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Module 6 - Layout Decisions

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Module 6 - Layout Decisions

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Chapter Outline

GLOBAL COMPANY PROFILE: McDONALD'S

The Strategic Importance of Layout

Decisions 376
Types of Layout 376
Office Layout 378
Retail Layout 379
Warehousing and Storage Layouts 381
Fixed-Position Layout 382
Process-Oriented Layout 383
Work Cells 388
Repetitive and Product-Oriented
Layout 392 ~ Design of Goods and Services
~ Managing Quality
~ Process Strategy
~ location Strategies
~ layout Strategies
~ Human Resources
~ Supply-Chain Management
~ Inventory Management
~ Scheduling
~ Maintenance

373
GLOBAL COMPANY PROFILE: McDONALD'S

McDONALD'S LOOKS FOR COMPETITIVE ADVANTAGE THROUGH LAYOUT

nits half-century of existence, McDonald's Airlines was the first airline to provide self-service

I revolutionized the restaurant industry by inventing

the limited-menu fast-food restaurant. It has also
made seven major innovations. The first, the
introduction of indoor seating (1950s), was a layout
issue, as was the second, drive-through windows
airport check-in, in 1996. Most passengers of the
major airlines now check themselves in for flights.
Kiosks take up less space than an employee and
reduce waiting line time.
Now, McDonald's is working on its seventh

(1970s). The third, adding breakfasts to the menu innovation, and not surprisingly, it also deals with

(1980s), was a product strategy. The fourth, adding restaurant layout. The company, on an unprecedented

play areas (late 1980s), was again a layout decision. scale, is redesigning all 30,000 eateries around the

In the 1990s, McDonald's completed its fifth globe to take on a 21 st century look. The dining area

innovation, a radically new redesign of the kitchens in will be separated into three sections with distinct

its 14,000 North America outlets to facilitate a mass personalities: (1) the "linger" zone focuses on young

customization process. Dubbed the "Made by You" adults and offers comfortable furniture and Wi-Fi

kitchen system, sandwiches were assembled to order connections; (2) the "grab and go" zone features tall

with the revamped layout. counters, bar stools, and plasma TVs; and (3) the

In 2004, the chain began the rollout of its sixth "flexible" zone has colorful family booths, flexible

innovation, a new food ordering layout: the self-service seating, and kid-oriented music. The cost per outlet:

kiosk. Self-service kiosks have been infiltrating the a whopping $300,000-$400,000 renovation fee.

service sector since the introduction of ATMs in 1985 As McDonald's has discovered, facility layout is

(there are over 1.5 million ATMs in banking). Alaska indeed a source of competitive advantage.

McDonald's finds that kiosks reduce both space requirements and waiting; order taking is faster. An added benefit is that
customers like them. Also, kiosks are reliable-they don't call in sick. And, most importantly, sales are up 10%-15% (an
average of $1) when a customer orders from a kiosk, which consistently recommends the larger size and other extras.

374
~ The redesigned kitchen of a
McDonald's in Manhattan. The more
efficient layout requires less labor,
reduces waste, and provides faster
service. A graphic of this "assembly
line" is shown in Figure 9.12

Linger Zone T
Cozy armchairs and sofas, Grab & Go Zone T
plus Wi-Fi connections, This section has tall counters
make these areas attractive with bar stools for customers
to those who want to hang who eat alone. Plasma TVs
out and socialize. keep them company.

Flexible Zone A
Booths with colorful
fabric cushions make
up the area geared to
family and larger
groups. Tables and
chairs are movable.

McDONALD'S •

375
376 PART 2 Designing Operations

Chapter 9 Learning Objectives

L01: Discuss important issues in LOS: Explain how to achieve a good
office layout 378 process-oriented facility layout 384

L02: Define the objectives of retail layout 379 L06: Define work cell and the
requirements of a work cell 388
L03: Discuss modern warehouse
management and terms such as ASRS, L07: Define product-oriented layout 392
cross-docking, and random stocking 381
L08: Explain how to balance
L04: Identify when fixed-position production flow in a repetitive or
layouts are appropriate 383 product-oriented facility 393

THE STRATEGIC IMPORTANCE OF LAYOUT DECISIONS

Layout is one of the key decisions that determines the long-run efficiency of operations. Layout has
numerous strategic implications because it establishes an organization's competitive priorities in
regard to capacity, processes, flexibility, and cost, as well as quality of work life, customer contact,
and image. An effective layout can help an organization achieve a strategy that supports differenti-
ation, low cost, or response. Benetton, for example, supports a differentiation strategy by heavy
investment in warehouse layouts that contribute to fast, accurate sorting and shipping to its 5,000
outlets. Wal-Mart store layouts support a strategy of low cost, as do its warehouse layouts.
Hallmark's office layouts, where many professionals operate with open communication in work
cells, support rapid development of greeting cards. The objective of layout strategy is to develop an
effective and efficient layout that will meet the firm's competitive requirements. These firms have
done so.
In all cases, layout design must consider how to achieve the following:

• 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 (whatever the layout is now, it will need to change).

In our increasingly short-life-cycle, mass-customized world, layout designs need to be viewed as

dynamic.This means considering small, movable, and flexible equipment. Store displays need to
be movable, office desks and partitions modular, and warehouse racks prefabricated. To make
quick and easy changes in product models and in production rates, operations managers must
design flexibility into layouts. To obtain flexibility in layout, managers cross train their workers,
maintain equipment, keep investments low, place workstations close together, and use small,
movable equipment. In some cases, equipment on wheels is appropriate, in anticipation of the
next change in product, process, or volume.

TYPES OF LAYOUT
Layout decisions include the best placement of machines (in production settings), offices and
desks (in office settings), or service centers (in settings such as hospitals or department stores).
An effective layout facilitates the flow of materials, people, and information within and between
areas. To achieve these objectives, a variety of approaches has been developed. We will discuss
seven of them in this chapter:

1. Office layout: Positions workers, their equipment, and spaces/offices to provide for move-
ment of information.
2. Retail layout: Allocates shelf space and responds to customer behavior.
3. Warehouse layout: Addresses trade-offs between space and material handling.
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).
Chapter 9 Layout Decisions 377

T TABLE 9.1 layout Strategies

Objectives Examples

Office Locate workers requiring frequent Allstate Insurance

contact close to one another Microsoft Corp.

Retail Expose customer to high-margin Kroger's Supermarket

items Walgreen's
Bloomingdale's
Warehouse (storage) Balance low-cost storage with Federal-Mogul's warehouse
low cost material handling The Gap's distribution center
Project (fixed position) Move material to the limited storage Ingall Ship Building Corp.
areas around the site Trump Plaza
Pittsburgh Airport
Job Shop (process Manage varied material flow for Arnold Palmer Hospital
oriented) each product Hard Rock Cafe
Olive Garden
Work Cell (product Identify a product family, build Hallmark Cards
families) teams, cross train team members Wheeled Coach
Standard Aero
Repetitive/Continuous Equalize the task time at each Sony's TV assembly line
(product oriented) workstation Toyota Scion

6. Work-eel! 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 utilization in repetitive or
continuous production.
Examples for each of these classes of layouts are noted in Table 9.l.
Because only a few of these seven classes can be modeled mathematically, layout and design
of physical facilities are still something of an art. However, we do know that a good layout
requires determining the following:

• Material handling equipment: Managers must decide about equipment to be used, including
conveyors, cranes, automated storage and retrieval systems, and automatic carts to deliver and
store material.
• Capacity and space requirements: Only when personnel, machines, and equipment require-
ments are known can managers proceed with layout and provide space for each component. In
the case of office work, operations managers must make judgments about the space require-

This open office offers a large shared

space that encourages employees to
interact. Before Steelcase, the office
furniture maker, went to an open
office system, 80% of its office space
was private; now it is just 20%
private. The CEO even went from a
private 700-square-foot office to a
48-square-foot enclosure in an open
area. This dramatically increases
unplanned and spontaneous
communication between employees.
378 PART 2 Designing Operations

ments for each employee. It may be a 6 X 6-foot cubicle plus allowance for hallways, aisles,
rest rooms, cafeterias, stairwells, elevators, and so forth, or it may be spacious executive offices
and conference rooms. Management must also consider allowances for requirements that
address safety, noise, dust, fumes, temperature, and space around equipment and machines.
• Environment and aesthetics: Layout concerns often require decisions about windows, planters,
and height of partitions to facilitate air flow, reduce noise, provide privacy, and so forth.
• Flows of information: Communication is important to any organization and must be facili-
tated by the layout. This issue may require decisions about proximity as well as decisions
about open spaces versus half-height dividers versus private offices.
• Cost of moving between various work areas: There may be unique considerations related to
moving materials or to the importance of having certain areas next to each other. For example,
moving molten steel is more difficult than moving cold steel.

OFFICE LAYOUT
Office layout Office layouts require the grouping of workers, their equipment, and spaces to provide for com-
The grouping of workers, their fort, safety, and movement of information. The main distinction of office layouts is the impor-
equipment, and spaces/offices tance placed on the flow of information. Office layouts are in constant flux as the technological
to provide for comfort, safety,
and movement of information.
change sweeping society alters the way offices function.
Even though the movement of information is increasingly electronic, analysis of office layouts
still requires a task-based approach. Paper correspondence, contracts, legal documents, confidential
patient records, and hard-copy scripts, artwork, and designs still playa major role in many offices.
Managers therefore examine both electronic and conventional communication patterns, separation
needs, and other conditions affecting employee effectiveness. A useful tool for such an analysis is
the relationship chart shown in Figure 9.l. This chart, prepared for an office of product designers,
LOi: Discuss important indicates that the chief marketing officer must be (I) near the designers' area, (2) less near the sec-
issues in office layout retary and central files, and (3) not at all near the copy center or accounting department.
General office-area guidelines allot an average of about 100 square feet per person (including
corridors). A major executive is allotted about 400 square feet, and a conference room area is
based on 25 square feet per person.
On the other hand, some layout considerations are universal (many of which apply to factories
as well as to offices). They have to do with working conditions, teamwork, authority, and status.
Should offices be private or open cubicles, have low file cabinets to foster informal communica-
tion or high cabinets to reduce noise and contribute to privacy? (See the Steelcase photo on the
previous page). Should all employees use the same entrance, rest rooms, lockers, and cafeteria?
As mentioned earlier, layout decisions are part art and part science.
As a final comment on office layout, we note two major trends. First, technology, such as cell
phones, iPods, faxes, the Internet, laptop computers, and PDAs, allows increasing layout flexibil-
ity by moving information electronically and allowing employees to work offsite. Second, mod-
ern firms create dynamic needs for space and services.

~ FIGURE 9.1
Office Relationship Chart Value CLOSENESS

Source. Adapted from Richard Muther, CEO 6bsolutely

A necessary
Simplified Systematic Layout Planning,
3rd ed. (Kansas City, Mgt & Ind'i 2 Chief marketing officer Especially
Research Publications). Used by E important
permission of the publisher. 3 Designers' area
I important
4 Secretary
Qrdinary
0 OK
5 Sales area

6 Central files U l1nimportant

7 Computer services X !"-lotdesirable

8 Copy center

9 Accounting
Chapter 9 Layout Decisions 379

Here are two examples: I

• When Deloitte & Touche found that 30% to 40% of desks were empty at any given time, the firm
developed its "hoteling programs." Consultants lost their permanent offices; anyone who plans to
be in the building (rather than out with clients) books an office through a "concierge," who hangs
that consultant's name on the door for the day and stocks the space with requested supplies.
• Cisco Systems cut rent and workplace service costs by 37% and saw productivity benefits of
$2.4 billion per year by reducing square footage, reconfiguring space, creating movable,
everything-on-wheels offices, and designing "get away from it all" innovation areas.

