit of location to the firm

Location Decisions
Long-term decisions Decisions made infrequently Decision greatly affects both fixed and variable costs Once committed to a location, many resource and cost issues are difficult to change
Figure 8.1

Location Decisions
Country Decision Critical Success Factors
1. Political risks, government rules, attitudes, incentives 2. Cultural and economic issues 3. Location of markets 4. Labor availability, attitudes, productivity, costs 5. Availability of supplies, communications, energy 6. Exchange rates and currency risks

Location Decisions
Region/ Community Decision
MN WI MI IL IN OH

Location Decisions
Site Decision Critical Success Factors
1. Site size and cost 2. Air, rail, highway, and waterway systems 3. Zoning restrictions 4. Nearness of services/ supplies needed 5. Environmental impact issues

Critical Success Factors

1. Corporate desires 2. Attractiveness of region 3. Labor availability, costs, attitudes towards unions 4. Costs and availability of utilities 5. Environmental regulations 6. Government incentives and fiscal policies 7. Proximity to raw materials and customers 8. Land/construction costs

Figure 8.1

Figure 8.1

Factors That Affect Location Decisions

Labor productivity
Wage rates are not the only cost Lower productivity may increase total cost

Factors That Affect Location Decisions

Exchange rates and currency risks
Can have a significant impact on cost structure Rates change over time

Costs
Labor cost per day Productivity (units per day) Connecticut $70 = $1.17 per unit 60 units = cost per unit Tangible - easily measured costs such as utilities, labor, materials, taxes Intangible - less easy to quantify and include education, public transportation, community, qualityof-life

Juarez $25 = $1.25 per unit 20 units

Factors That Affect Location Decisions

Attitudes
National, state, local governments toward private and intellectual property, zoning, pollution, employment stability Worker attitudes towards turnover, unions, absenteeism Globally cultures have different attitudes towards punctuality, legal, and ethical issues

Factors That Affect Location Decisions

Proximity to markets
Very important to services JIT systems or high transportation costs may make it important to manufacturers

Proximity to suppliers
Perishable goods, high transportation costs, bulky products

Factors That Affect Location Decisions

Proximity to competitors
Called clustering Often driven by resources such as natural, information, capital, talent Found in both manufacturing and service industries

Growth Competitiveness Index of Countries

Country Finland USA Sweden Taiwan Japan UK Germany Canada New Zealand France Russia 2004 Rank 1 2 3 4 9 11 13 15 18 27 70 2003 Rank 1 2 3 5 11 15 13 16 14 26 70

Clustering of Companies
Industry Wine makers Locations Napa Valley (US) Bordeaux region (France) Silicon Valley, Boston, Bangalore (India) Reason for clustering Natural resources of land and climate Talent resources of bright graduates in scientific/technical areas, venture capitalists nearby Critical mass of talent and information

Clustering of Companies
Industry Theme parks Locations Orlando Reason for clustering A hot spot for entertainment, warm weather, tourists, and inexpensive labor NAFTA, duty free export to US High technological penetration rate and per capita GDP, skilled/educated workforce with large pool of engineers
Table 8.3

Software firms

Electronic firms Northern Mexico

Race car builders

Huntington/North Hampton region (England)

Computer hardware manufacturers

Singapore, Taiwan

Table 8.3

Clustering of Companies
Industry Fast food chains Locations Sites within one mile of each other Reason for clustering Stimulate food sales, high traffic flows Mass of aviation skills

Factor-Rating Method
Popular because a wide variety of factors can be included in the analysis Six steps in the method
1. Develop a list of relevant factors called critical success factors 2. Assign a weight to each factor 3. Develop a scale for each factor 4. Score each location for each factor 5. Multiply score by weights for each factor for each location 6. Recommend the location with the highest point score

General aviation Wichita, Kansas aircraft

Table 8.3

Factor-Rating Example
Critical Success Factor Labor availability and attitude People-to car ratio Per capita income Tax structure Education and health Totals Weight Scores (out of 100) France Denmark Weighted Scores France Denmark

Locational Break-Even Analysis

Method of cost-volume analysis used for industrial locations Three steps in the method
1. Determine fixed and variable costs for each location 2. Plot the cost for each location 3. Select location with lowest total cost for expected production volume

.25 .05 .10 .39 .21 1.00

70 50 85 75 60

60 60 80 70 70

(.25)(70) = 17.5 (.25)(60) = 15.0 (.05)(50) = 2.5 (.05)(60) = 3.0

(.10)(85) = 8.5 (.10)(80) = 8.0 (.39)(75) = 29.3 (.39)(70) = 27.3 (.21)(60) = 12.6 (.21)(70) = 14.7 70.4 68.0
Table 8.3

Locational Break-Even Analysis Example

Three locations: City Fixed Cost Variable Cost $75 $45 $25 Total Cost
Annual cost

