Layout Strategies

Dr. Syed Amir Iqbal.

Innovations at McDonalds
Indoor seating (1950s) Drive-through window (1970s) Adding breakfast to the menu (1980s) Adding play areas (late 1980s) Redesign of the kitchens (1990s) Self-service kiosk (2004) Now three separate dining sections

Innovations at McDonalds
Indoor seating (1950s) Drive-through window (1970s) Six out of the Adding breakfast to the menu seven are (1980s) layout Adding play areas (late 1980s) decisions! Redesign of the kitchens (1990s) Self-service kiosk (2004) Now three separate dining sections

McDonalds New Layout

Seventh major innovation Redesigning all 30,000 outlets around McDonalds is the world considered to Three separate dining areas

be more Linger zone with comfortable chairs and Wi-Fi connections innovative Grab and go zone with tall counters to compared Flexible zone for kids andApple families!

Facility layout is a source of competitive advantage

Introduction
Facility layout planning includes decisions regarding the physical allocation of the economic activity centers in a facility.
An economic activity center is any entity occupying space. The objective of plant layout planning is a more effective work flow at the facility, allowing workers and equipment being more productive. Facility layout techniques apply to the case where several physical means have to be located in a certain area, either industrial processes or services. The objective of the chapter is not only Plant layout but re-layout also (most common situation for a company).

To carry out an appropriate plant layout, its important to take into account the business strategic and tactical objectives
Example: space requirements/cost per m2 in Malls; accessibility/privacy in offices.

Introduction
To make a decision about layout planning, 4 different questions must have an answer:
Which centers do we have to consider? How much space and capacity is required for each center?
If there is not enough space, productivity may be reduced. Too much space is expensive and may also reduce productivity.

How must the space be configured at each center?

Space quantity, shape and the elements of the work center are related to each other.

Where should each center be located at within the facility?

The allocation of the different centers may affect productivity.

Introduction
The plant layout process starts at an aggregate level, taking into account the different departments. As soon as we get into the details, the different issues arise, and the original configuration may be changed through a feedback process. Most (if not all of them) layouts are designed properly for the initial conditions of the business, although as long as the company grows and has to be adapted to internal and external changes, a re-layout is necessary.

Introduction
The reasons for a re-layout are based on 3 types of changes:
Changes in production volumes.

Changes in processes and technology.

Changes in the product.

The frequency of the re-layout will depend on the requirements of the process.

Introduction
Symptoms that allow us to detect the need for a re-layout:
Congestion and bad utilization of space.
Excessive stock in process at the facility. Long distances in the work flow process. Simultaneous bottle necks and workstations with idle time. Qualified workers carrying out too many simple operations.

Labor anxiety and discomfort. Accidents at the facility.

Difficulty in controlling operations and personnel.

Facility Layout Definition

A facility layout is an arrangement of everything needed for production of goods or delivery of services. A facility is an entity that facilitates the performance of any job. It may be a machine tool, a work centre, a manufacturing cell, a machine shop, a department, a warehouse, etc. (Heragu, 1997).

The

layout design generally depends on the products variety and the production volumes. Four types of organization are referred to, namely fixed product layout, process layout, product layout and cellular layout (Dilworth, 1996).

Quantity

Product Layouts Fixed Position Process Layouts Layouts Mixed Layouts

Number of Different Products

Objectives of Plant Layout

The main objective consists of organizing equipment and working areas in the most efficient way, and at the same time satisfactory and safe for the personnel doing the work. Sense of Unity
The feeling of being a unit pursuing the same objective.

Minimum Movement of people, material and resources.

Safety
In the movement of materials and personnel work flow.

Flexibility
In designing the plant layout taking into account the changes over short and medium terms in the production process and manufacturing volumes.

Objectives of Plant Layout

These main objectives are reached through the attainment of the following facts:
Congestion reduction.

Elimination of unnecessary occupied areas.

Reduction of administrative and indirect work. Improvement on control and supervision. Better adjustment to changing conditions. Better utilization of the workforce, equipment and services. Reduction of material handling activities and stock in process. Reduction on parts and quality risks. Reduction on health risks and increase on workers safety. Moral and workers satisfaction increase.

Reduction on delays and manufacturing time, as well as increase in production capacity.

All these factors will not be reached simultaneosly, so the best solution will be a balance among them.