AUTHOR COMMENT
RETAIL LAYOUT The goal in a retail layout is to
maximize prolit per square
Retail layouts are based on the idea that sales and profitability vary directly with customer expo-
loot of store space.
sure to products. Thus, most retail operations managers try to expose customers to as many prod-
ucts as possible. Studies do show that the greater the rate of exposure, the greater the sales and
the higher the return on investment. The operations manager can change exposure with store Retail layout
arrangement and the allocation of space to various products within that arrangement. An approach that addresses
flow, allocates space, and
Five ideas are helpful for determining the overall arrangement of many stores: responds to customer behavior
1. Locate the high-draw items around the periphery of the store. Thus, we tend to find dairy
products on one side of a supermarket and bread and bakery products on another. An exam-
ple of this tactic is shown in Figure 9.2.
2. Use prominent locations for high-impulse and high-margin items. Best Buy puts fast-growing,
high-margin digital goods-such as cameras and DVDs-in the front and center of its stores.
3. Distribute what are known in the trade as "power items"-items that may dominate a purchas-
ing trip-to both sides of an aisle, and disperse them to increase the viewing of other items.
4. Use end-aisle locations because they have a very high exposure rate.
S. Convey the mission of the store by carefully selecting the position of the lead-off depart-
ment. For instance, if prepared foods are part of a supermarket's mission, position the bak-
ery and deli up front to appeal to convenience-oriented customers. Wal-Mart's push to L02: Define the objectives
increase sales of clothes means those departments are in broad view upon entering a store. of retail layout

Once the overall layout of a retail store has been decided, products need to be arranged for
sale. Many considerations go into this arrangement. However, the main objective of retail layout
is to maximize profitability per square foot of floor space (or, in some stores, on linear foot of
shelf space). Big-ticket, or expensive, items may yield greater dollar sales, but the profit per
square foot may be lower. Computerized programs are available to assist managers in evaluating
the profitability of various merchandising plans for hundreds of categories: this technique is
known as category management. Slotting fees
An additional, and somewhat controversial, issue in retail layout is called slotting. Slotting Fees manufacturers pay to get
fees are fees manufacturers pay to get their goods on the shelf in a retail store or supermarket shelf space for their products .

.•••FIGURE9.2
Store Layout with Dairy and
Bakery, High-Draw Items, in
Different Areas of the Store

l"Square Feet. Oh, How Square!" Business Week (July 3, 2006): 100-101.
380 PART 2 Designing Operations

Trying to penetrate urban areas that

have lofty land prices and strong
antidevelopment movements, Wal-
Mart is changing its layout to up, not
out. A new generation of multi-level
stores take only one-third the space
of the traditional 25-acre swaths.
Here, in the EI Cajon, California,
store, Wal-Mart trained workers to
help shoppers confused by the
device next to the escalator that
carries shopping carts from one floor
to another.

chain. The result of massive new-product introductions, retailers can now demand up to $25,000
to place an item in their chain. During the last decade, marketplace economics, consolidations,
and technology have provided retailers with this leverage. The competition for shelf space is
advanced by pas systems and scanner technology, which improve supply-chain management and
inventory control. Many small firms question the legality and ethics of slotting fees, claiming the
fees stifle new products, limit their ability to expand, and cost consumers money. Wal-Mart is one
of the few major retailers that does not demand slotting fees. This removes the barrier to entry that
small companies usually face. (See the Ethical Dilemma at the end of this chapter.)

Servicescapes
Although the main objective of retail layout is to maximize profit through product exposure, there
Servicescape are other aspects of the service that managers consider. The term servicescape describes the physi-
The physical surroundings in cal surroundings in which the service is delivered and how the surroundings have a humanistic effect
which a service takes place, and on customers and employees. To provide a good service layout, a firm considers three elements:
how they affect customers and
employees. 1. Ambient conditions, which are background characteristics such as lighting, sound, smell,
and temperature. All these affect workers and customers and can affect how much is spent
and how long a person stays in the building.
2. Spatial layout and functionality, which involve customer circulation path planning, aisle
characteristics (such as width, direction, angle, and shelf spacing), and product grouping.
3. Signs, symbols, and artifacts, which are characteristics of building design that carry social
significance (such as carpeted areas of a department store that encourage shoppers to slow
down and browse).

A critical element contributing to the

bottom line at Hard Rock Cafe is
the layout of each cafe's retail shop
space. The retail space, from 600 to
1,300 square feet in size, is laid out
in conjunction with the restaurant
area to create the maximum traffic
IIII
flow bffefforeanfd aftl.kerehating.The
payo s or ca es let IS one In
'-!J
I London are huge. Almost half of a
cafe's annual sales are generated
from these small shops, which have
very high retail sales per square foot.
Chapter 9 Layout Decisions 381

Examples of each of these three elements of servicescape are:

• Ambient conditions: Fine-dining restaurants with linen tablecloths and candlelit atmosphere;
Mrs. Field's Cookie bakery smells permeating the shopping mall; leather chairs at Starbucks.
• Layout/functionality: Kroger's long aisles and high shelves; Best Buy's wide center aisle.
• Signs, symbols, and artifacts: Wal-Mart's greeter at the door; Hard Rock Cafe's wall of guitars;
Disneyland's entrance looking like hometown heaven.

AUTHOR COMMENT
WAREHOUSING AND STORAGE LAYOUTS In warehouselayout, we want
to maximizeuse of the whole
The objective of warehouse layout is to find the optimum trade-off between handling cost and costs
building-from floor to
associated with warehouse space. Consequently, management's task is to maximize the utilization of ceiling.
the total "cube" of the warehouse-that is, utilize its full volume while maintaining low material han-
dling costs. We define material handling costs as all the costs related to the transaction. This consists Warehouse layout
of incoming transport, storage, and outgoing transport of the materials to be warehoused. These costs A design that attempts to
include equipment, people, material, supervision, insurance, and depreciation. Effective warehouse minimize total cost by
layouts do, of course, also minimize the damage and spoilage of material within the warehouse. addreSSingtrade-offs between
space and material handing.
Management minimizes the sum of the resources spent on finding and moving material plus
the deterioration and damage to the material itself. The variety of items stored and the number of
items "picked" has direct bearing on the optimum layout. A warehouse storing a few unique
items lends itself to higher density than a warehouse storing a variety of items. Modern ware-
house management is, in many instances, an automated procedure using automated storage and
retrieval systems (ASRSs).
The Stop & Shop grocery chain, with 350 supermarkets in New England, has recently com-
pleted the largest ASRS in the world. The 1.3-million-square-foot distribution center in
Freetown, Massachusetts, employs 77 rotating-fork automated storage and retrieval machines.
These 77 cranes each access 11,500 pick slots on 90 aisles-a total of 64,000 pallets of food. The
Wolfsburg, Germany parking garage photo (below) indicates that an ASRS can take many forms.
An important component of warehouse layout is the relationship between the receiving/ L03: Discuss modern
unloading area and the shipping/loading area. Facility design depends on the type of supplies warehouse management and
unloaded, what they are unloaded from (trucks, rail cars, barges, and so on), and where they are terms such as ASRS, cross-
unloaded. In some companies, the receiving and shipping facilities, or docks, as they are called, docking, and random
are even in the same area; sometimes they are receiving docks in the morning and shipping docks stocking
in the afternoon.

Automated storage and retrieval systems

are not found only in traditional warehouses.
This parking garage in Wolfsburg, Germany,
occupies only 20% of the space of a
traditionally designed garage. The ASRS
"retrieves" autos in less time, without the
potential of the cars being damaged by an
attendant.
382 PART:2 Designing Operations

Cross-Docking
Cross-docking Cross-docking means to avoid placing materials or supplies in storage by processing them as
Avoiding the placement of they are received. In a manufacturing facility, product is received directly to the assembly line. In
materials or supplies in storage a distribution center, labeled and presorted loads arrive at the shipping dock for immediate
by processing them as they are
received for shipment. rerouting, thereby avoiding formal receiving, stocking/storing, and order-selection activities.
Because these activities add no value to the product, their elimination is 100% cost savings. Wal-
INBOUND Mart, an early advocate of cross-docking, uses the technique as a major component of its contin-
uing low-cost strategy. With cross-docking, Wal-Mart reduces distribution costs and speeds
restocking of stores, thereby improving customer service. Although cross-docking reduces
product handling, inventory, and facility costs, it requires both (1) tight scheduling and (2)
accurate inbound product identification.

Random Stocking
Automatic identification systems (AISs), usually in the form of bar codes, allow accurate
and rapid item identification. When automatic identification systems are combined with
effective management information systems, operations managers know the quantity and
location of every unit. This information can be used with human operators or with auto-
matic storage and retrieval systems to load units anywhere in the warehouse-randomly.
OUTBOUND
Accurate inventory quantities and locations mean the potential utilization of the whole facil-
ity because space does not need to be reserved for certain stock-keeping units (SKUs) or part fam-
Random stocking ilies. Computerized random stocking systems often include the following tasks:
Used in warehousing to locate
stock wherever there is an open 1. Maintaining a list of "open" locations
location. 2. Maintaining accurate records of existing inventory and its locations
3. Sequencing items to minimize the travel time required to "pick" orders
4. Combining orders to reduce picking time
5. Assigning certain items or classes of items, such as high-usage items, to particular ware-
house areas so that the total distance traveled within the warehouse is minimized

Random stocking systems can increase facility utilization and decrease labor cost, but they
require accurate records.

Customizing
Although we expect warehouses to store as little product as possible and hold it for as short a
time as possible, we are now asking warehouses to customize products. Warehouses can be
Customizing places where value is added through customizing. Warehouse customization is a particularly
Using warehousing to add value useful way to generate competitive advantage in markets where products have multiple configu-
to a product through component rations. For instance, a warehouse can be a place where computer components are put together,
modification, repair, labeling,
and packaging. . software loaded, and repairs made. Warehouses may also provide customized labeling and pack-
aging for retailers so items arrive ready for display.
Increasingly, this type of work goes on adjacent to major airports, in facilities such as the
FedEx terminal in Memphis. Adding value at warehouses adjacent to major airports also facili-
tates overnight delivery. For example, if your computer has failed, the replacement may be sent to
you from such a warehouse for delivery the next morning. When your old machine arrives back at
the warehouse, it is repaired and sent to someone else. These value-added activities at "quasi-
warehouses" contribute to strategies of differentiation, low cost, and rapid response.

AUTHOR COMMENT
Fixed-position layout brings ~ FIXED-POSITION LAYOUT
all the workers and materials In a fixed-position layout, the project remains in one place and workers and equipment come to
to the project's site.
that one work area. Examples of this type of project are a ship, a highway, a bridge, a house, and
an operating table in a hospital operating room.
Fixed-position layout
The techniques for addressing the fixed-position layout are complicated by three factors.
A system that addresses the
layout requirements of First, there is limited space at virtually all sites. Second, at different stages of a project, different
stationary projects. materials are needed; therefore, different items become critical as the project develops. Third, the
volume of materials needed is dynamic. For example, the rate of use of steel panels for the hull
of a ship changes as the project progresses.

----- -
Chapter 9 Layout Decisions 383

Here are three versions of the fixed-position

layout.
A house built via traditional fixed-position layout would be
constructed onsite, with equipment, materials, and workers brought
to the site. Then a "meeting of the trades" would assign space for
various time periods. However, the home pictured here can be buill
at a much lower cost. The house is built in two movable modules in
a factory. Scaffolding and hoists make the job easier, quicker, and
cheaper, and the indoor work environment aids labor productivity.

A service example of a fixed-position layout is an operating room;

the patient remains stationary on the table, and medical personnel
and equipment are brought to the site.

In shipbuilding, there is limited space next to the fixed-position

layout. Shipyards call these loading areas platens, and they are
assigned for various time periods to each contractor.

Because problems with fixed-position layouts are so difficult to solve well onsite, an alter- L04: Identify when fixed-
native strategy is to complete as much of the project as possible offsite. This approach is used position layouts are
in the shipbuilding industry when standard units-say, pipe-holding brackets-are assembled appropriate
on a nearby assembly line (a product-oriented facility). In an attempt to add efficiency to ship-
building, Ingall Ship Building Corporation has moved toward product-oriented production
when sections of a ship (modules) are similar or when it has a contract to build the same sec-
tion of several similar ships. Also, as the top photo on the page shows, many home builders are
moving from a fixed-position layout strategy to one that is more product oriented. About one-
third of all new homes in the U.S. are built this way. In addition, many houses that are built
onsite (fixed position) have the majority of components such as doors, windows, fixtures,
trusses, stairs, and wallboard built as modules with more efficient offsite processes.