Locational Break-Even Analysis Example

$180,000 $160,000 $150,000 $130,000 $110,000 $80,000 $60,000 $30,000 $10,000 | 0

Akron $30,000 Bowling Green $60,000 Chicago $110,000 Selling price = $120 Expected volume = 2,000 units

$180,000 $150,000 $160,000

Akron lowest cost

| |

Bowling Green lowest cost

| | |

Chicago lowest cost

|

Total Cost = Fixed Cost + Variable Cost x Volume

Figure 8.2

500

1,000

1,500

2,000

2,500

3,000

Volume

Center-of-Gravity Method
Finds location of distribution center that minimizes distribution costs Considers
Location of markets Volume of goods shipped to those markets Shipping cost (or distance)

Center-of-Gravity Method
Place existing locations on a coordinate grid
Grid origin and scale is arbitrary Maintain relative distances

Calculate X and Y coordinates for center of gravity

Assumes cost is directly proportional to distance and volume shipped

Center-of-Gravity Method
dixQi x - coordinate =
i

Center-of-Gravity Method
North-South

New York (130, 130)

120 90 60 30
|

Qi
i

Chicago (30, 120) Pittsburgh (90, 110)

diyQi y - coordinate =
where
i

Qi
i

dix = x-coordinate of location i diy = y-coordinate of location i Qi = Quantity of goods moved to or from location i

Atlanta (60, 40)

| | | | |

30 Arbitrary origin

60

90

120

150

East-West

Center-of-Gravity Method
Store Location Chicago (30, 120) Pittsburgh (90, 110) New York (130, 130) Atlanta (60, 40) Number of Containers Shipped per Month 2,000 1,000 1,000 2,000

Center-of-Gravity Method
North-South

New York (130, 130)

120 90 60

Chicago (30, 120) Pittsburgh (90, 110)

Center of gravity (66.7, 93.3)

x-coordinate =

(30)(2000) + (90)(1000) + (130)(1000) + (60)(2000) 2000 + 1000 + 1000 + 2000 = 66.7

30
|

Atlanta (60, 40)

| | | | |

(120)(2000) + (110)(1000) + (130)(1000) + (40)(2000) y-coordinate = 2000 + 1000 + 1000 + 2000 = 93.3

30 Arbitrary origin

60

90

120

150

East-West

Transportation Model
Finds amount to be shipped from several points of supply to several points of demand Solution will minimize total production and shipping costs A special class of linear programming problems

Worldwide Distribution of Volkswagens and Parts

Figure 8.4

Service Location Strategy

1. Purchasing power of customer-drawing area 2. Service and image compatibility with demographics of the customer-drawing area 3. Competition in the area 4. Quality of the competition 5. Uniqueness of the firms and competitors locations 6. Physical qualities of facilities and neighboring businesses 7. Operating policies of the firm 8. Quality of management

Location Strategies
Service/Retail/Professional Location Revenue Focus Volume/revenue Drawing area; purchasing power Competition; advertising/pricing Physical quality Parking/access; security/lighting; appearance/image Cost determinants Rent Management caliber Operations policies (hours, wage rates) Goods-Producing Location Cost Focus Tangible costs Transportation cost of raw material Shipment cost of finished goods Energy and utility cost; labor; raw material; taxes, and so on Intangible and future costs Attitude toward union Quality of life Education expenditures by state Quality of state and local government

Table 8.4

Location Strategies
Service/Retail/Professional Location Techniques Regression models to determine importance of various factors Factor-rating method Traffic counts Demographic analysis of drawing area Purchasing power analysis of area Center-of-gravity method Geographic information systems Goods-Producing Location Techniques Transportation methods Factor-rating method Locational break-even analysis Crossover charts

Location Strategies
Service/Retail/Professional Location Assumptions Location is a major determinant of revenue High customer-contact issues are critical Costs are relatively constant for a given area; therefore, the revenue function is critical Goods-Producing Location Assumptions Location is a major determinant of cost Most major costs can be identified explicitly for each site Low customer contact allows focus on the identifiable costs Intangible costs can be evaluated

Table 8.4

Table 8.4

How Hotel Chains Select Sites

Location is a strategically important decision in the hospitality industry La Quinta started with 35 independent variables and worked to refine a regression model to predict profitability The final model had only four variables
Price of the inn Median income levels State population per inn Location of nearby colleges r2 = .51 51% of the profitability is predicted by just these four variables!

