Professional Documents
Culture Documents
Processes
Selection and
Layout
Operations Management
Dr. Ron Lembke
Process Strategy
Variety
High
Medium
project
Workcenter Manufacturing
Cell
Assembly
Line Continuous
Process
Low
Low
Medium
High
Volume
Process Strategy
Variety
High
Process Focus
(job shops)
Repetitive (cars,
motorcycles)
Medium
Product Focus
(steel, glass)
Low
Low
Medium
High
Volume
Process Selection /
Evolution
Layout Types
Project or Fixed-Position
Design is for stationary project
Workers & equipment come to site
Complicating factors
Examples
Ship building
Highway construction
Process-Oriented Layout
Design places departments with large flows of
material or people together
Dept. areas have similar processes
Hospitals
Machine shops
Process-Oriented Layout
Floor Plan
Table Saws
Office
1995
Corel Corp.
Drill Presses
Tool Room
Process Layout
+ Allows specialization - focus on one skill
+ Allows economies of scale - worker can watch
several machines at once
+ High level of product flexibility
-- Encourages large lot sizes
-- Difficult to incorporate into JIT
-- Makes cross-training difficult
Product-Oriented Layout
Facility organized around product
Design minimizes line imbalance
Tool Room
Drills
Work Cell
Office
Reduces:
Inventory
Floor space
Direct labor
costs
Increases:
Equipment
utilization
Employee
participation
Quality
Facilitates cross-training
Can easily adjust production volumes
Easy to incorporate into JIT
Requires higher volumes to justify
May require more capital for equipment
Process-Oriented
Example
You work in facilities engineering. You
want to find the cost of this layout. The
cost of moving 1 load between adjacent
dept. is $1. The cost between
nonadjacent dept. is $2.
Dept. 1
Dept. 4
Dept. 2
Dept. 5
Dept. 3
Dept. 6
40 ft.
60 ft.
From-to-Matrix
1
1
2
Dept.
2
50
Department
3
4
5
6
100
20
30
50
10
20
100
50
3
4
Number of Trips
50
20
50
10
20
50
4
30
100
5
1
1
1
4
4
4
2
2
3
3
2
6
2
3
5
5
3
6
Total Cost
$
$
$
$
$
$
$
$
$
200
50
40
50
40
50
10
30
100
$570
50
100
10
50
20
20
4
50
100
6
1
1
1
4
4
4
2
2
3
2
3
6
2
3
5
5
3
6
Total Cost
$
$
$
$
$
$
$
$
$
50
100
20
50
40
50
10
60
100
$480
Line Balancing
Situation: Assembly-line production.
Many tasks must be performed, and the sequence
is flexible
Parts at each station same time
Tasks take different amounts of time
How to give everyone enough, but not too much
work for the limited time.
Product-Oriented Layout
Operations
Belt
Conveyor
Precedence Diagram
Draw precedence graph
(times in seconds)
A
20
E
C
10
F
3
15
H
12
12
Cycle Time
The more units you want to produce per hour,
the less time a part can spend at each
station.
Cycle time = time spent at each spot
CT =
Number of Workstations
Given required cycle time, find out the theoretical
minimum number of stations
Nt =
Assignments
Assign tasks by choosing tasks:
with largest number of following tasks
OR by longest time to complete
Number of Following
Tasks
Nodes # after
C 6
D 5
A 4
B,E,F 3
G,H 2
I 1
Precedence Diagram
Draw precedence graph
(times in seconds)
A
20
E
C
10
F
3
15
H
12
12
Number of Following
Tasks
Nodes #
after
A 4
B,E,F 3
G,H 2
I 1
Precedence Diagram
E cannot be added to A, but E can be added to C&D.
A
20
E
C
10
F
3
15
H
12
12
Precedence Diagram
Next priority B can be added to A.
A
20
E
C
10
F
3
15
H
12
12
Precedence Diagram
Next priority B can be added to A.
Next priority F cant be added to either.
A
20
E
C
10
F
3
15
H
12
12
Number of Following
Tasks
Nodes #
after
G,H 2
I 1
Precedence Diagram
G can be added to F.
H cannot be added.
A
20
E
C
10
F
3
15
H
12
12
Precedence Diagram
I is next, and can be added to H, but J cannot be
added also.
A
20
E
C
10
F
3
15
H
12
12
Calculate Efficiency
We know that at least 4 workstations will be
needed. We needed 5.
Efficiencyt =
= 97 / ( 5 * 25 ) = 0.776
We are paying for 125 minutes of work, where it
only takes 97.