PROCESS-ORIENTED LAYOUT Process-oriented layout

A layout that deals with low-
A process-oriented layout can simultaneously handle a wide variety of products or services. This
volume, high-variety production
is the traditional way to support a product differentiation strategy. It is most efficient when making' in which like machines and
products with different requirements or when handling customers, patients, or clients with different equipment are grouped together.
384 PART 2 Designing Operations

~ FIGURE 9.3 Surgery ER triage room Emergency room admissions

An Emergency Room Process Patient A-broken leg
layout Showing the Routing
01 Two Patients

Patient B-erratic heart

pacemaker

AUTHOR COMMENT
Laboratories
Patient A (broken leg)
proceeds (blue arrow) to ER
triage, to radiology, to
surgery, to a bed, to
pharmacy, to billing. Patient B
(pacemaker problem) moves
(red arrow) to ER triage, to
surgery, to pharmacy, to lab,
Radiology ER beds Pharmacy Billing/exit
to a bed, to billing.

needs. A process-oriented layout is typically the low-volume, high-variety strategy discussed in

Chapter 1. In this job-shop environment, each product or each small group of products undergoes a
different sequence of operations. A product or small order is produced by moving it from one
department to another in the sequence required for that product. A good example of the process-
VIDEO 9.1 oriented layout is a hospital or clinic. Figure 9.3 illustrates the process for two patients, A and B, at
Layout at Arnold Palmer Hospital an emergency clinic in Chicago. An inflow of patients, each with his or her own needs, requires
routing through admissions, laboratories, operating rooms, radiology, pharmacies, nursing beds,
and so on. Equipment, skills, and supervision are organized around these processes.
A big advantage of process-oriented layout is its flexibility in equipment and labor assign-
ments. The breakdown of one machine, for example, need not halt an entire process; work can be
transferred to other machines in the department. Process-oriented layout is also especially good
Job lots for handling the manufacture of parts in small batches, or job lots, and for the production of a
Groups or batches of parts wide variety of parts in different sizes or forms.
processed together. The disadvantages of process-oriented layout come from the general-purpose use of
the equipment. Orders take more time to move through the system because of difficult sched-
uling, changing setups, and unique material handling. In addition, general-purpose equipment
requires high labor skills, and work-in-process inventories are higher because of imbalances in
the production process. High labor-skill needs also increase the required level of training and
experience, and high work-in-process levels increase capital investment.
LOS: Explain how to When designing a process layout, the most common tactic is to arrange departments or work
achieve a good process- centers so as to minimize the costs of material handling. In other words, departments with large
oriented facility layout flows of parts or people between them should be placed next to one another. Material handling
costs in this approach depend on (1) the number of loads (or people) to be moved between two
departments during some period of time and (2) the distance-related costs of moving loads (or
people) between departments. Cost is assumed to be a function of distance between departments.
The objective can be expressed as follows:

II n
Minimize cost = LL Xi) Ci) (9-1)
i=l j=l

where n = total number of work centers or departments

i.] = individual departments
Xi) = number of loads moved from department i to department}
Ci) = cost to move a load between department i and department}

Process-oriented facilities (and fixed-position layouts as well) try to minimize loads, or trips, times
distance-related costs. The term Ci) combines distance and other costs into one factor. We thereby
assume not only that the difficulty of movement is equal but also that the pickup and setdown costs
are constant. Although they are not always constant, for simplicity's sake we summarize these data
(that is, distance, difficulty, and pickup and setdown costs) in this one variable, cost. The best way
to understand the steps involved in designing a process layout is to look at an example.

-- - ------------------- .....i
Chapter 9 Layout Decisions 385

Walters Company management wants to arrange the six departments of its factory in a way that will
, ..•EXAMPLE 1
minirnize interdepartmental material handling costs. They make an initial assumption (to simplify the Designing a
problem) that each department is 20 X 20 feet and that the building is 60 feet long and 40 feet wide.
process layout
APPROACH AND SOLUTION ~ The process layout procedure that they folJow involves six steps:

STEP 1: Construct a "from-to matrix" showing the flow of parts or materials from department to
department (see Figure 9.4).

Number of loads per week "'FIGURE 9.4

Assembly Painting Machine Receiving Shipping Interdepartmental Flow

Department (1) (2) Shop (3) (4 5 of Parts

Assembly (1) 50 100 0 0 20 AUTHOR COMMENT

The high flows between
1 and 3 and between3 and
Painting (2) 30 50 10 0 6 are immediatelyapparent.
Departments1, 3, and 6,
Machine Shop (3) therefore, should be
20 0 100
close together.

Receiving (4) 50 0

Shipping (5) 0

Testing (6)

STEP 2: Determine the space requirements for each department, (Figure 9.5 shows available plant
space.)

Area A Area B Area C .•• FIGURE 9.5

Building Dimensions and
One Possible Department
Assembly Painting Machine Shop Layout
Department Department Department
(1) (2) (3)
AUTHOR COMMENT
Think of this as a starting,
40' initial, layout. Our goal is to
improve it, if possible.
Receiving Shipping Testing
Department Department Department
(4) (5) (6)

Area D Area E Area F

60'

STEP 3: Develop an initial schematic diagram showing the sequence of departments through
which parts must move. Try to place departments with a heavy flow of materials or parts
next to one another. (See Figure 9.6.)

100 .•• FIGURE 9.6

Interdepartmental Flow
Graph Showing Number of
Weekly Loads

AUTHOR COMMENT
This shows that 100loads
also move weekly between
Assemblyand the Machine
Shop. We will probably want
to movethesetwo
departmentscloser to one
another to minimize the flow
of parts through the factory.
l------------{ Shipping
50 (5)
386 PART 2 Designing Operations

STEP 4: Determine the cost of this layout by using the material-handling cost equation:

n n

Cost = 2:
i=12: XijCij
j=l

For this problem, Walters Company assumes that a forklift carries all interdepartmental loads. The cost
of moving one load between adjacent departments is estimated to be $1. Moving a load
between nonadjacent departments costs $2. Looking at Figures 9.4 and 9.5, we thus see that the han-
dling cost between departments I and 2 is $50 ($1 X 50 loads), $200 between departments 1 and 3
($2 X 100 loads), $40 between departments I and 6 ($2 X 20 loads), and so on. Work areas that are
diagonal to one another, such as 2 and 4, are treated as adjacent. The total cost for the layout shown
in Figure 9.6 is:

Cost = $50 + $200 + $40 + $30 + $50

(1 and 2) (1 and 3) (1 and 6) (2 and 3) (2 and 4)
+ $10 + $40 + $100 + $50
(2 and 5) (3 and 4) (3 and 6) (4 and 5)
= $570

STEP 5. By trial and error (or by a more sophisticated computer program approach that we dis-
cuss shortly), try to improve the layout pictured in Figure 9.5 to establish a better
arrangement of departments.

By looking at both the flow graph (Figure 9.6) and the cost calculations, we see that placing depart-
ments 1 and 3 closer together appears desirable. They currently are nonadjacent, and the high volume
of flow between them causes a large handling expense. Looking the situation over, we need to check
the effect of shifting departments and possibly raising, instead of lowering, overall costs.
One possibility is to switch departments.I and 2. This exchange produces a second depart-
mental flow graph (Figure 9.7), which shows a reduction in cost to $480, a savings in material
handling of $90:

Cost = $50 + $100 + $20 + $60 + $50

(1 and 2) (1 and 3) (1 and 6) (2 and 3) (2 and 4)
+ $10 + $40 + $100 + $50
(2 and 5) (3 and 4) (3 and 6) (4 and 5)
= $480
~ FIGURE 9.7
30
Second Interdepartmental
Flow Graph

AUTHOR COMMENT
Notice how Assembly and
Machine Shop are now
adjacent. Testing stayed close
to the Machine Shop also.

Suppose Walters Company is satisfied with the cost figure of $480 and the flow graph of Figure 9.7.
The problem may not be solved yet. Often, a sixth step is necessary:

STEP 6: Prepare a detailed plan arranging the departments to fit the shape of the building and its
nonmovable areas (such as the loading dock, washrooms, and stairways). Often this step
involves ensuring that the final plan can be accommodated by the electrical system, floor
loads, aesthetics, and other factors.

In the case of Walters Company, space requirements are a simple matter (see Figure 9.8) .
INSIGHT ~ This switch of departments is only one of a large number of possible changes. For a
six-department problem, there are actually 720 (or 6! = 6 X 5 X 4 X 3 X 2 X 1) potential arrange-
ments! In layout problems, we may not find the optimal solution and may have to be satisfied with a
"reasonable" one.

LEARNING EXERCISE ~ Can you improve on the layout in Figures 9.7 and 9.8? [Answer:
Yes, it can be lowered to $430 by placing Shipping in area A, Painting in area B, Assembly in area C,
Receiving in area D (no change), Machine Shop in area E, and Testing in area F (no change).]

Computer Software for Process-Oriented Layouts

The graphic approach in Example 1 is fine for small problems. It does not, however, suffice
for larger problems. When 20 departments are involved in a layout problem, more than
600 trillion different department configurations are possible. Fortunately, computer programs
have been written to handle large layouts. These programs often add sophistication with flow-
charts, multiple-story capability, storage and container placement, material volumes, time
analysis, and cost comparisons. Such programs include CRAFT (Computerized Relative
Allocation of Facilities Technique) (see Figure 9.9), Automated Layout Design program
(ALDEP), Computerized Relationship Layout Planning (CORELAP), and Factory Flow.
These programs tend to be interactive-that is, require participation by the user. And most
only claim to provide "good," not "optimal," solutions.

(a) (b) ..•••

fiGURE 9.9
In This Six-Department
A A A A B B D D D D B B Outpatient Hospital Example,
(a) CRAFT Has Rearranged
2 A A A A B B D D D D B B the Initial layout, with a Cost
of $20,100, into (b) the New
Legend: 3 D D D D D D D D D E E E
layout with a lower Cost of
r--
D A = X-ray/MRI rooms
D B = laboratories
4 C ci D D D D C ci D E E F
$14,390.

5 F F F F F D A A A A A F
D C = admissions AUTHOR COMMENT
CRAFT does this by
D D = exam rooms 6 E E E E E D A A A F F F .•..... systematically testing pairs of
departments to see if moving
D E = operating rooms TOTAL COST $20,100 TOTAL COST $14,390 them closer to each other
EST. COST REDUCTION .00 EST. COST REDUCTION 5,710 lowers total cost.
D F = recovery rooms ITERATION 0 ITERATION 3
388 PART 2 Designing Operations

AUTHOR COMMENT
Using work cells is a big step
WORK CELLS
toward manufacturing A work cell reorganizes people and machines that would ordinarily be dispersed in various depart-
efficiency. Theycan make ments into a group so that they can focus on making a single product or a group of related products
jobs more interesting,save
space,and cut inventory. (Figure 9.10). Cellular work arrangements are used when volume warrants a special arrangement
of machinery and equipment. In a manufacturing environment, group technology (Chapter 5) iden-
tifies products that have similar characteristics and lend themselves to being processed in a particu-
Work cell
lar work cell. These work cells are reconfigured as product designs change or volume fluctuates.
An arrangement of machines
and personnel that focuses on
Although the idea of work cells was first presented by R. E. Flanders in 1925, only with the increas-
making a single product or ing use of group technology has the technique reasserted itself. The advantages of work cells are:
family of related products.
1. Reduced work-in-process inventory because the work cell is set up to provide one-piece flow
from machine to machine.
2. Less floor space required because less space is needed between machines to accommodate
work-in-process inventory.
3. Reduced raw material and finished goods inventories because less work-in-process allows
more rapid movement of materials through the work cell.
4. Reduced direct labor cost because of improved communication among employees, better
material flow, and improved scheduling.
5. Heightened sense of employee participation in the organization and the product: employees
accept the added responsibility of product quality because it is directly associated with them
and their work cell.
6. Increased equipment and machinery utilization because of better scheduling and faster
LOG: Define work cell material flow.
and the requirements of a 7. Reduced investment in machinery and equipment because good utilization reduces the num-
work cell ber of machines and the amount of equipment and tooling.

Requirements of Work Cells

The requirements of cellular production include:

• Identification of families of products, often through the use of group technology codes or
equivalents
• A high level of training, flexibility, and empowerment of employees
• Being self-contained, with its own equipment and resources.
• Test (poka-yoke) at each station in the cell

Work cells have at least five advantages over assembly lines and process facilities:
(1) because tasks are grouped, inspection is often immediate; (2) fewer workers are needed;
(3) workers can reach more of the work area; (4) the work area can be more efficiently

Contemporary software
such as this from e-factory
(UGS Corp.) allows
operations managers to
quickly place and connect
symbols for factory
equipment for a full three-
dimensional view of the
layout. Such presentations
provide added insight into
the issues of facility layout
in terms of process,
material handling,
efficiency, and safety.
Chapter 9 Layout Decisions 389

Note in both (a) and (b) that U-shaped work cells can reduce material and employee <III FIGURE 9.10
movement. The U shape may also reduce space requirements, enhance communication,
cut the number of workers, and make inspection easier. Improving layouts by Moving
to the Work Cell Concept
(a)

Current layout-workers in
small closed areas.

Improved layout-cross-trained
workers can assist each other.
May be able to add a third worker
as added output is needed.

(b)

Current layout-straight lines make,

Improved layout-in U shape,
it hard to balance tasks because
workers have better access.
work may not be divided evenly.
Four cross-trained workers were
reduced to three.

balanced; and (5) communication is enhanced. Work cells are sometimes organized in a U
shape, as shown on the right side of Figure 9.10.
About half of U.S. plants with fewer than 100 employees use some sort of cellular system,
whereas 75% of larger plants have adopted cellular production methods. Bayside Controls in
Queens, New York, for example, has in the past decade increased sales from $300,000 per year
to $11 million. Much of the gain was attributed to its move to cellular manufacturing. As noted
in the OM in Action box, Canon has had similar success with work cells.