Telemarketing/Internet Industries
Require neither face-to-face contact nor movement of materials Have very broad location options Traditional variables are no longer relevant Cost and availability of labor may drive location decisions

Geographic Information Systems (GIS)

New tool to help in location analysis Enables more complex demographic analysis Available data bases include
Detailed census data Detailed maps Utilities Geographic features Locations of major services

Geographic Information Systems (GIS)

Machine Assignment Problem

Determination of optimum number of identical machine to assign to an operator Deterministic Model: a = concurrent activity time ( e.g. loading and unloading)
b = independent operator activity time ( e.g walking inspecting, packing etc.) t = independent machine time ( e.g. automatic machining time) n = ideal number of identical machines to assign to an operator m = number of identical machines assigned to an operator. Tr = repeating cycle time Io = idle operator time during the repeating cycle Im = idle time for each machine during a repeating cycle

Machine Assignment Problem

n = (a+ t)( a+ b) Where: (a+t) = machine cycle time ( excluding idle time) (a+b) = time devoted by an operator at each machine during the cycle. Tr = max (a + t), m(a + b) Tr = (a + t) m(a + b) m < n m > n

Machine Assignment Problem

Im = 0 Tr (a + t) Tr (a + t) 0 m < n m > n m < n m > n

Machine Assignment Problem

Where: Co = cost per operator-hour Cm = cost per machine hour TC(m) = cost per unit produced based on an assignment of m machines per operator

Io =

Cost Computation TC (m) = (Co + mCm)(a + t)/m (Co + mCm)(a + b)

m < n m > n

Machine Assignment Problem

Example:
It takes 1 minutes to load and 3 minutes to unload the machine. Inspection, packing and travel between machines total 1 minute. Machines run automatically for 20 minutes. Operators cost $12/ hour and machines cost $30/hour. a. What is the maximum number of machines that can be assigned to an operator without creating machine idle time during the repeating cycle? b. What assignment minimizes the cost per unit produced? c. What is the minimum number of machines that can be assigned to an operator without creating operator idle time? d. If 20 machines are to be allocated, how many operators are required?

Machine Assignment Problem

Solution: a = 4 mins. Cm = $30/hr b = 1 min. Co = $12/hr t = 20 mins.

a. n = (a+b)(a+t) = (4+20)(4+1)= 4.8 machines for Im to be equal to zero m should be less than or equal to n, therefore assign 4 machines to an operator to have zero machine idle time during the repeating cycle. b. Evaluate the cost/unit of assigning 4 and 5 machines to an operator TC (4) = [12/60 + 4(30/60)][(4+20)/4] = $13.2/unit TC (5) = [12/60 + 5(30/60)](4+1) = $13.5/unit Assigning 4 machines minimizes cost/unit produced c. For Io to be equal to zero, m should be greater than n, therefore the minimum number of machines to be assigned to an operator is 5 machines. d. 5 operators ( 204 ) since assignment of 4 machines to an operation is the less costly option.

Man-Machine Chart
A descriptive analog model showing the manmachine relationships graphically against a time scale. Another approach used to determine the assignment of operators to machine More useful in analyzing the man-machine relationships when non identical machines are being tended by one operator.

Man-Machine Chart
Example: A newly setup inspection line will be used for testing the tensile strength of a fabric thread. The process includes 1 minute loading and unloading of fabric to the machine, 1 minute packing and 4 minutes testing ( done by the machine). Machines consume small space which make travel to and from machines unnecessary. The objective is to balance the use of both man and machine but since the machines were acquired at high cost, it is given greater weight. a. Evaluate the following man-machine ratio of 1:1, 1:2, 1:3 and determine the best assignment. b. If there were 20 machines to be operated how many operators are required.

Man-Machine Chart
Solution:
Time ( min) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Man a Machine a t t t t a t t t t a t t t t

a b

a b

Time ( min) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Man a1 a2

Machine 1 Machine 2 a1 t t t t a1 t t t t a1 t t t t a1

a1 a2 b1 b2 a1 a2 b1 b2 a1

a2 t t t t a2 t t t t a2 t t t t

Time ( min) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Man a1 a2 a3

Machine 1 Machine 2 Machine 3 a1 t t t t a1 t t t t a1 t t t t a1 t t t t

Personnel Requirement
a. man-machine ratio of 1:2 is the best assignment with 80% utilization of man and 100% utilization of machine

a1 a2 a3 b1 b2 b3 a1 a2 a3 b1 b2 b3 a1 a2 a3 b1 b2 b3 a1

a2 t t t t a2 t t t t a2 t t t t a2 t t t t

a3 t t t t a3 t t t t a3 t t t t a3 t t t t

b. 10 operators ( 202) are required to handle the 20 machines with 1:2 man-machine ratio

Man-machine ration = 1:1 Tr = 5 mins. Man % Utilization = 40% Machine % Utilization = 100%

Man-machine ratio = 1:2 Tr = 5 mins. Man % Utilization = 80% Machine % Utilization = 100%

Man-machine ratio = 1:3 Tr = 6 mins. Man % Utilization = 100% Machine % Utilization = 83%

Personnel Requirement
Personnel requirements are function of the following factors: unionized or non unionized labor force Level of automation Production Rate Management policies on subcontracting and overtime Salary rate in the area Health insurance rate Others.