Strategic Importance of Layout Decisions

The objective of layout strategy is to develop a cost-effective layout that will meet a firms competitive needs

Factors affecting Plant Layout

The final solution for a Plant Layout has to take into account a balance among the characteristics and considerations of all factors affecting plant layout, in order to get the maximum advantages. The factors affecting plant layout can be grouped into 8 categories:
1. Materials 2. Machinery 3. Labor 4. Material Handling 5. Waiting Time 6. Auxiliary Services 7. The building 8. Future Changes

Factors affecting Plant Layout

The factors affecting plant layout can be grouped into 8 categories:
Materials
The layout of the productive equipment will depend on the characteristics of the product to be managed at the facility, as well as the different parts and materials to work on.

Main factors to be considered: size, shape, volume, weight, and the physical-chemical characteristics, since they influence the manufacturing methods and storage and material handling processes.
The sequence and order of the operations will affect plant layout as well, taking into account the variety and quantity to produce.

Factors affecting Plant Layout

The factors affecting plant layout can be grouped into 8 categories:
Machinery
Having information about the processes, machinery, tools and necessary equipment, as well as their use and requirements is essential to design a correct layout. The methods and time studies to improve the processes are closely linked to the plant layout. Regarding machinery, we have to consider the type, total available for each type, as well as type and quantity of tools and equipment. Its essential as well to know about space required, shape, height, weight, quantity and type of workers required, risks for the personnel, requirements of auxiliary services, etc.

Factors affecting Plant Layout

The factors affecting plant layout can be grouped into 8 categories:
Labor
Labor has to be organized in the production process (direct labor, supervision and auxiliary services).
Environment considerations: employees safety, light conditions, ventilation, temperature, noise, etc. Process considerations: personnel qualifications, flexibility, number of workers required at a given time as well as the type of work to be performed by them.

Material Handling
Material handling does not add value to the product; its just waste. Objective: Minimize material handling as well as combining with other operations when possible, eliminating unnecessary and costly movements.

Factors affecting Plant Layout

The factors affecting plant layout can be grouped into 8 categories:
Labor
Labor has to be organized in the production process (direct labor, supervision and auxiliary services). Environment considerations: employees safety, light conditions, ventilation, temperature, noise, etc. Process considerations: personnel qualifications, flexibility, number of workers required at a given time as well as the type of work to be performed by them.

Material Handling
Material handling does not add value to the product; its just waste. Objective: Minimize material handling as well as combining with other operations when possible, eliminating unnecessary and costly movements.

Factors affecting Plant Layout

The factors affecting plant layout can be grouped into 8 categories:
Waiting time - Stock
Objective: Continuous Material Flow through the facility, avoiding the cost of waiting time and demurrages that happen when the flow stops. On the other hand, the material waiting to flow through the facility not always represents a cost to avoid. As stock sometimes provides safety to protect production, improving customer service, allowing more economic batches, etc.
Its necessary then to consider space for the required stock at the facility when designing the layout.

Resting time to cool down or heating up

Factors affecting Plant Layout

The factors affecting plant layout can be grouped into 8 categories:
Auxiliary Services
Support the main production activities at the plant:
Related to labor: Accessibility paths, fire protection installations, supervision, safety, etc. Related to material: quality control. Related to machinery: maintenance and electrical and water lines.

The auxiliary services represent around 30% of the space at a facility.

The space dedicated to auxiliary services is usually considered as waste.
Its important to have efficient services to insure that their indirect costs have been minimized.

Factors affecting Plant Layout

The factors affecting plant layout can be grouped into 8 categories:
The building
If it has been already selected, its characteristics will be a constraint at the moment of designing the layout, which is different if the building has to be built.

Future changes
One of the main objectives of plant layout is flexibility. Its important to forecast the future changes to avoid having an inefficient plant layout in a short term. Flexibility can be reached keeping the original layout as free as possible regarding fixed characteristics, allowing the adjustment to emergencies and variations of the normal process activities. Possible future extensions of the facility must be taken into account, as well as the feasibility of production during re-layout.