Precedence Diagram
Try choosing longest activities first.
A is first, then G, which cant be added to A.
A
20
E
C
10
F
3
15
H
12
12
Precedence Diagram
H and I both take 12, but H has more coming after it,
then add I.
A
20
E
C
10
F
3
15
H
12
12
Precedence Diagram
D is next, followed by E, so we combine them, but we
could have combined E&G. Well try that later.
A
20
E
C
10
F
3
15
H
12
12
Precedence Diagram
J is next, all alone, followed by C and B.
A
20
E
C
10
F
3
15
H
12
12
Precedence Diagram
F is last. We end up with 6 workstations.
A
20
E
C
10
F
3
15
H
12
12
Precedence Diagram
Go back and try combining G and E instead of D and
E.
A
20
E
C
10
F
3
15
H
12
12
Precedence Diagram
J is next, all alone. C is added to D, and B is added
to A.
A
20
E
C
10
F
3
15
H
12
12
Can we do better?
A
20
E
C
10
F
3
15
H
12
12
Precedence Diagram
F can be added to C&D. Five WS again.
A
20
E
C
10
F
3
15
H
12
12
Reduced CT
Efficiency = 97/100 = 0.97. Much better.
If we set CT = 20, we can produce 3 units per
hour.
Goal of 32 units can be produced in 20 * 32 = 640
minutes.
Significant savings over original 800 minutes.
Can we do better?
If we have to use 5 stations, we can get a solution
with CT = 20.
A
20
E
C
10
F
3
15
H
12
12
Calculate Efficiency
With 5 WS at CT = 20
Efficiencyt =
= 97 / ( 5 * 20 ) = 0.97
We are paying for 100 minutes of work, where it
only takes 97.
Warehouse Layout
Design balances space
(cube) utilization & handling
cost
Similar to process layout
Warehouse Flow
Receiving
Shipping
Warehouse Layout
Try to organize storage in such a way that order pickers
can move through the product in a logical and timely
manner.
Warehouse Layout
Cross-Docking
In-coming
Transferring
goods
from incoming
trucks at
receiving docks
to outgoing trucks
at shipping docks
Avoids placing
goods into
storage
Outgoing
Retail/Service Layout
Design maximizes product exposure to customers,
profitability per square foot
Decision variables
Types
Grid design
Free-flow design
Video
Retail/Service Layout
Grid Design
Grocery Store
Meat
Milk
Bread
Office
Carts
Checkout
Retail/Service Layout
Free-Flow Design
Apparel Store
Trans.
Counter
Feature
Display
Table
Retail Store
Flow Guidelines
Retail Store
Flow Guidelines
Meat
Milk
Produce
Peanut
Butter
Cereal
Retail Store
Flow Guidelines
Quality of produce
section important in
customer decisions
about which stores to
visit, so produce is often
prominently displayed
upon entrance
People like to see what
theyre looking for, not
read signs
Cereal
Peanut
Butter
produce
Retail Store
Flow Guidelines
Retail Store
Flow Guidelines
Example: P&G
2 ft.
SUAVE
SUAVE
VO-5
PERT
VO-5
PERT
PERT
VO-5
VO-5
VO-5
PERT
5 facings
PERT
Computerized tool
for shelf-space
management
Generated from
stores scanner
data on sales
Often supplied by
manufacturer
Shelf Placement
Companies prefer to be at eye-level or at childreaching level
Close to leading brands or high-draw items: snack
foods next to the peanut butter or across from the
cereal:
Lots of kids visit the area
Slotting Fees
Manufacturer pays retailer to get a product
into a store
35,000 new grocery products per year
Grocery stores often stock 30,000 items
Impossible to evaluate all new products to
choose the best new ones
Slotting fees guarantee grocer profits on a
product, help balance risk of trying unknown
product.
Grocery is a narrow margin business, slotting
fees can represent a significant revenue
source.
Slotting Fees
Senate Small Business Committee held
hearings on them in 2000.
Industry refused to cooperate with
GAO.
Growers of produce (not just brand
names) now getting involved and
complaining.
Small businesses claim they cant
afford the big payments big companies
can make.
Advocates say small companies can
Perimeter Items
People follow perimeter pattern
Sale items on end everyone sees
Half of a stores profit comes from
items on the perimeter
Breakfast cereal brings in the most
dollars per square foot
Manufacturer incentives increase
profitability of soft drinks
Anchors at ends of a section: milk
and butter at opposite ends of dairy
case