Category Archives: Facility Decisions: Layouts

Product Layout

Product Layout

When product demand is sufficiently high and sustainable over a long period of time it is usually cost effective to rearrange resources from a process layout to a product layout as defined by the sequence of steps required to make the product. We often call these assembly lines, although the ratio of direct manual labor to machine work can vary widely. Assembly lines can vary from virtually 100 percent parts assembly by workers. to the other extreme, an automated transfer line. where all direct work is done by machine. In between are all types lines have tools ranging from simple hammers and wrenches fa robotic welding and painting. Assembly lines in electronics also can range widely from manual parts assembly to equipment for automatic parts insertion automatic soldering and automatic testing.

Minimizing Interdependent Movement Costs

Consider the following simple example:


Suppose that we want to arrange the six departments of a toy factory to minimize the interdepartmental material handling cost. Initially, let us make the assumption that all departments have the same amount of space say 40 feet by 40 feet and that the building is 80 feet wide and 120 feet long (and thus compatible with the department dimensions). The first thing we would want to know is the nature of the flow between departments and the way the material is transported. If the company has another factory that makes similar products information about flow patterns might be obtained from these records. On the other hand if this is a new product such information would have to come from routing sheets or from estimates by knowledgeable personnel such as process or industrial engineers. Of course these data regardless of their source have to be adjusted to reflect-the-nature of future orders over the projected life of the proposed layout. Let us assume that this -information is available. We find that material is-transported in a standard-size crate by forklift truck one crate to a truck (which constitutes one "load"). Now suppose that transportation costs are $1 to move' load be n adjacent.departments and extra Io reach department in bet ween. e assume there' two-way traffic' between departments.) The expected loads-between departments forth first year of operation are tabulated in Exhibit 8.2; the available plant space is depicted in Exhibit 8.3. Given this information. our first step is to illustrate the interdepartmental flow by a model. such as Exhibit 8.4. which is Exhibit 8.2 displayed in the building layout in Exhibit 8.3. this provides the basic layout pattern. which we are trying to improve.


Interdepart mental Flow


Building Dimensions and Departments'

Building Dimensions and Departments'


The second step is to determine the annual cost of this layout by multiplying the material handling cost per load by the number of loads moved between each department. Exhibit 8.5 presents this information which is derived as follows: The annual material handling cost between Departments 1 and 2 is $175 ($1 x 175 moves), $460 between Departments I and 5 ($2 x 230 moves) and so forth. (The distances are taken from Exhibit 8.3 or 8.4, not Exhibit 8.2.)

The third step is a search for departmental changes that reduce costs. On the basis of the graph and the cost matrix, it appears desirable to place Departments 1 and 5 closer together to reduce their high move-distance costs. However this requires shifting another department  thereby affecting other move distance costs and the total cost of the second solution. Exhibit 8.6 shows the revised layout resulting from relocating Department 5 and an adjacent department (Department 3 is arbitrarily  elected for this purpose)The revised cost matrix for the exchange  with the cost changes circled  is given in Exhibit-8.7. Note.the to total cost $345 less than in the initial solution While this  trial and error approach resulted in a lower total cost in this case, even are small problem it is often difficult to identify the correct "obvious move" on the basis of casual inspection. The revised layout for the facility is shown in Exhibit




Thus far, we have shown only one exchange among a large number of potential exchanges in fact for a six department problem there are 61 (or 720) possible arrangements. Therefore the procedure we have employed would have only a remote possibility of achieving an optimal combination in a "reasonable" number of tries. Nor does our problem stop
here. Other factors must be taken into consideration. Suppose that we are able to arrive at a good trial-and-error solution solely on the basis of material handling cost. Continuing with our toy factory example, locating the sewing department
next to the painting department might not only be hazardous. but also may result in defective products with lint, thread, and cloth particles drifting onto the painted items before they can dry. Thus, issues like these also must be incorporated into the final choice of layout.