Layout Design Considerations

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

Types of Layout
1. Office layout 2. Retail layout

3. Warehouse layout
4. Fixed-position layout

5. Process-oriented layout
6. Work-cell layout 7. Product-oriented layout

Types of Layout
1. Office layout: Positions workers, their equipment, and spaces/offices to provide for movement of information 2. Retail layout: Allocates shelf space and responds to customer behavior 3. Warehouse layout: Addresses tradeoffs between space and material handling

Types of Layout
4. Fixed-position layout: Addresses the layout requirements of large, bulky projects such as ships and buildings 5. Process-oriented layout: Deals with low-volume, high-variety production (also called job shop or intermittent production)

Types of Layout
6. Work cell layout: Arranges machinery and equipment to focus on production of a single product or group of related products 7. Product-oriented layout: Seeks the best personnel and machine utilizations in repetitive or continuous production

Good Layouts Consider

1. Material handling equipment 2. Capacity and space requirements

3. Environment and aesthetics

4. Flows of information

5. Cost of moving between various work areas

Layout Strategies
Office Allstate Insurance Microsoft Corp. Retail Examples Krogers Supermarket Walgreens Bloomingdales Problems/Issues Expose customer to high-margin items Federal-Moguls warehouse The Gaps distribution center Warehouse (storage)

Locate workers requiring frequent contact close to one another

Table 1

Balance low-cost storage with lowcost material handling

Layout Strategies
Project (fixed position) Examples Ingall Ship Building Corp. Trump Plaza Arnold Palmer Hospital Hard Rock Caf Job Shop (process oriented)

Olive Garden

Pittsburgh Airport Problems/Issues Move material to the Manage varied material limited storage areas flow for each product around the site

Table 1

Layout Strategies
Work Cells (product families) Examples Hallmark Cards Wheeled Coach Sonys TV assembly line Toyota Scion Repetitive/ Continuous (product oriented)

Standard Aero Problems/Issues Identify a product family, build teams, cross train team members

Equalize the task time at each workstation

Table 1

Office Layout
Grouping of workers, their equipment, and spaces to provide comfort, safety, and movement of information Movement of information is main distinction Typically in state of flux due to frequent technological changes

Relationship Chart

Figure 1

Relationship Chart

Supermarket Retail Layout

Objective is to maximize profitability per square foot of floor space Sales and profitability vary directly with customer exposure

Five Helpful Ideas for Supermarket Layout

1. Locate high-draw items around the periphery of the store 2. Use prominent locations for high-impulse and high-margin items 3. Distribute power items to both sides of an aisle and disperse them to increase viewing of other items 4. Use end-aisle locations 5. Convey mission of store through careful positioning of lead-off department

Store Layout

Figure 2

Retail Slotting
Manufacturers pay fees to retailers to get the retailers to display (slot) their product Contributing factors
Limited shelf space An increasing number of new products Better information about sales through POS data collection

Closer control of inventory

Retail Store Shelf Space Planogram

Computerized tool for shelfspace management Generated from stores scanner data on sales Often supplied by manufacturer
5 facings
Shampoo
Conditioner

Shampoo
Conditioner

Shampoo

Shampoo

Shampoo Conditioner

Shampoo

2 ft.

Shampoo

Shampoo

Shampoo

Servicescapes
Ambient conditions - background characteristics such as lighting, sound, smell, and temperature Spatial layout and functionality - which involve customer circulation path planning, aisle characteristics, and product grouping Signs, symbols, and artifacts - characteristics of building design that carry social significance

Warehousing and Storage Layouts

Objective is to optimize trade-offs between handling costs and costs associated with warehouse space Maximize the total cube of the warehouse utilize its full volume while maintaining low material handling costs

Warehousing and Storage Layouts

Material Handling Costs
All costs associated with the transaction
Incoming transport

Storage
Finding and moving material Outgoing transport

Equipment, people, material, supervision, insurance, depreciation

Minimize damage and spoilage

Warehousing and Storage Layouts

Warehouse density tends to vary inversely with the number of different items stored Automated Storage and Retrieval Systems (ASRSs) can significantly improve warehouse productivity by an estimated 500% Dock location is a key design element

Random Stocking
Typically requires automatic identification systems (AISs) and effective information systems Random assignment of stocking locations allows more efficient use of space Key tasks
1. Maintain list of open locations
2. Maintain accurate records 3. Sequence items to minimize travel, pick time 4. Combine picking orders 5. Assign classes of items to particular areas

Customizing
Value-added activities performed at the warehouse
Enable low cost and rapid response strategies
Assembly of components Loading software