Staffing and Balancing Work Cells

Once the work cell has the appropriate equipment located in the proper sequence, the next task is
to staff and balance the cell. Efficient production in a work cell requires appropriate staffing.

OM in Action ~ Work Cells Increase Productivity at Canon

Look quickly at Canon's factory near Tokyo, and you might Employees are encouraged to work in ever-tighter cells,
think you stepped back a few decades. Instead of the swiftly with prizes given to those who free up the most space.
moving assembly lines you might expect to see in a high- Second, the cells enable Canon to change the product
cost, sophisticated digital camera and photo copier giant, mix more quickly to meet market demands for innovative
you see workers gathered in small groups called work cells. products-a big advantage as product life cycles become
Each cell is responsible for one product or a small family shorter and shorter.
of products. The product focus encourages employees to Third, staff morale has increased because instead of
exchange ideas about how to improve the assembly process. performing a single task over and over, employees are
They also accept more responsibility for their work. trained to put together whole machines. Some of Canon's
Canon's work cells have increased productivity by 30%. fastest workers are so admired that they have become TV
But how? celebrities.
First, conveyor belts and their spare parts take up A layout change that improves morale while increasing
space, an expensive commodity in Japan. The shift to productivity is a win-win for Canon.
the cell system has freed 12 miles of conveyor-belt
space at 54 plants and allowed Canon to close 29 parts Sources: The Wall Street Journal (September 27, 2004): R11; and Financial
warehouses, saving $280 million in real estate costs. Times (September 23,2003): 14.
390 PART 2 Designing Operations

Takttime This involves two steps. First, determine the takt time.? which is the pace (frequency) of produc-
Pace of production to meet tion units necessary to meet customer orders:
customer demands.
Takt time = Total work time available/Units required (9-2)

Second, determine the number of operators required. This requires dividing the total operation
time in the work cell by the takt time:

Workers required = Total operation time required/Takt time (9-3)

Example 2 considers these two steps when staffing work cells.

EXAMPLE 2 ~ Stephen Hall's company in Dayton makes auto mirrors. The major customer is the Honda plant nearby.
Staffing work cells Honda expects 600 mirrors delivered daily, and the work cell producing the mirrors is scheduled for 8
hours. Hall wants to determine the takt time and the number of workers required.

APPROACH ~ Hall uses Equations (9-2) and (9-3) and develops a work balance chart to help
determine the time for each operation in the work cell, as well as total time.

SOLUTION~

Takt time = (8 hours X 60 minutes)/600 units = 480/600 = .8 minute = 48 seconds

Therefore, the customer requirement is one mirror every 48 seconds.
The work balance chart in Figure 9.11 shows that 5 operations are necessary, for a total operation
time of 140 seconds:

Workers required = Total operation time required/Takt time

(50 + 45 + 10 + 20 + 15)/48
= 140/48 = 2.92

~ FIGURE 9.11
60
Work Balance Chart for
Mirror Production Vi' 50
GJ"C
E c::
.........
:;:::
8 40 I--

"CGJ
la ~ 30 -
"C"C

-n-
c::GJ
.l!!·3 20 -
000-
~ 10 -
r 1
Assemble Paint Test Label Pack for
shipping
Operations

INSIGHT ~ To produce one unit every 48 seconds will require 2.92 people. With three operators
this work cell will be producing one unit each 46.67 seconds (140 seconds/B employees = 46.67) and
617 units per day (480 minutes available X 60 seconds )/46.67 seconds for each unit = 617).
LEARNING EXERCISE ~ If testing time is expanded to 20 seconds, what is the staffing
requirement? [Answer: 3.125 employees.]

The Focused Work Center and, the Focused Factory

When a firm has identified a family of similar products that have a large and stable demand,
it may organize a focused work center. A focused work center moves production from a Focused work center
general-purpose, process-oriented facility to a large work cell that remains part of the present A permanent or semi-
plant. If the focused work center is in a separate facility, it is often called a focused factory. permanent product-oriented
arrangement of machines and
A fast-food restaurant is a focused factory-most are easily reconfigured for adjustments to personnel.
product mix and volume. Burger King, for example, changes the number of personnel and task
assignments rather than moving machines and equipment. In this manner, Burger King bal- Focused factory
ances the assembly line to meet changing production demands. In effect, the "layout" changes A facility designed to produce
similar products or
numerous times each day.
components.
The term focused factories may also refer to facilities that are focused in ways other than by
product line or layout. For instance, facilities may be focused in regard to meeting quality, new
product introduction, or flexibility requirements.
Focused facilities in both manufacturing and services appear to be better able to stay in tune
with their customers, to produce quality products, and to operate at higher margins. This is true
whether they are steel mills like CMC, Nucor, or Chaparral; restaurants like McDonald's and
Burger King; or a hospital like Arnold Palmer.
Table 9.2 summarizes our discussion of work cells, focused work centers, and focused factories.

....TABLE 9.2
Work Cell Focused Work Center Focused Factory Work Cells, Focused Work
Description A work cell is a temporary A focused work center is a A focused factory is a Centers, and the Focused
product-oriented Factory
permanent product- permanent facility to
arrangement of machines oriented arrangement of produce a product or
and personnel in what is machines and personnel component in a product-
ordinarily a process- in what is ordinarily a oriented facility. Many
oriented facility process-oriented facility of the focused factories
currently being built
were originally part of a
process-oriented facility
Example A job shop with machinery Pipe bracket manufacturing A plant to produce window
and personnel rearranged at a shipyard mechanisms or seat belts
to produce 300 unique for automobiles
control panels

3Mark Pagell and Steven A. Melnyk. "Assessing the Impact of Alternative Manufacturing Layouts in a Service Setting,"
Journal of Operations Management 22 (2004): 413-429.
392 PART 2 Designing Operations

AUTHOR COMMENT
Thetraditionalassemblyline
r-. REPETITIVE AND PRODUCT-ORIENTED LAYOUT
handlesrepetitiveproduction. Product-oriented layouts are organized around products or families of similar high-volume, low-
variety products. Repetitive production and continuous production, which are discussed in
Chapter 7, use product layouts. The assumptions are that:

1. Volume is adequate for high equipment utilization

L07: Define product- 2. Product demand is stable enough to justify high investment in specialized equipment
oriented layout 3. Product is standardized or approaching a phase of its life cycle that justifies investment in
specialized equipment
4. Supplies of raw materials and components are adequate and of uniform quality (adequately
standardized) to ensure that they will work with the specialized equipment

Fabrication line Two types of a product-oriented layout are fabrication and assembly lines. The fabrication
A machine-paced, product- line builds components, such as automobile tires or metal parts for a refrigerator, on a series of
orientedfacilityfor building machines, while an assembly line puts the fabricated parts together at a series of workstations.
components.
However, both are repetitive processes, and in both cases, the line must be "balanced": That is,
Assembly line the time spent to perform work on one machine must equal or "balance" the time spent to per-
Anapproachthat puts form work on the next machine in the fabrication line, just as the time spent at one workstation
fabricatedpartstogetherat a by one assembly-line employee must "balance" the time spent at the next workstation by the
seriesof workstations;usedin next employee. The same issues arise when designing the "disassembly lines" of slaughter-
repetitiveprocesses.
houses and automobile makers (see the OM in Action box "From Assembly Lines to Green
Disassembly Lines").
Fabrication lines tend to be machine-paced and require mechanical and engineering changes
to facilitate balancing. Assembly lines, on the other hand, tend to be paced by work tasks
assigned to individuals or to workstations. Assembly lines, therefore, can be balanced by moving
tasks from one individual to another. The central problem, then, in product-oriented layout plan-
ning is to balance the tasks at each workstation on the production line so that it is nearly the same
while obtaining the desired amount of output.
Management's goal is to create a smooth, continuing flow along the assembly line with a min-
imum of idle time at each workstation. A well-balanced assembly line has the advantage of high

OM in Action ~ From Assembly lines to Green Disassembly lines

Almost 100 years have passed since assembly lines were station," special tools puncture tanks and drain fluids, and
developed to make automobiles-and now we're developing the battery and gas tank are removed. Then on a semi-
disassembly lines to take them apart. Sprawling graveyards automated track, which includes a giant steel vise that can
of rusting cars and trucks bear testimony to the need for flip a 7,500-pound car upside-down, wheels, doors, hood,
automotive disassembly lines. But those graveyards are and trunk are removed; next come the interior items; then
slowly beginning to shrink as we learn the art of automobile plastic parts are removed and sorted for recycling; then
disassembly. New disassembly lines now take apart so glass and interior and trunk materials. Eventually the
many automobiles that recycling is the 16th-largest industry chassis is in a bale and sold as a commodity to minimills
in the U.S. The motivation for this disassembly comes from that use scrap steel.
many sources, including mandated industry recycling Disassembly lines are not easy. Some components, like
standards and a growing consumer interest in purchasing air bags, are hard to handle, dangerous, and take time to
cars based on how "green" they are. disassemble. Reusable parts are bar coded and entered
New car designs have traditionally been unfriendly to into a database. Various color-coded plastics must be
recyclers, with little thought given to disassembly. However, recycled differently to support being remelted and turned
manufacturers now design in such a way that materials can into new parts, such as intake manifolds. After the engines,
be easily reused in the next generation of cars. The 2009 transmissions, radios, and exhausts have been removed,
Mercedes S-class is 95% recyclable and already meets the the remaining metal parts of the disassembly line are
2015 EU standard. BMW has disassembly plants in Europe easier: with shredders and magnets, baseball-sized chunks
and Japan as well as U.S. salvage centers in New York, of metal are sorted. Assembly lines put cars together, and
Los Angeles, and Orlando. A giant 200,000-square-foot disassembly lines take them apart.
facility in Baltimore (called CARS) can disassemble up to Sources: The Wall Street Journal (April 29. 2008): AI, A9; The New York Times
30,000 vehicles per year. At CARS's initial "greening (September 19, 2005): D5; and Automotive Industry Trends (March 2004).
Chapter 9 Layout Decisions 393

personnel and facility utilization and equity among employees' work loads. Some union con-
tracts require that work loads be nearly equal among those on the same assembly line. The term
most often used to describe this process is assembly-line balancing. Indeed, the objective of the Assembly-line
product-oriented layout is to minimize imbalance in the fabrication or assembly line. balancing
The main advantages of product-oriented layout are: Obtaining output at each
workstation on a production line
1. The low variable cost per unit usually associated with high-volume, standardized products so delay is minimized.
2. Low material handling costs
3. Reduced work-in-process inventories
4. Easier training and supervision
5. Rapid throughput

The disadvantages of product layout are:

1. The high volume required because of the large investment needed to establish the process
2. Work stoppage at anyone point ties up the whole operation
3. A lack of flexibility when handling a variety of products or production rates

Because the problems of fabrication lines and assembly lines are similar, we focus our dis- VIDEO 9.2
cussion on assembly lines. On an assembly line, the product typically moves via automated Facility Layoutat WheeledCoach
Ambulances
means, such as a conveyor, through a series of workstations until completed. This is the
way fast-food hamburgers are made (see Figure 9.12), automobiles and some planes (see
the photo of the Boeing 737 on the next page) are assembled, television sets and ovens are
produced. Product-oriented layouts use more automated and specially designed equipment
than do process layouts.

Assembly-Line Balancing
Line balancing is usually undertaken to minimize imbalance between machines or personnel LOS: Explain how to
while meeting a required output from the line. To produce at a specified rate, management must balance production flow
know the tools, equipment, and work methods used. Then the time requirements for each assem- in a repetitive or product-
bly task (e.g., drilling a hole, tightening a nut, or spray-painting a part) must be determined. oriented facility
Management also needs to know the precedence relationship among the activities-that is, the
sequence in which various tasks must be performed. Example 3 shows how to turn these task
data into a precedence diagram.

Elapsed
0:00 0:11 0:31 0:45 1:30
time
Task time
11 20 14 0 45
(seconds)
1. Order 2. Bun toasting 3. Assembly with 4. Wrapping of patty 5. Order picked 6. Customer service
Task condiments with bun up immediately (order and payment)
to keep it fresh

L_e :

Order read on
a video screen

More personnel
lHeated
cabinet
Heated
landing
added during for the pad
busy periods grilled
patties
Toaster Condiments

.• FIGURE 9.12 McDonald's HamburgerAssembly line

394 PART 2 Designing Operations

The Boeing 737, the world's most popular

commercial airplane, is produced on a moving
production line, traveling at 2 inches a minute
through the final assembly process. The
moving line, one of several lean manufacturing
innovations at the Renton, Washington, facility,
has enhanced quality, reduced flow time,
slashed inventory levels, and cut space
requirements. Final assembly is only 11 days-
a time savings of 50% -and inventory is down
more than 55%. Boeing has expanded the
moving line concept to its 747 jumbo jet.