Process Layout

Process Layout

The most common approach for developing a process layout is to arrange departments consisting of similar or identical processes in a way that optimize  their relative placement. In many installations optimal placement often translate into placing departments with large amounts of interdepartmental traffic adjacent to one another. The primary goal in designing a layout for a manufacturing or distribution facility to minimize material handling costs. In a service organization. the main object e is to minimize customer and worker travel time through the process .


Factory FLOW integrates material handling data and a layout drawing to compute material handling distances, costs, and equipment utilization .

. The Factory FLOW software made it possible to comrplete this project in a short amount of time, and the facilities planners at this company now have a tool for further evaluation of facility layouts and material handling systems

oration management in practice


A challenge many facilities planners face today is finding a way to quickly and effectively evaluate proposed layout
changes and material handling systems so that the material handling costs and distances are minimized. This challenge
was addressed during a three-day, on-site software training session conducted at an appliance manufacturer. The facilities planners were learning the basics on using the Factory FLOW software package, a computer-based, facilities planning tool developed by Cimtechnologies Corp. The training group evaluated a current layout proposal of a console assembly area to see if any improvements could be made.

The Factory FLOW software quantitatively evaluates facility layouts and material handling systems by showing , the material flow paths and costs, both in output text reports and in a graphic overlay of an AutoCAD layout drawing. Factory FLOW evaluates the material flow and material handling costs and distances using the following input information: an Auto CAD layout drawing, part routing data 0.e., part names, from/to locations, and move quantities), and material handling system characteristics (i.e. fixed and variable costs load/unload times, and speeds). The facilities planners had a drawing of the area, and the Indus rial engineers supplied the part routing and material equipment information; therefore data entry and analysis of the current layout took about one-half of a day. Output diagrams and reports showed material handling distances of over 407 million feet per year and material handling costs of just' over 8900,000 per year. The second half of the day was used to come up with alternative layouts by analyzing the output text reports and the material flow lines. On alternative was to rotate a line of 16 plastic presses 90 degrees, so they fed right into the sub assembly area and to rotate the main console assembly lines 90 degrees, so they were closer to the same area.

Since the primary material handling system was an overhead conveyor minimizing the length of the conveyor was a major concern. Factory FLOW was used to evaluate the alternative layout and the output reports showed the material handling costs had been reduced by over $100,000 to $792,265 per year. Also, by decreasing the material travel distance the length of overhead conveyor needed had been reduced from 3,600 feet to just over 700 feet. is also common to find an entire plant arranged according to general product flow (fabrication, sub assembly, and final assembly). coupled with process layout within fabrication and product layout within the assembly department Likewise group technology is frequently found within a department that itself is located according to a plant wide process-oriented layout.

An operation's layout continually changes over time because the internal and external environments are dynamic. A demands change. so can layout. As technology changes, so can layout. In Chapter 3. we discussed a product/process matrix indicating that as products and volumes change, the most efficient layout is also likely to change. Therefore, the decision on a specific layout type may be a temporary one.

managerial issues

managerial issues 

Managers need to take many factors into consideration when determining which type of facility layout is most appropriate for their operations. This applies to both manufacturing and service operations alike. Product-oriented layouts like assembly lines, as we shall see, are highly efficient but tend to be very inflexible. Process-oriented layouts, on the other and are very flexible, in terms of the wide variety of products that can be made, but, as we saw at TACO in the opening vignette, they typically have significant work-in process inventories are relatively inefficient and slow. The choice of which type of layout to adopt cannot be made lightly because it can Significantly impact a company's long-term success both in terms of product costs and its ability to compete successfully in the marketplace. In addition, the investment costs that are associated with installing a particular layout, in terms of time and money, are substantial. The manager's goal in selecting a layout is to provide a smooth flow of material through the factory, or an uncomplicated traffic pattern for both customers and workers in a service operation. Today, there are many software packages available to assist managers in designing a layout that is both efficient and effective, as illustrated in the OM in Practice box.