Repairs
Customized labeling and packaging

Warehouse Layout
Traditional Layout
Storage racks Customization

Conveyor Staging Shipping and receiving docks Office

Storage System Performance

Performance measures for storage systems: Storage capacity - two measures:
Total volumetric space Total number of storage compartments (e.g., unit loads)

Storage density - volumetric space available for storage relative to total volumetric space in facility Accessibility - capability to access any item in storage System throughput - hourly rate of storage/retrieval transactions Utilization and availability (reliability)

Storage Location Strategies

Randomized storage - incoming items are stored in any available location
Usually means nearest available open location

Dedicated storage - incoming items are assigned to specific locations in the storage facility
Typical bases for deciding locations:
Items stored in item number sequence Items stored according to activity level Items stored according to activity-to-space ratios

Inventory Level as a Function of Time

Comparison of Storage Strategies

Less total space is required in a storage system that uses a randomized storage strategy
Dedicated storage requires space for maximum inventory level of each item

Higher throughput rates are achieved in a system that uses dedicated storage strategy based on activity level
The most active items can be located near the input/output point Compromise: Class-based dedicated storage
Items divided into classes according to activity level Random storage strategy used within each class

Comparison of Storage Strategies

Suppose that a total of 50 SKUs must be stored in a storage system. For each SKU, average order quantity = 100 cartons, average depletion rate = 2 cartons/ day. and safety stock level = 10 cartons. Each carton requires one storage location in the system. Based on this data, each SKU has an inventory cycle that lasts 50 days. Since there are 5O SKUs in all, management has scheduled incoming orders so that a different SKU arrives each day. Determine the number of storage locations required in the system under two alternative strategies: (a) randomized storage and (b) dedicated storage. Our estimates of space requirements are based on average order quantities and other values in the problem statement. Let us first calculate the maximum inventory level and average inventory level for each SKU. The inventory for each SKU varies over time as shown in Figure. The maximum inventory level, which occurs just after an order has been received. is the sum of the order quantity and safety stock level. 52 Maximum inventory level = 100 + 10 = 110 cartons

Comparison of Storage Strategies

The average inventory is the average of the maximum and minimum inventory levels under the assumption of uniform depletion rate. The minimum value occurs just before an order is received when the inventory is depleted to the safety stock level.
Minimum inventory level = 10 cartons Average inventory level = (110 + 10)/12 = 60 cartons (a) Under a randomized storage strategy, the number of locations required for each SKU is equal to the average inventory level of the item.since incoming orders are scheduled each day throughout the 50-day cycle. This means that when the inventory level of one SKU near the beginning of its cycle is high, the level for another SKU near the end of its cycle is low. Thus, the number of storage locations required in the system is: Number of storage locations = (50 SKUs)(60 cartons) = 3000 locations 53

Comparison of Storage Strategies

(b) Under a dedicated storage strategy, the number of locations required for each SKU must equal its maximum inventory level. Thus, the number of storage locations required in the system is:
Number of storage locations = (50 SKUs){110 cartons) = 5500 locations

54

Conventional Storage Methods

Bulk storage - storage in an open floor area
Problem: achieving proper balance between storage density and accessibility

Rack systems - structure with racks for pallet loads

Permits vertical stacking of materials

Shelving and bins - horizontal platforms in structural frame

Steel shelving comes in standard sizes Finding items can be a problem

Drawer storage - entire contents of each drawer can be viewed

Bulk Storage

Bulk storage arrangements: (a) high-density bulk storage provides low accessibility, (b) bulk storage with loads forming rows and blocks for improved accessibility

Pallet Rack System

Pallet loads placed on racks in multi-rack structure

Drawer Storage

Automated Storage Systems

Mechanized and automated storage equipment to reduce the human resources required to operate a storage facility Significant investment Level of automation varies
In mechanized systems, an operator participates in each storage/retrieval transaction In highly automated systems, loads are entered or retrieved under computer control

Objectives and Reasons for Automating Storage Operations

To increase storage capacity To increase storage density To recover factory floor space currently used for WIP To improve security and reduce pilferage To reduce labor cost and/or increase productivity To improve safety To improve inventory control To improve stock rotation To improve customer service To increase throughput