EXAMPLE 3 ~ Boeing wants to develop a precedence diagram for an electrostatic wing component that requires a total
Developing a assembly time of 66 minutes.

precedence diagram APPROACH ~ Staff gather tasks, assembly times, and sequence requirements for the component
for an assembly line in Table 9.3.

~TABLE 9.3 Task Must Follow

Precedence Data
Assembly Time Task Listed
for Wing Component
Task (minutes) Below
A 10 This means that
B II A>tasks Band E
C 5 B cannot be done
o 4 B until task A has
E 12 A been completed.
F 3 C,O
G 7 F
H 11 E
I -.1. G,H
Total time 66

SOLUTION ~ Figure 9.13 shows the precedence diagram.

~ FIGURE 9.13
Precedence Diagram

10 minutes
Chapter 9 Layout Decisions 395

INSIGHT ~ The diagram helps structure an assembly line and workstations, and it makes it easier
to visualize the sequence of tasks.

LEARNING EXERCISE ~ If task D had a second preceding task (C), how would Figure 9.13
change? [Answer: There would also be an arrow pointing from C to D.]

L Time for task i

;=1
Minimum number of workstations (9-5)
Cycle time

where n is the number of assembly tasks.

3. Balance the line by assigning specific assembly tasks to each workstation. An efficient bal-
ance is one that will complete the required assembly, follow the specified sequence, and
keep the idle time at each workstation to a minimum. A formal procedure for doing this is
the following:
a. Identify a master list of tasks.
b. Eliminate those tasks that have been assigned.
c. Eliminate those tasks whose precedence relationship has not been satisfied.
d. Eliminate those tasks for which inadequate time is available at the workstation.
e. Use one of the line-balancing "heuristics" described in Table 9.4. The five choices are
(1) longest task time, (2) most following tasks, (3) ranked positional weight, (4) shortest

.•• TABLE 9.4

1. Longest task (operation) time From the available tasks, choose the task with the largest (longest) time. layout Heuristics That May
2. Mostfollowing tasks From the available tasks, choose the task with the largest number of Be Used to Assign Tasks to
following tasks. Workstations in Assembly-
line Balancing
3. Ranked positional weight From the available tasks, choose the task for which the sum of the
times for each following task is longest. (In Example 4 we see that the
ranked positional weight of task C = 5(C) + 3(F) + 7(G) + 3(1) = 18,
whereas the ranked positional weight of task D = 4(0) + 3(F) + 7(G) +
3(1) =l7; therefore, C would be chosen first, using this heuristic.)
4. Shortest task (operations) time From the available tasks, choose the task with the shortest task time.
5. Least number of following tasks From the available tasks, choose the task with the least number of
subsequent tasks.

4Cycle time is the actual time to accomplish a task or process step. Several process steps may be necessary to complete
the product. Takt time, discussed earlier, is determined by the customer and is the speed at which completed units must
be produced to satisfy customer demand.
396 PART 2 Designing Operations

Heuristic task time, and (5) least number of following tasks. You may wish to test several of these
Problem solving using heuristics to see which generates the "best" solution-that is, the smallest number of
procedures and rules rather workstations and highest efficiency. Remember, however, that although heuristics pro-
than mathematical optimization.
vide solutions, they do not guarantee an optimal solution.

Example 4 illustrates a simple line-balancing procedure.

EXAMPLE 4 ~ On the basis of the precedence diagram and activity times given in Example 3, Boeing determines that
Balancing the there are 480 productive minutes of work available per day. Furthermore, the production schedule
requires that 40 units of the wing component be completed as output from the assembly line each day.
assembly line It now wants to group the tasks into workstations.

APPROACH ~ Following the three steps above, we compute the cycle time using Equation (9-4)
and minimum number of workstations using Equation (9-5), and we assign tasks to workstations-in
this case using the most following tasks heuristic.

SOLUTION~

480 minutes
Cycle time (in minutes)
40 units
= 12 minutes/unit

Total task time 66

Minimum number of workstations = ------
Cycle time 12
= 5.5 or 6 stations

Figure 9.14 shows one solution that does not violate the sequence requirements and that groups
tasks into six one-person stations. To obtain this solution, activities with the most following tasks were
moved into workstations to use as much of the available cycle time of 12 minutes as possible. The first
workstation consumes 10 minutes and has an idle time of 2 minutes.

~ FIGURE 9.14 Station 2 5 min

A Six-Station Solution
to the Line-Balancing
Problem

AUTHOR COMMENT
TasksC, D,and F can be
grouped together in one
workstation, provided that
the physical facilities and skill
levels meet the work
requirements.

Station 3 Station 5

INSIGHT ~ This is a reasonably well-balanced assembly line. The second workstation uses 11
minutes, and the third consumes the full 12 minutes. The fourth workstation groups three small
tasks and balances perfectly at 12 minutes. The fifth has 1 minute of idle time, and the sixth (con-
sisting of tasks G and I) has 2 minutes of idle time per cycle. Total idle time for this solution is
6 minutes per cycle.

LEARNING EXERCISE ~ If task I required 6 minutes (instead of 3 minutes), how would this
change the solution? [Answer: The cycle time would not change, and the theoretical minimum num-
ber of workstations would still be 6 (rounded up from 5.75), but it would take 7 stations to balance
the line.]

Boeing needs to calculate the balance efficiency for Example 4.

I ..•• EXAMPLE 5
APPROACH ~ Equation (9-6) is applied. Determining line
efficiency
SOLUTION ~ Efficiency = 66 minutes 66
= 91.7%
(6 stations) X (12 minutes) 72

Note that opening a seventh workstation, for whatever reason, would decrease the efficiency of the balance
to 78.6% (assuming that at least one of the workstations still required 12 minutes): '

66 minutes
Efficiency = = 78.6%
(7 stations) X (12 minutes)

INSIGHT ~ Increasing efficiency may require that some tasks be divided into smaller elements
and reassigned to other tasks. This facilitates a better balance between workstations and means higher
efficiency.

LEARNING EXERCISE ~ What is the efficiency if an eighth workstation is opened? [Answer:

Efficiency = 68.75%.]

In the case of slaughtering

operations, the assembly line is
actually a disassembly line. The line-
balancing procedures described in
this chapter are the same as for
an assembly line. The chicken-
processing plant shown here must
balance the work of several hundred
employees. The total labor content
in each of the chickens processed is
a few minutes.
398 PART 2 Designing Operations

CHAPTER SUMMARY
Layouts make a substantial difference in operating efficiency. times the number of trips. Product lay-
The seven layout situations discussed in this chapter are outs focus on reducing waste and the
(1) office, (2) retail, (3) warehouse, (4) fixed position, imbalance in an assembly line. Work
(5) process oriented, (6) work cells, and (7) product oriented. cells are the result of identifying a fam-
A variety of techniques have been developed to solve these ily of products that justify a special con-
layout problems. Office layouts often seek to maximize infor- figuration of machinery and equipment
mation flows, retail firms focus on product exposure, and that reduces material travel and adjusts imbalances with
warehouses attempt to optimize the trade-off between storage cross-trained personnel.
space and material handling cost. Often, the issues in a layout problem are so wide-ranging
The fixed-position layout problem attempts to minimize that finding an optimal solution is not possible. For this rea-
material handling costs within the constraint of limited son, layout decisions, although the subject of substantial
space at the site. Process layouts minimize travel distances research effort, remain something of an art.

Key Terms

Office layout (p. 378) Customizing (p. 382) Focused factory (p. 391)
Retail layout (p. 379) Fixed-position layout (p. 382) Fabrication line (p. 392)
Slotting fees (p. 379) Process-oriented layout (p. 383) Assembly line (p. 392)
Servicescape (p. 380) Job lots (p. 384) Assembly-line balancing (p. 393)
Warehouse layout (p. 381) Work cell (p. 388) Cycle time (p. 395)
Cross-docking (p. 382) Takt time (p. 390) Heuristic (p. 396)
Random stocking (p. 382) Focused work center (p. 391)

Ethical Dilemma
Although buried by mass custornization and a proliferation of new
products of numerous sizes and variations, grocery chains continue
to seek to maximize payoff from their layout. Their layout includes
a marketable commodity-shelf space-and they charge for it.
This charge is known as a slotting fee." Recent estimates are that
food manufacturers now spend some 13% of sales on trade
promotions, which is paid to grocers to get them to promote and
discount the manufacturer's products. A portion of these fees is for
slotting; but slotting fees drive up the manufacturer's cost. They
also put the small company with a new product at a disadvantage,
because small companies with limited resources are squeezed out
of the market place. Slotting fees may also mean that customers
may no longer be able to find the special local brand. How ethical
are slotting fees?

Discussion Questions
1. What are the seven layout strategies presented in this chapter? 5. What are the advantages and disadvantages of product layout?
2. What are the three factors that complicate a fixed-position layout? 6. What are the four assumptions (or preconditions) of establish-
3. What are the advantages and disadvantages of process layout? ing layout for high-volume, low-variety products?
4. How would an analyst obtain data and determine the number of 7. What are the three forms of work cells discussed in the textbook?
trips in: 8. What are the advantages and disadvantages of work cells?
(a) a hospital? 9. What are the requirements for a focused work center or focused
(b) a machine shop? factory to be appropriate?
(c) an auto-repair shop? 10. What are the two major trends influencing office layout?

*For an interesting discussion of slotting fees. see J. G. Kaikati and A. M. Kaikati, "Slotting and Promotional Allowances," Supply Chain Management I I,
no. 2 (2006): 140-147: or J. L. Stanton and K. C. Herbst. "Slotting Allowances," lnternational Journal ofRetail & Distribution Management 34, no. 2/3
(2006): 187-197.
Chapter 9 Layout Decisions 399

11. What layout variables would you consider particularly 14. Visit a local supermarket and sketch its layout. What are your
important in an office layout where computer programs are observations regarding departments and their locations?
written? 15. What is random stocking?
12. What layout innovations have you noticed recently in retail 16. What information is necessary for random stocking to work?
establishments? 17. Explain the concept of cross-docking.
13. What are the variables that a manager can manipulate in a retail 18. What is a heuristic? Name several that can be used in assembly-
layout? line balancing.

Using Software to Solve Layout Problems

In addition to the many commercial software packages available for addressing layout problems, Excel
OM and POM for Windows, both of which accompany this text, contain modules for the process prob-
lem and the assembly-line-balancing problem.

X Using Excel OM
Excel OM can assist in evaluating a series of department work assignments like the one we saw for the
Walters Company in Example l. The layout module can generate an optimal solution by enumeration or
by computing the "total movement" cost for each layout you wish to examine. As such, it provides a
speedy calculator for each flow-distance pairing.
Program 9.1 illustrates our inputs in the top two tables. We first enter department flows, then provide
distances between work areas. Entering area assignments on a trial-and-error basis in the upper left of
the top table generates movement computations at the bottom of the screen. Total movement is recalcu-
lated each time we try a new area assignment. It turns out that the assignment shown is optimal at 430
feet of movement.