Personnel Requirement
Deterministic Model The number of employees required in a new facility is typically proportional to the volume and variety of production. For example, if: n = number of types of operations Si = Standard time required for an operation i Qi = Quantity to produce on operation i per day H = Production time available per day E = Plant efficiency Then the number of production employees required is given by

P = SiQiHE
n i -1

Space requirements
Modern manufacturing approaches are changing drastically space requirements in production, storage areas and offices. Specifically, space requirements are being reduced because:
Products are delivered to the point of use in smaller lot and unit load sizes Decentralization storage areas are located at the point of use Less inventories are carried out ( products are pulled from preceding process using kanbans and internal and external inefficiencies have been eliminated) More efficient layout arrangement ( manufacturing cells ) are used Companies are downsizing ( focused factories, leaner organizational structures, decentralization of function etc) Offices are shared and telecommunication is used

Workstation space requirements

A workstation space requirements include:
space for equipment, space for materials space for personnel

equipment space includes space for:

The equipment Machine travel Machine maintenance Plant services

Equipment space requirements

Equipment space requirement should be readily available from Machinery Data Sheet. Machine Data Sheet contains at least the following information: Machine manufacturer and type Machine model and serial number Machine manufacturer and type Machine model and serial number Location of machine safety stops Floor loading requirements Static height at maximum point

Equipment space requirements

Maximum vertical travel Static width at maximum point Maximum travel to the left Maximum travel to the right Static depth at maximum point Maximum travel toward the operator Maximum travel away from the operator Maintenance requirements and areas Plant service requirements and areas

Equipment space requirements

Total machinery area requirement is computed as:
n TMA = [(TW)i(TD)i] + [(MA)i + (PSA)i] i=1 where: TW = Total Width ( static width + maximum travel to the left and right) TD = Total Depth ( Static depth + maximum travel toward and away from the operator) MA = Maintenance area requirement PSA = Plant service area requirement n = total number of machines

Material space requirements

The material areas for a workstation consist of space for: Receiving and storing inbound materials In-process materials Storing outbound materials and shipping Storing and shipping waste and scrap Tools, fixtures, jigs, dies and maintenance materials

Personnel area requirements

The personnel area for a workstation consists of space for: The operator Material Handling Operator ingress and egress Aisle space requirement: min. 30 in. - if operator travel past stationary objects min. 36 in. - if operator walks between a stationary object and an operating machine min. 42 in - if operator walks between two operating machines.

Workstation Design
Factors to consider in workstation design: Workstation should be designed so the operator can pick up and discharge materials without walking or making long awkward reaches. Workstation should be designed for efficient and effective utilization of the operator Workstation should be designed to minimize the time spent manually handling materials Workstation should be designed to maximize operator safety comport and productivity Workstation should be designed to minimize hazards, fatigue and eye strain

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Department area requirements

Departmental area requirements include: Workstation space requirements Material handling ( within the department) space requirements Aisle space requirements Workstation service area requirements

Aisle Requirements
Aisle Allowance estimate
If the target load is Percentage Less than 6 ft2 Between 6 and 12 ft2 Between 12 and 18 ft2 Greater than 18 ft2 Aisle Allowance 5 -10 10 20 20 30 30 40

Aisle Arrangement
Aisle should be located in a facility to promote effective flow Aisle must neither be too narrow nor too wide Aisle widths should be determined by considering type and volume flow to be handled by the aisle Non-right angle intersections should be avoided in planning for aisles Aisles should be straight and lead to doors. Aisles along the outside wall of a facility should be avoided unless the aisle is used for entering or leaving the facility. Column spacing should be considered when planning aisle spacing. Columns are often used to border the aisle but rarely should be located in an aisle.
Department Name General Machining

Production Space Requirement

Work Center Name Vertical Milling Planner Punch Press Injection Molding Otoscope Cell NC-machine Lathe AutoChucker Work Auxilliary Operator Material Length Area Center Width (ft) Area Space Space Subtotal (ft) ( sq. ft) Code ( sq ft) ( sq ft ) ( sq ft) 1202 2005L 3058 6078 9087 1212 2056 15 25 10 20 20 15 5 15 5 10 10 8 8 5 225 125 100 200 160 120 25 70 40 30 60 50 40 10 30 20 20 50 30 20 5 50 40 20 100 30 30 5 375 225 170 410 270 210 45 Allowance 50% 25% 40% 50% 25% 50% 25% 563 282 238 615 338 315 57 Number of machines 2 1 2 3 2 1 1 Total Space 1126 282 476 1845 676 315 57 4777

GRAND TOTAL

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