Types of Automated Storage System

1. Automated Storage/Retrieval System (AS/RS)
Rack system with mechanized or automated crane to store/retrieve loads

2. Carousel Storage System

Oval conveyor system with bins to contain individual items

AS/RS
Unit load AS/RS with one aisle

AS/RS Types
Unit load AS/RS - large automated system for pallet loads Deep-lane AS/RS - uses flow-through racks and fewer access aisles Miniload AS/RS - handles small loads contained in bins or drawers to perform order picking Man-on-board AS/RS - human operator rides on the carriage to pick individual items from storage Automated item retrieval system - picks individual items Vertical lift storage modules (VLSM) - uses a vertical aisle rather than a horizontal aisle as in other AS/RS types

AS/RS Applications
1. Unit load storage and retrieval
Warehousing and distribution operations AS/RS types: unit load, deep lane (food industry)

2. Order picking
AS/RS types: miniload, man-on-board, item retrieval

3. Work-in-process storage
Helps to manage WIP in factory operations Buffer storage between operations with different production rates Supports JIT manufacturing strategy

Carousel Storage Systems

Horizontal
Operation is similar to overhead conveyor system used in dry cleaning establishments Items are stored in bins suspended from the conveyor Lengths range between 3 m and 30 m Horizontal is most common type

Vertical
Operates around a vertical conveyor loop Less floor space required, but overhead room must be provided

Horizontal Carousel Storage System

Manually operated horizontal carousel storage system

Carousel Applications
1. Storage and retrieval operations
Order picking Kitting of parts for assembly

2. Transport and accumulation

Progressive assembly with assembly stations located around carousel

3. Work-in-process
WIP applications in electronics industry are common

4. Unique applications
Example: time testing of electrical products

Engineering Analysis of Automated Storage Systems

1. Automated Storage/Retrieval Systems
Sizing the AS/RS AS/RS throughput analysis

2. Carousel storage systems

Storage capacity Throughput analysis

Engineering Analysis of Automated Storage Systems

Automated Storage/Retrieval Systems
Sizing the AS/RS Rack Structure.
Capacity per aisle = 2 nynz

where ny == number of toad compartments along the length of the aisle, and nz = number of load compartments that make up the height of the aisle. Let x and y - the depth and width dimensions of unit load (e.g., 1 standard pallet size), and z = the height of the unit load.

69
Top and side views of a unit load AS/RS, with nine storage compartments horizontally (n,. = 9) and six compartments vertically( n, = 6).

Engineering Analysis of Automated Storage Systems

Automated Storage/Retrieval Systems
where W, L, and H are the width, length, and height of one aisle of the AS/RS rack structure (mm, in); .x, y, and z are the dimensions of the unit load (mm, in); and a, b, and c are allowances designed into each storage compartment to provide clearance for the unit load and to account for the size of the supporting beams in the rack structure (mm, in).

70

Each aisle of a six-aisle Automated Storage/Retrieval System is to contain 50 storage compartments in the length direction and 8 compartments in the vertical direction. All storage compartments will be the same size to accommodate standard size pallets of dimensions: x = 36 in and y = 48 in. The height of a unit load z = 30 in. Using the allowances a = 6 in, b = 8 in, and c = 10 in, determine (a) how many unit loads can be stored in the AS/RS, and (b) the width, length, and height of the AS/RS. The rack structure will be built 18 in above floor level.

(a) Capacity per aisle = 2(50(8)) = 800 loads/aisle With six aisles, AS/RS capacity = 6(800) = 4800 loads (b) W = 3(x + a) = 3(36 + 6) = 126 in/aisle With 6 aisles, AS/RS width = 6(126) = 756 in = 63 ft. L = ny (y + b) = 50(48 + 8) = 2800 in = 233.33 ft. H = nz (z + c) = 8(30 + 10) = 320 in = 26.67 ft. 71 Given that the rack structure is built 18 in above floor level, H = 320 + 18 = 338 in = 28.167 ft.

Engineering Analysis of Automated Storage Systems

Automated Storage/Retrieval Systems AS/RS Throughput.
System throughput is defined as the hourly rate of SIR transactions that the automated storage system can perform. A transaction involves depositing a load into storage or retrieving a load from storage. Here it is assumes: (1) randomized storage of loads in the AS/RS [i.e., any compartment in the storage aisle is equally likely to be selected for a transaction) (2) storage compartments are of equal size, (3) the P&D station is located at the base and end of the aisle, (4) constant horizontal and vertical speeds of the SIR machine, and (5) simultaneous horizontal and vertical travel.

