Facilities Planning

From ideas to plans!

Facility location decisions pertains to the choice of an appropriate geographical site for locating various manufacturing & or service facilities of an organization. Plant location is the function of determining location for a plant for maximum operating economy & effectiveness.

Need for the selection of location: When business is newly started. Existing unit has outgrown its original facilities. Establishment of branches Lease expires To reduce manufacturing cost Other social or economic reasons.

21st century: Globalisation of operations: Regulatory issues Factor advantage Expanding markets Improvements in transportation & communication facilities Reduction of wage differentials between regions Mobility of workers & management Improvements in construction methods &designs

Errors in selection: Lack of thorough investigation & consideration of factors involved. Personal bias Reluctance of executives to move from traditional home ground to new locations Moving to congested areas Improperly located Choice of community with low cultural & educational standards

Factors affecting location decisions: Market related issues: Market for products & services Raw material availability No. & proximity of suppliers Availability of skilled labors Quality of infrastructure.

Cost related issues: Wage rate Transportation costs Taxes & tariff issues Regulatory & policy measures: Govt. & economic stability Quality of legal & other institutions Trading blocks & trading agreements

Other issues: Culture Climate Quality of life Steps in location decision: 1) Deciding on domestic or international location 2) Selection of region Availability of raw materials Nearness to market

Availability of power Transport facilities Suitability of climate Government policy Competition between states 3) Selection of community Availability of power Civic amenities for workers Existence of complementary & competing industries

Finance & research facilities Availability of water & fire- fighting facilities Momentum of an early start Personal factors 4) Selection of the site: Soil, size & topography Disposal of waste Good scenery

Village, Suburban or city site: rural site:

Land at cheaper rates Spacious layout available Low wages for unskilled labors High wages for skilled labors Fewer labor trouble

Avoidance of danger from fire & other hazardous things Avoidance of undesirable neighbors Absence of restrictions on smoke & disposal of waste. Lack of supply of skilled workers Lack of civic amenities for employees Lack of transport facilities

Urban site: Good transportation facilities Skilled Labour Municipal services for water, sewage disposal Technical assistance Outsourcing Large local market High advertising value

Facility planning layout:

Layout planning in manufacturing & services organizations deals with the physical arrangement of various resources that are available in the system, with an objective to improve the performance of the operating system, thereby providing better customer service. Layout planning is determining the best physical arrangement of resources within a facility

Objectives of good layout:

Provide enough production capacity Reduce material handling costs Reduce congestion that impedes the movement of people or material Reduce hazards to personnel Utilize labor efficiently Increase employee morale Reduce accidents Utilize available space efficiently & effectively

Provide for volume & product flexibility Provide ease of supervision Facilitate coordination & communication Provide for employee safety & health Allow ease of maintenance Allow high machine/equipment utilization Improve productivity

Factors influencing facility layout:

Materials Product Worker Machinery Type of industry Location Managerial policies

Principles of layout:
Principle of minimum travel Principle of sequence Principle of usage Principle of compactness Principle of safety & satisfaction Principle of flexibility Principle of minimum investment

Types of Layouts
Process layouts / functional / job shop layout Product layouts / line processing / flow line layout Fixed-Position layouts/static layout Cellular manufacturing layouts/group technology layout Hybrid layouts / combination layout

Process Layouts
In this type of layout the machines of a similar type are arranged together at one place. This type of layout is used for batch production. It is preferred when the product is not standardized and the quantity produced is very small.

Advantages of Process layout: Lower initial capital investment is required. There is high degree of machine utilization, as a machine is not blocked for a single product The overhead costs are relatively low Breakdown of one machine does not disturb the production process. Supervision can be more effective and specialized. Greater flexibility of resources.

Disadvantages of Process layout: Material handling costs are high due to backtracking More skilled labour is required resulting in higher cost. Work in progress inventory is high needing greater storage space More frequent inspection is needed which results in costly supervision

Product Layouts
the machines and equipments are arranged in one line depending upon the sequence of operations required for the product. It is also called as line layout. without any backtracking or deviation the output of one machine becomes input of the next machine. It is used for mass production of standardized products.

Disadvantages of Product layout: Higher initial capital investment in special purpose machine (SPM) High overhead charges Breakdown of one machine will disturb the production process. Lesser flexibility of physical resources.

Advantages of Product layout: Low cost of material handling, due to straight and short route and absence of backtracking Smooth and continuous operations Continuous flow of work Lesser inventory and work in progress Optimum use of floor space Simple and effective inspection of work and simplified production control Lower manufacturing cost per unit

Hybrid Layouts
Combine elements of both product & process layouts Maintain some of the efficiencies of product layouts Maintain some of the flexibility of process layouts Examples: Group technology & manufacturing cells Grocery stores

Comparison of Product vs. Product Layouts

Process Layouts
Products:
Resources:

Product Layouts
small # efficiently
specialized

large #, different
general purpose

Facilities:
Flexibility: Processing Rates:

more labor intensive

greater relative to market slower

more capital intensive

lower relative to market faster

Handling costs: high

low

Space requirements: higher

lower

FIXED POSITION OR LOCATION LAYOUT: Fixed position layout involves the movement of manpower and machines to the product which remains stationary.
Example : locomotives, ships, boilers, generators, wagon building, aircraft manufacturing, etc.

Advantages of Fixed position layout: The investment on layout is very small. The layout is flexible as change in job design and operation sequence can be easily incorporated. Adjustments can be made to meet shortage of materials or absence of workers by changing the sequence of operations.

Disadvantages of Fixed position layout: As the production period being very long so the capital investment is very high. Very large space is required for storage of material and equipment near the product. As several operations are often carried out simultaneously so there is possibility of confusion and conflicts among different workgroups.