~ PROGRAM 9.1 Using Excel OM's Process layout Module to Solve the Walters Company Problem in Example 1

A B C D E G H
1 Walters Company
2
Enter the load data and the cost data In the shaded areas Then either enter the area
3 layout names into which you want to place each department III the column labeled 'Asslgned
4 Work Area' or use the SOLVE button to find the opnrnal Iayout
5 Solve

6 Data
Assigned Load
7 Work Area Table Assembly Painting Machine Receiving Shipping Testing
8 Area A Assembly 50 100 20
I-::p-'-a
....
in=-ti-ng--'-il----t---~- 30 50 10
9 Area B
10 Area E Machine 20 100
11 Area C Receiving 50
12 Area F Shipping
13 Area D Testing
14
Assigned Cost
15 Area A Area B
Department~T~a~bl~e~-r~~-'~~~~~~~~~~~~~~~~~ Area C Area D Area E Area F
16 Assembly IcA_re.:...a=-A=---+-
__ -:-I __ --'-j--__ -:+
2 1t- __ +__
1 -'l2
17 Painting I':Ac.:.re;:.:a:.-B:.-+
__ -':i__
--:+- __ -=t 1 __ 1 1 --::t- __ ::t-__ -':i
1
Receiving IcA_re.:...a_C:'--+-
__ -:-I +-__ -r+ 2 t- __ +__
1 1
--:i
Columns A and B together
contain all possible 6 by 6 = 36
Testing I':Ac.:.re;:.:a:.-D:.-+
__ -':i
__-'=t-- __ 2
-3-__ ~t---+---':i
1 2
Machine f-Ac.:.re::::a::..E"--+
__ --4 __ -'=t-- __ 1 __
-=t --"t- __ + __ 1
--4
combinations of pairs of areas. Shipping Area F 1 1

22 -------------i Get the loads from the load table above using
23 Total Cost = INDEX ($0$8: $1$13, A28, B28).
24 L---------------------r=========~ -,
Cost/Movement computations
First Second Second
26 Department Department Loads First Area Area Cost
r+: --; 27 Assembly Assembly a Area A Area A a a
Calculations continue
below row 30.
28 Assembly
Assembly
Painting
Machine
50 Area A
100 Area A
Area B
Area E
1
1
50
100
--i = C28*F28

L- ----' 30 Assembly Receiving ._. ._0 Area A Area C 2 . .0

J
400 PART 2 Designing Operations

P Using POM for Windows

The POM for Windows facility layout module can be used to place up to 10 departments in 10 rooms to
minimize the total distance traveled as a function of the distances between the rooms and the flow
between departments. The program exchanges departments until no exchange will reduce the total
amount of movement, meaning an optimal solution has been reached.
The POM for Windows and Excel OM modules for line balancing can handle a line with up to
99 tasks, each with up to 6 immediate predecessors. In this program, cycle time can be entered
either (1) given, if known, or (2) the demand rate can be entered with time available as shown. All
five "heuristic rules" are used: (1) longest operation (task) time, (2) most following tasks,
(3) ranked positional weight, (4) shortest operation (task) time, and (5) least number of following
tasks. No one rule can guarantee an optimal solution, but POM for Windows displays the number of
stations needed for each rule.
Appendix IV discusses further details regarding POM for Windows.

Solved Problems Virtual Office Hours help is available at www.pearsonglobaleditions.comlmyomlab

T SOLVED PROBLEM 9.1 can be moved to a different work area (each 10 feet square) if lay-
Aero Maintenance is a small aircraft engine maintenance facility out analysis indicates a move would be beneficial.
located in Wichita, Kansas. Its new administrator, Ann Daniel, decides First, Daniel analyzes records to determine the number of
to improve material flow in the facility, using the process-layout material movements among departments in an average month.
method she studied at Wichita State University. The current layout of These data are shown in Figure 9.16. Her objective, Daniel
Aero Maintenance's eight departments is shown in Figure 9.15. decides, is to layout the departments so as to minimize the total
The only physical restriction perceived by Daniel is the need movement (distance traveled) of material in the facility. She writes
to keep the entrance in its current location. All other departments her objective as:

8 8
Current Aero Maintenance
Area A Area B Area C
Layout
Area D
Minimize material movement = 2: 2: XijCij
i=1 )=1

Entrance Receiving Parts Metallurgy t

10' where Xij = number of material movements per month
(1 ) (2) (3) (4)
~ (loads or trips) moving from department i
to department j
Breakdown Assembly Inspection Test t Cij = distance in feet between departments i and j
10'
(5) (6) (7) (8) (which, in this case, is the equivalent of cost
~
__ A_r_e_a_E A_r_e_a_F_40,_A_re_a_G A_r_ea_H_~ per load to move between departments)

Note that this is only a slight modification of the cost-objective

.•. FIGURE 9.15 Aero Maintenance Layout equation shown earlier in the chapter.

~ FIGURE 9.16 Department

Entrance Receiving Parts Metallurgy Breakdown Assembly Inspection Test

r-,
Number of Material (1) (2) (3) (4) (5) (6) (7) (8)

Movements (Loads)
Entrance (1)
between Departments in 100 100

r-,
0 0 0 0 0
One Month
0 50 20 0 0 0 Receiving (2)

r-. 30 30 0 Parts (3)

r-,
0 0

20 0 0 20 Metallurgy (4)

r-. 20 0 10 Breakdown (5)

I~ 30 0 Assembly (6)

I~ 0 Inspection (7)

I~ Test (8)
Chapter 9 Layout Decisions 401

Daniel assumes that adjacent departments, such as apart, and nonadjacent rooms, such as entrance and metallurgy
entrance (now in work area A) and receiving (now in work area (area D), are 30 feet apart. (Hence, 10 feet is considered
B), have a walking distance of 10 feet. Diagonal departments 10 units of cost, 20 feet is 20 units of cost, and 30 feet is
are also considered adjacent and assigned a distance of 10 feet. 30 units of cost.)
Nonadjacent departments, such as the entrance and parts (now Given the above information, redesign Aero Maintenance's
in area C) or the entrance and inspection (area G) are 20 feet layout to improve its material flow efficiency.

T SOLUTION
First, establish Aero Maintenance's current layout, as shown in Figure 9.17. Then, by analyzing the current layout, compute material movement:

Total movement = (100 X 10') + (100 X 20') + (50X 20') + (20 X 10')
I to 2 I to 3 2 t04 2 to 5
+ (30X 10') + (30 X20') + (20 X 30') + (20 X 10')
3 to 4 3 to 5 4 to 5 4 to 8
+ (20 X 10') + (lOX30') + (30 X 10')
5 to 6 5 to 8 6 to 7

= 1,000 + 2,000 + 1,000 + 200 + 300 + 600 + 600

+ 200 + 200 + 300 + 300
=6,700 feet

~ FIGURE 9.17 100 trips 50

Current Material Flow

Propose a new layout that will reduce the current figure of 6,700 feet. Two useful changes, for example, are to switch departments 3 and
5 and to interchange departments 4 and 6. This change would result in the schematic shown in Figure 9.18:

Total movement = (100 X 10') + (100 X 10') + (50X 10') + (20 X 10')
1 to 2 I to 3 2 to 4 2 to 5
+ (30 X 10') + (30X 20') + (20 X 10') + (20 X 20')
3 to 4 3 to 5 4 to 5 4 to 8
+ (20 X 10') + (lOX 10') + (30X 10')
5 to 6 5 to 8 6 to 7
= 1,000 + 1,000 + 500 + 200 + 300 + 600 + 200
+ 400 + 200 + 100 + 300
=4,800 feet

Do you see any room for further improvement?

~ FIGURE 9.18
Improved layout
402 PART 2 Designing Operations

T SOLVED PROBLEM 9.2 Performance Task Must

The assembly line whose activities are shown in Figure 9.19 has Task Time (minutes) Follow This Task
an 8-minute cycle time. Draw the precedence graph and find the
A 5
minimum possible number of one-person workstations. Then
B 3 A
arrange the work activities into workstations so as to balance the
C 4 B
line. What is the efficiency of your line balance?
D 3 B
E 6 C
F 1 C
G 4 D,E,F
H 2 G
28

~ FIGURE 9.19
Four-Station Solution to the
Line-Balancing Problem 6

Gr
Workstation 1 Workstation 4

Workstation 3

Workstation 2

T SOLUTION
The theoretical minimum number of workstations is:

28 minutes
---- = 3.5, or 4 stations
Cycle time 8 minutes

The precedence graph and one good layout are shown in Figure 9.19.

Total task time 28

Efficiency = ( Number of workstations ) X
(Largest cycle time ) = (4)(8) = 87.5%

Problems*

9.1 Michael Plumb's job shop has four work areas, Workpieces moved, in 100s of workpieces per week, between pairs
A, B, C, and D. Distances in feet between centers of the work of work areas, are:
areas are:
A B c D
A 8 7 4
A B c D
B 3 2
A 4 9 7 C 6
B 6 8 D
C 10
D
It costs Michael $1 to move 1 work piece 1 foot. What is the weekly
total material handling cost of the layout? IP,)c

*Note: IP,)cmeans the problem may be solved with POM for Windows 9.2 A Missouri job shop has four departments-machining
and/or Excel OM. (M), dipping in a chemical bath (D), finishing (F), and plating (P)-
Chapter 9 Layout Decisions 403

assigned to four work areas. The operations manager, Mary Marrs, Pieces Moved Between Work Areas Each Day
has gathered the following data for this job shop as it is currently
laid out (Plan A). M D s
M 23 32
D 20
100s of Workpieces Moved Between Work Areas Each Year
S
PlanA

M D F P
Distances Between Centers of Work Areas
M 6 18 2
(Departments) in Feet
D 4 2
F 18 M D s
P
M 10 5
D 8
S
Distances Between Work Areas (Departments) in Feet

M D F P
It costs $2 to move 1 workpiece 1 foot.
M 20 12 8 What is the cost? ~
D 6 10
F 4 9.4 Roy Creasey Enterprises, a machine shop, is planning
P to move to a new, larger location. The new building will be 60 feet
long by 40 feet wide. Creasey envisions the building as having six
distinct production areas, roughly equal in size. He feels strongly
about safety and intends to have marked pathways throughout the
It costs $0.50 to move I workpiece 1 foot in the job shop. Marrs's
building to facilitate the movement of people and materials. See the
goal is to find a layout that has the lowest material handling cost.
following building schematic.
a) Determine cost of the current layout, Plan A, from the data
above.
Building Schematic (with work areas 1-6)
b) One alternative is to switch those departments with the high loads,
namely, finishing (F) and plating (P), which alters the distance
between them and machining (M) and dipping (D), as follows:
1 2 3
Distances Between Work Areas (Departments) in Feet
PlanB
M D F P
M 20 8 12
D 10 6
F 4
P 4 5 6

What is the cost of this layout?

c) Marrs now wants you to evaluate Plan C, which also switches His foreman has completed a month-long study of the number of
milling (M) and drilling (D), below. loads of material that have moved from one process to another in the
current building. This information is contained in the following
Distance Between Work Areas (Departments) in Feet flow matrix.
PlanC
M D F P Flow Matrix between Production Processes
M 20 10 6
To
D 8 12
From Materials Welding Drills Lathes Grinders Benders
F 4
P Materials o 100 50 o o 50
Welding 25 0 0 50 o o
Drills 25 0 0 o 50 o
Lathes o 25 0 o 20 o
What is the cost of this layout? Grinders 50 0 100 o o o
d) Which layout is best from a cost perspective? ~ Benders 10 0 20 o o o
9.3 Three departments-milling (M), drilling (D), and saw-
ing (S)-are assigned to three work areas in Samuel Smith's
machine shop in Baltimore. The number of work pieces moved per Finally, Creasey has developed the following matrix to indicate
day and the distances between the centers of the work areas, in feet, distances between the work areas shown in the building
are shown in the next column. schematic.
404 PART 2 Designing Operations

T FIGURE 9.21 (a) layout Options

Distance between Work Areas
Number of trips between work centers:
1 2 3 4 5 6
1 20 40 20 40 60
2 20 40 20 40
3 60 40 20
~ --~--~--+-~---+-
4 20 40
Refrig. 1 0 8 13 0 0
5 20
Counter 2 5 0 3 3 8
6
Sink 3 3 12 0 4 0

Storage 4 3 0 0 0 5
What is the appropriate layout of the new building? FX" Stove 5 0 8 4 10 0
9.5 Registration at Southern University has always been a
time of emotion, commotion, and lines. Students must move
among four stations to complete the trying semiannual process.
Last semester's registration, held in the fieldhouse, is described in
T FIGURE 9.21 (b)
Figure 9.20. You can see, for example, that 450 students moved
from the paperwork station (A) to advising (B), and 550 went Kitchen layout #1
directly from A to picking up their class cards (C). Graduate stu- Walking distance in feet
dents, who for the most part had preregistered, proceeded directly
from A to the station where registration is verified and payment
collected (D). The layout used last semester is also shown in Figure
9.20. The registrar is preparing to set up this semester's stations
and is anticipating similar numbers. 4 4 4 4
Kitchen layout #2
Walking distance in feet
Interstation Activity Mix

Pick up Advising Pick up Verification

paperwork station class of status
and forms cards and payment

(A) (B) (C) (D)

Paperwork/forms (A) - 450 550 50

Advising (B) 350 - 200 0
Class cards (C) 0 0 - 750
Verification/payment (D) 0 0 0 -

Existing Layout

9.7 Reid Chocolates (see Problem 9.6) is considering a

A B c D third layout, as shown below. Evaluate its effectiveness in trip-
distance feet.
1--30'--1--30'--1--30'--1

.• FIGURE 9.20 Registration Flow of Students

Kitchen layout #3
Walking distance in feet

a) What is the "load X distance," or "movement cost," of the lay-

out shown?

b) Provide an improved layout and compute its movement Storage

cost. FX" '"~-"'--"4 8)
9.6 You have just been hired as the director of operations Stove

for Reid Chocolates, a purveyor of exceptionally fine candies.