72

For a single command cycle, the load to be entered or retrieved is assumed to be located at the center of the rack structure, as in Figure. Thus, the SIR machine must travel half the length and half the height of the AS/RS, and it must return the same distance. The single command cycle time can therefore be expressed by:

where tc = cycle lime of a single command cycle (min/cycle),L = length of the AS/RS rack structure (m, ft), vy = velocity of the SIR machine along the length of the AS/RS (m/min. ft/min), H = height of the rack structure (m, ft), Vz = velocity of the SIR machine in the vertical direction of the AS/RS (m/min, ft/min), and Tpd = pickup-and-deposit lime (min). Two P&D times are required per cycle. representing load transfers to and from the SIR machine.
Assumed travel trajectory of the SIR machine for (a) single command

73

Production System
The production system is the collection of people, equipment and procedures organized to accomplish the manufacturing operations of a company or any organization.

Production System
Facilities: The facilities of the production systems consist of the factory, the equipment in the factory and the way equipment is organized. Manufacturing support systems: This is the set of procedures use by the company to manage production and to solve the technical and logistics problems encountered in ordering material , moving work through the factory and ensuring that products meet quality standards. Product design and certain business functions are included among the manufacturing support system.

Production System Facilities

The facilities in the production system are the factory, production machines and tooling, material handling equipment, inspection equipment, and the computer systems that control the manufacturing operations. Facilities include plant layout, which is the way the equipment is physically arranged in the factory. The equipment is usually arranged into logical groupings and we refer to these equipment arrangements and workers who operates them as Manufacturing Systems. Manufacturing systems can be individual work cells, consisting of a single production machine and worker assigned to that machine. However, commonly a manufacturing system is a group of machines and workers.

Production quantity
Production quantity refers to the number of units of a given part or product produced annually by the plant. The annual part or product quantities produced in a given factory can be classified into three ranges: Low Production: Quantities in the range of 1 to 100 units per year. Medium Production: Quantities in the range of 100 to 10,000 units annually High Production: Quantities in the range of 10,000 to millions of units.

Production quantity
Product variety refers to the different product designs or types that are produced in a plant. When the number of product types made in a factory is high, this indicates high product variety. There is an inverse correlation between product variety and production quantity in terms of factory operations When product variety is high, production quantity tends to be low; and vice versa. Hard product variety is when the products differ substantially. In an assembled product, hard variety is characterized by a low proportion of common parts among the products; in many cases, there are no common parts. The difference between a car and a truck is hard. Soft product variety is when there are only small differences between products, such as the differences between car models made on the same production line. There is high proportion of common parts among assembled products whose variety is soft. The variety between different product categories tends to be hard; the variety between different models within the same product category tends to be soft.

System classification
On the basis of production quantity, production facilities can be classified as:
Low production quantity Medium production quantity High production quantity

On the basis of plant layout:

Fixed-position layout Process layout Cellular layout, and Product layout.

System classification

Low Production Quantity

Job shop makes low quantities of specialized and customized products Also includes production of components for these products Products are typically complex (e.g., specialized machinery, prototypes, space capsules) Equipment is general purpose Plant layouts: Fixed position Process layout

Fixed-Position Layout
Product remains in one place Workers and equipment come to site Complicating factors
Limited space at site

Different materials required at different stages of the project Volume of materials needed is dynamic

Alternative Strategy
As much of the project as possible is completed off-site in a productoriented facility This can significantly improve efficiency but is only possible when multiple similar units need to be created

Fixed-Position Layout

Process-Oriented Layout
Like machines and equipment are grouped together Flexible and capable of handling a wide variety of products or services Scheduling can be difficult and setup, material handling, and labor costs can be high

Process Layout

Process-Oriented Layout
Patient A - broken leg ER triage room Surgery

Emergency room admissions

Patient B - erratic heart pacemaker Laboratories

Radiology

ER Beds

Pharmacy

Billing/exit

Figure 3

Process-Oriented Layout
Arrange work centers so as to minimize the costs of material handling Basic cost elements are
Number of loads (or people) moving between centers Distance loads (or people) move between centers

Process-Oriented Layout
Minimize cost =
where
n

Xij Cij

i=1 j=1

n = total number of work centers or departments i, j = individual departments Xij = number of loads moved from department i to department j Cij = cost to move a load between department i and department j