Reid Chocolates has two kitchen layouts under consideration for
®
its recipe making and testing department. The strategy is to pro-
vide the best kitchen layout possible so that food scientists can
devote their time and energy to product improvement, not wasted 9.8 Reid Chocolates (see Problems 9.6 and 9.7) has yet two
effort in the kitchen. You have been asked to evaluate these two more layouts to consider.
kitchen layouts and to prepare a recommendation for your boss, a) Layout 4 is shown on the next page. What is the total trip
Mr. Reid, so that he can proceed to place the contract for build- distance?
ing the kitchens. (See Figure 9.21 (a), and Figure 9.21 (b).) FX" b) Layout 5, which also follows, has what total trip distance?
Chapter 9 Layout Decisions 405

Kitchen layout #4
Operation Standard time (min)
Walking distance in feet 1.1
Shear
Counter Sink Storage Bend 1.1

4
8) Weld 1.7
Clean 3.1.
Paint 1.0
Stove

®
9.11 Stanford Rosenberg Electronics wants to establish an
assembly line for producing a new product, the Personal Little
Assistant (PLA). The tasks, task times, and immediate predecessors
Kitchen layout #5 for the tasks are as follows:
Walking distance in feet

Time Immediate
Task (see) Predecessors
A 12
B 15 A
C 8 A
D 5 B,C
E 20 D

Rosenberg's goal is to produce 180 PLAs per hour.

a) What is the cycle time?
b) What is the theoretical minimum for the number of workstations
that Rosenberg can achieve in this assembly line?
4 c) Can the theoretical minimum actually be reached when worksta-
tions are assigned? ~

9.12 South Carolina Furniture, Inc., produces all types of

9.9 Six processes are to be laid out in six areas along a long
office furniture. The "Executive Secretary" is a chair that has been
corridor at Linda Babat Accounting Services. The distance between
designed using ergonomics to provide comfort during long work
adjacent work centers is 40 feet. The number of trips between work
hours. The chair sells for $130. There are 480 minutes available dur-
centers is given in the following table:
ing the day, and the average daily demand has been 50 chairs. There
are eight tasks:

To
Performance Time Task Must Follow
Task (min) Task Listed Below
From A B C D E F
A 4
A 18 25 73 12 54
B 7
B 96 23 31 45
C 6 A,B
C 41 22 20
D 5 C
D 19 57
E 6 D
E 48
F 7 E
F
G 8 E
H 6 F,G

a) Assign the processes to the work areas in a way that minimizes

the total flow, using a method that places processes with highest a) Draw a precedence diagram of this operation.
flow adjacent to each other. b) What is the cycle time for this operation?
b) What assignment minimizes the total traffic flow? ~ c) What is the theoretical minimum number of workstations?
d) Assign tasks to workstations.
9.10 After an extensive product analysis using group tech-
e) What is the idle time per cycle?
nology, Bob Buerlein has identified a product he believes should be
f) How much total idle time is present each day?
pulled out of his process facility and handled in a work cell. Bob has
g) What is the overall efficiency of the assembly line? ~
identified the following operations as necessary for the work cell.
The customer expects delivery of 250 units per day, and the work 9.13 Rita Gibson Appliances wants to establish an assembly
day is 420 minutes. line to manufacture its new product, the Mini-Me Microwave Oven.
a) What is the takt time? The goal is to produce five Mini-Me Microwave Ovens per hour.
b) How many employees should be cross-trained for the cell? The tasks, task times, and immediate predecessors for producing
c) Which operations may warrant special consideration? one Mini-Me Microwave Oven are as follows:
406 PART 2 Designing Operations

stability and better protection against knee, foot, and back injuries.
Time Immediate
Manufacturing the shoes requires 10 separate tasks. There are 400
Task (min) Predecessors
minutes available for manufacturing the shoes in the plant each day.
A 10
Daily demand is 60. The information for the tasks is as follows:
B 12 A
C 8 A,B
D 6 B,C Performance Time Task Must Follow
E 6 C Task (min) Task Listed Below
F 6 D,E A I
B 3 A
a) What is the theoretical minimum for the smallest number of C 2 B
workstations that Gibson can achieve in this assembly line? D 4 B
b) Graph the assembly line and assign workers to workstations. E 1 C,D
Can you assign them with the theoretical minimum? F 3 A
c) What is the efficiency of your assignment? IX" G 2 F
H 5 G
9.14 The Temple Toy Company has decided to manufacture I I E,H
a new toy tractor, the production of which is broken into six steps. J 3 I
The demand for the tractor is 4,800 units per 40-hour workweek:

Performance Time a) Draw the precedence diagram.

Task (see) Predecessors b) Assign tasks to the minimum feasible number of workstations
A 20 None according to the "ranked positioned weight" decision rule.
B 30 A c) What is the efficiency of the process?
C l5 A d) What is the idle time per cycle? IX"
D 15 A 9.17 The Mach 10 is a one-person sai Iboat manufactured
E 10 B,C by Creative Leisure. The final assembly plant is in Cupertino,
F 30 D,E California. The assembly area is available for production of the
Mach 10 for 200 minutes per day. (The rest of the time it is busy
a) Draw a precedence diagram of this operation. making other products.) The daily demand is 60 boats. Given the
b) Given the demand, what is the cycle time for this operation? following information,
c) What is the theoretical minimum number of workstations? a) Draw the precedence diagram and assign tasks using five work-
d) Assign tasks to workstations. stations.
e) How much total idle time is present each cycle? b) What is the efficiency of the assembly line, using your answer to
f) What is the overall efficiency of the assembly line with five sta- (a)?
tions; and with six stations? IX" c) What is the theoretical minimum number of workstations?
d) What is the idle time per boat produced? IX"
9.15 The following table details the tasks required for Dallas-
based T. Liscio Industries to manufacture a fully portable industrial
vacuum cleaner. The times in the table are in minutes. Demand fore- Performance Time Task Must Follow
casts indicate a need to operate with a cycle time of 10 minutes. Task (min) Task Listed Below
A I
Immediate B 1 A
Activity Activity Description Predecessors Time C 2 A
A Attach wheels to tub D 1 C
5
B Attach motor to lid 1.5 E 3 C
C Attach battery pack B 3 F I C
D Attach safety cutoff C 4 G I D,E,F
E Attach filters B 3 H 2 B
F Attach lid to tub A,E 2 I I G,H
G Assemble attachments 3
H Function test D,F,G 3.5 9.18 Because of the expected high demand for Mach 10,
I Final inspection H 2 Creative Leisure has decided to increase manufacturing time avail-
J Packing I 2 able to produce the Mach IO (see Problem 9.17).
a) If demand remained the same but 300 minutes were available each
a) Draw the appropriate precedence diagram for this production line. day on the assembly line, how many workstations would be needed?
b) Assign tasks to workstations and determine how much idle time b) What would be the efficiency of the new system?
is present each cycle? c) What would be the impact on the system if 400 minutes were
c) Discuss how this balance could be improved to 100%. available? IX"
d) What is the theoretical minimum number of workstations? IX"
9.19 Dr. Lori Baker, operations manager at Nesa Electronics,
9.16 Tailwind, Inc., produces high-quality but expensive prides herself on excellent assembly-line balancing. She has been
training shoes for runners. The Tailwind shoe, which sells for $210, told that the firm needs to complete 96 instruments per 24-hour day.
contains both gas- and liquid-filled compartments to provide more The assembly-line activities are:
Chapter 9 Layout Decisions 407

These activities can be performed in any order, with two exceptions:

Task Time (min) Predecessors
Medical history must be taken first, and Exit medical evaluation is
A 3 last. At present, there are three paramedics and two physicians on
B 6 duty during each shift. Only physicians can perform exit evaluations
C 7 A and conduct psychological interviews. Other activities can be car-
0 5 A,B
ried out by either physicians or paramedics.
E 2 B a) Develop a layout and balance the line.
F 4 C b) How many people can be processed per hour?
G 5 F c) Which activity accounts for the current bottleneck?
H 7 O,E d) What is the total idle time per cycle?
I I H e) If one more physician and one more paramedic can be placed on
J 6 E duty, how would you redraw the layout? What is the new
K 4 G, I, J
throughput?
50
9.22 Frank Pianki's company wants to establish an assembly
line to manufacture its new product, the iScan phone. Frank's goal
a) Draw the precedence diagram.
is to produce 60 iScans per hour. Tasks, task times, and immediate
b) If the daily (24-hour) production rate is 96 units, what is the
predecessors are as follows:
highest allowable cycle time?
c) If the cycle time after allowances is given as 10 minutes, what is
the daily (24-hour) production rate? Time Immediate Time Immediate
d) With a l G-rninute cycle time, what is the theoretical minimum Task (see) Predecessors Task (see) Predecessors
number of stations with which the line can be balanced? A 40 F 25 C
e) With a 10-minute cycle time and six workstations, what is the B 30 A G 15 C
efficiency? C 50 A H 20 O,E
f) What is the total idle time per cycle with a 1O-minute cycle time 0 40 B I 18 F,G
and six workstations? E 6 B J 30 H, I
g) What is the best work station assignment you can make without
exceeding a lO-minute cycle time and what is its efficiency? IX
a) What is the theoretical minimum for the number of workstations
that Frank can achieve in this assembly line?
b) Use the most foLLowing tasks heuristic to balance an assembly
line for the is can phone.
c) How many workstations are in your answer to (b)?
d) What is the efficiency of your answer to (b)? IX
•••• 9.23 As the Cottrell Bicycle Co. of St. Louis completes plans
for its new assembly line, it identifies 25 different tasks in the pro-
duction process. VP of Operations Jonathan Cottrell now faces the
job of balancing the line. He lists precedences and provides time esti-
mates for each step based on work-sampling techniques. His goal is
to produce 1,000 bicycles per standard 40-hour workweek.

Time Precedence Time Precedence

Task (see) Tasks Task (see) Tasks
K3 60 E3 109 F3
9.20 Suppose production requirements in Solved Problem
K4 24 K3 06 53 F4
9.2 (see page 402) increase and require a reduction in cycle time
K9 27 K3 07 72 F9, E2, E3
from 8 minutes to 7 minutes. Balance the line once again, using the
11 66 K3 08 78 E3,06
new cycle time. Note that it is not possible to combine task times so
12 22 K3 09 37 06
as to group tasks into the minimum number of workstations. This
13 3 CI 78 F7
condition occurs in actual balancing problems fairly often. IX
G4 79 K4,K9 B3 72 07,08,09, CI
9.21 The preinduction physical examination given by the G5 29 K9,11 B5 108 CI
U.S. Army involves the following seven activities: F3 32 J2 B7 18 B3
F4 92 12 Al 52 B5
Average Time F7 21 13 A2 72 B5
Activity (min) F9 126 G4 A3 114 B7, AI, A2
Medical history 10 E2 18 G5,F3
Blood tests 8
Eye examination 5 a) Balance this operation, using various heuristics. Which is best
Measurements (i.e., weight, height, blood pressure) 7 and why?
Medical examination 16 b) What happens if the firm can change to a 41-hour workweek? ~
Psychological interview 12
Exit medical evaluation 10 ~ Refer to myomlabO for these additional homework
problems: 9.24-9.27
408 PART 2 Designing Operations

Case Studies
~ State Automobile license Renewals
Henry Coupe, the manager of a metropolitan branch office of the her task to keep up with the others. Long lines built up during the
state department of motor vehicles, attempted to analyze the driver's maximum-demand periods.
license-renewal operations. He had to perform several steps. After Coupe also found that Steps I to 4 were handled by general
examining the license-renewal process, he identified those steps and clerks who were each paid $12 per hour. Step 5 was performed by a
associated times required to perform each step, as shown in the fol- photographer paid $16 per hour. (Branch offices were charged $10
lowing table: per hour for each camera to perform photography.) Step 6, issuing
temporary licenses, was required by state policy to be handled by
uniformed motor vehicle officers. Officers were paid $18 per hour
State Automobile License-Renewal Process Times but could be assigned to any job except photography.
A review of the jobs indicated that Step 1, reviewing applica-
Average Time
tions for correctness, had to be performed before any other step
to Perform could be taken. Similarly, Step 6, issuing temporary licenses, could
Step (seconds)
not be performed until all the other steps were completed.
1. Review renewal application Henry Coupe was under severe pressure to increase productiv-
for correctness 15 ity and reduce costs, but he was also told by the regional director
2. Process and record payment 30 that he must accommodate the demand for renewals. Otherwise,
3. Check file for violations "heads would roll."
and restrictions 60
4. Conduct eye test 40 Discussion Questions
5. Photograph applicant 20
1. What is the maximum number of applications per hour that can
6. Issue temporary license 30
be handled by the present configuration of the process?
2. How many applications can be processed per hour if a second
clerk is added to check for violations?
Coupe found that each step was assigned to a different per- 3. If the second clerk could be added anywhere you choose (and not
son. Each application was a separate process in the sequence necessarily to check for violations, as in question 2), what is the
shown. He determined that his office should be prepared to maximum number of applications the process can handle? What
accommodate a maximum demand of processing 120 renewal is the new configuration?
applicants per hour. 4. How would you suggest modifying the process to accommodate
He observed that work was unevenly divided among clerks and 120 applications per hour? What is the cost per application of
that the clerk responsible for checking violations tended to shortcut this new configuration?

Source: Modified from a case by W. Earl Sasser, Paul R. Olson, and D. Daryl Wyckoff, Management of Services Operations: Text, Cases, and Readings
(Boston: Allyn & Bacon).

~ Laying Out Arnold Palmer Hospital's New Facility Video Case

When Orlando's Arnold Palmer Hospital began plans to create a 1,000 planning meetings of 35 user groups, extensive
new 273-bed, l l-story hospital across the street from its existing motion and time studies, and computer simulations of the
facility, which was bursting at the seams in terms of capacity, a mas- daily movements of nurses," says Swanson.
sive planning process began. The $ 100 million building, opened in In a traditional linear hospital layout, called the racetrack
2006, was long overdue, according to Executive Director Kathy design, patient rooms line long hallways, and a nurse might walk
Swanson: "We started Arnold Palmer Hospital in 1989, with a mis- 2.7 miles per day serving patient needs at Arnold Palmer. "Some
sion to provide quality services for children and women in a com- nurses spent 30% of their time simply walking. With the nursing
forting, family-friendly environment. Since then we have served shortage and the high cost of health care professionals, efficiency is
well over 1.5 million women and children and now deliver more a major concern," added Swanson. With the nursing station in the
than 12,000 babies a year. By 2001, we simply ran out of room, and center of 10- or 12-bed circular pods, no patient room is more than
it was time for us to grow." 14 feet from a station. The time savings are in the 20% range.
The new hospital's unique, circular pod design provides a max- Swanson pointed to Figures 9.22 and 9.23 as examples of the old
imally efficient layout in all areas of the hospital, creating a patient- and new walking and trip distances. *
centered environment. Servicescape design features include a serene "We have also totally redesigned our neonatal rooms," says
environment created through the use of warm colors, private rooms Swanson. "In the old system, there were 16 neonatal beds in a
with pull-down Murphy beds for family members, 14-foot ceilings, large and often noisy rectangular room. The new building features
and natural lighting with oversized windows in patient rooms. But
these radical new features did not come easily. "This pod concept *Layout and walking distances, including some of the numbers in Figures
with a central nursing area and pie-shaped rooms resulted from over 9.22 and 9.23, have been simplified for purposes of this case.
Chapter 9 Layout Decisions 409

~ FIGURE 9.22
Room Room Room Room Room Room Traditional Hospital layout
501 502 503 504 505 506 Patient rooms are on two
linear hallways with exterior
20' 30' 40' 50' 60' 70' Distance windows. Supply rooms are
-------Hallway -------, from on interior corridors. This

I 30' 40' 50' -------+------'\nurses' layout is called a "racetrack"

r---- station design. .
I Bresak Electrical/ (feet)
Nurses' Linens Medical mechanical
station room supply room

1 ------Hallway-------
20' 30' 40' 50' 60' 70'

Room Room Room Room Room Room

507 508 509 510 511 512

semiprivate rooms for these tiny babies. The rooms are much trips to the break room, and 12 trips to the linen supply room.
improved, with added privacy and a quiet, simulated night atmo- What is his total distance traveled in miles?
sphere, in addition to pull-down beds for parents to use. Our 4. Figure 9.23 illustrates an architect's drawing of Arnold Palmer
research shows that babies improve and develop much more Hospital's new circular pod system. If nurse Susan Jones's day
quickly with this layout design. Layout and environment indeed includes 7 trips from the nursing pod to each of the 12 rooms
impact patient care!" (back and forth), 20 trips to central medical supply, 6 trips to the
break room, and 12 trips to the pod linen supply, how many miles
Discussion Questions* does she walk during her shift? What are the differences in the
1. Identify the many variables that a hospital needs to consider in travel times between the two nurses for this random day?
S. The concept of servicescapes is discussed in this chapter.
layout design.
Describe why this is so important at Arnold Palmer Hospital and
2. What are the advantages of the circular pod design over the tradi-
give examples of its use in layout design.
tionallinear hallway layout found in most hospitals?
3. Figure 9.22 illustrates a sample linear hallway layout. During a
period of random observation, nurse Thomas Smith's day
includes 6 trips from the nursing station to each of the 12 patient *You may wish to view the video that accompanies this case before
rooms (back and forth), 20 trips to the medical supply room,S addressing these questions.

~ FIGURE 9.23
New Pod Design for Hospital
layout
Note that each room is 14 feet
from the pod's local nursing
station. The break rooms and
the central medical station are
each about 60 feet from the
local nursing pod. Pod linen
supply rooms are also 14 feet
from the local nursing station.
410 PART 2 Designing Operations

~Facility layout at Wheeled Coach Video Case !Jill

-W-h-e-n-p-re-s-i:"'d-en-t--=-B-o-b-C-o-ll-in-S-b-e-g-a-n-h-is-c-a-r-e-e-r
-a-t-w--he-e-I-e-d-c-o-a-c-h-,--m-o-va-b-I-e-, 11
-W-i-th-m-a-n-y-W-O-rk-b-e-n-c-h-e-s-a-n-d-s-ta-g-i-n-g-r-a-C-k-s-
e

the world's largest manufacturer of ambulances, there were only a borne on wheels so that they can be easily rearranged and
handful of employees. ow the firm's Florida plant has a workforce products transported to the assembly line.
of 350. The physical plant has also expanded, with offices, R&D, Assembly-line balancing is one key problem facing
final assembly, and wiring, cabinetry, and upholstery work cells in Wheeled Coach and every other repetitive manufacturer. Produced
one large building. Growth has forced the painting work cell into a on a schedule calling for four lO-hour work days per week, once an
separate building, aluminum fabrication and body installation into ambulance is on one of the six final assembly lines, it must move for-
another, inspection and shipping into a fourth, and warehousing into ward each day to the next workstation. Balancing just enough work-
yet another. ers and tasks at each of the seven workstations is a never-ending
Like many other growing companies, Wheeled Coach was not challenge. Too many workers end up running into each other; too
able to design its facility from scratch. And although management few can't finish an ambulance in 7 days. Constant shifting of design
realizes that material handling costs are a little higher than an ideal and mix and improved analysis has led to frequent changes.
layout would provide, Collins is pleased with the way the facility has
evolved and employees have adapted. The aluminum cutting work Discussion Questions*
cell lies adjacent to body fabrication, which, in turn, is located next
1. What analytical techniques are available to help a company like
to the body-installation work cell. And while the vehicle must be
Wheeled Coach deal with layout problems?
driven across a street to one building for painting and then to another
2. What suggestions would you make to Bob Collins about his layout?
for final assembly, at least the ambulance is on wheels. Collins is
3. How would you measure the "efficiency" of this layout?
also satisfied with the flexibility shown in design of the work cells.
Cell construction is flexible and can accommodate changes in prod- *You may wish to view the video that accompanies this case before
uct mix and volume. In addition, work cells are typically small and addressing these questions.

~ Additional Case Study: Visit www.pearsonglobaleditions.comlmyomlab or www.pearsonglobaleditions.comlheizer for this free

case study:
Microfix, Inc.: This company needs to balance its PC manufacturing assembly line and deal with sensitivity analysis of time estimates.

Bibliography
Birchfield, J. c., and J. Birchfield. Design and Layout of Foodservice Panchalavarapu, P. R., and Y. Chankong. "Design of Cellular
Facilities, 3rd ed. ew York, Wiley & Sons, 2007. Manufacturing System with Assembly Considerations."
Francis, R. L., L. F. McGinnis, and J. A. White. Facility Layout and Computers & Industrial Engineering 48, no. 3 (May 2005):
Lacation, 3rd ed. Upper Saddle River, NJ: Prentice Hall, 1998. 448.
Gultekin, H., O. Y. Karasan, and M. S. Akturk. "Pure Cycles in Roodbergen, K. J., and I. F. A. Vis. "A Model for Warehouse
Flexible Robotic Cells." Computers & Operations Research Layout." liE Transactions 38, no. 10 (October 2006):
36, no. 2 (February 2009): 329. 799-811.
Heragu, S. S. Facilities Design, 3rd ed. New York: CRC Press, 2008. Stanowy, A. "Evolutionary Strategy for Manufacturing Cell
Heyer, N., and U. Wernrnerlov. Reorganizing the Factory: Design." Omega 34, no. I (January 2006): I.
Competing through Cellular Manufacturing. Portland, OR: Tompkins, James A. Facility Planning, 4th ed. New York: Wiley,
Productivity Press, 2002. 2009.
Johnson, Alan. "Getting the Right Factory Layout." Manufacturer's Upton, David. "What Really Makes Factories Flexible?"
Monthly (July 2008): 16. Harvard Business Review 73, no. 4 (July-August 1995):
Kator, C. "Crossdocking on the Rise." Modern Materials Handling 74-84.
63, no. 6 (June 2008): 15. Zeng, A. Z., M. Mahan, and N. Fleut. "Designing an Efficient
Kee, Micah R. "The Well-Ordered Warehouse." APICS: The Warehouse Layout to Facilitate the Order-Filling Process."
Performance Advantage (March 2003): 20-24. Production and Inventory Management Journal 43, no. 3-4
Keeps, David A. "Out-of-the-Box Offices." Fortune 159, no. I (3rd/4th Quarter 2002): 83-88.
(January 19,2009): 45. Zhao, T., and C. L. Tseng. "Flexible Facility Interior Layout." The
Larson, S. "Extreme Makover-OR Edition." Nursing Management Journal of the Operational Research Society 58, no. 6 (June
(November 2005): 26. 2007): 729-740.
Chapter 9 Rapid Review
Main Heading Review Material myomlab
THE STRATEGIC Layout has numerous strategic implications because it establishes an organization's
IMPORTANCE OF competitive priorities in regard to capacity, processes, flexibility, and cost, as well as
LAYOUT DECISIONS quality of work life, customer contact, and image.
(p.376) The objective of layout strategy is to develop an effective and efficient layout that will
meet the firm's competitive requirements.

TYPES OF LAYOUT Types of layout and examples of their typical objectives include:
(pp.376-378)
1. Office layout: Locate workers requiring frequent contact close to one another.
2. Retail layout: Expose customers to high-margin items.
3. Warehouse layout: Balance low-cost storage with low-cost material handling.
4. Fixed-position layout: Move material to the limited storage areas around the site.
5. Process-oriented layout: Manage varied material flow for each product.
6. Work-cell layout: Identify a product family, build teams, and cross-train team
members.
7. Product-oriented layout: Equalize the task time at each workstation.

OFFICE lAYOUT • Office layout-The grouping of workers, their equipment, and spaces/offices to
(pp.378-379) provide for comfort, safety, and movement of information.

A relationship chart displays a "closeness value" between each pair of people and/or
departments that need to be placed in the office layout.

RETAil LAYOUT • Retail layout-An approach that addresses flow, allocates space, and responds te
(pp. 379-381) customer behavior.
Retail layouts are based on the idea that sales and profitability vary directly with
customer exposure to products. The main objective of retail layout is to maximize
profitability per square foot of floor space (or, in some stores, per linear foot of shelf
space).
• Slotting fees-Fees manufacturers pay to get shelf space for their products.
• Servicescape- The physical surroundings in which a service takes place and how
they affect customers and employees.

WAREHOUSING AND • Warehouse layout-A design that attempts to minimize total cost by addressing
STORAGE lAYOUT trade-offs between space and material handling.
(pp. 381-382) The variety of items stored and the number of items "picked" has direct bearing on
the optimal layout. Modern warehouse management is often an automated procedure
using automated storage and retrieval systems (ASRSs).
• Cross-docking-Avoiding the placement of materials or supplies in storage by pro-
cessing them as they are received for shipment.
Cross-docking requires both tight scheduling and accurate inbound product
identification.
• Random stocking-Used in warehousing to locate stock wherever there is an open
location.
• Customizing-Using warehousing to add value to a product through component
modification, repair, labeling, and packaging.

FIXED-POSITION LAYOUT • Fixed-position layout-A system that addresses the layout requirements of station-
(pp. 382-383) ary projects.
Fixed-position layouts involve three complications: (1) There is limited space at vir-
tually all sites, (2) different materials are needed at different stages of a project, and
(3) the volume of materials needed is dynamic.

PROCESS-ORIENTED • Process-oriented layout-A layout that deals with low-volume, high-variety pro-
lAYOUT duction in which like machines and equipment are grouped together. ~I ., Problems: 9.1-9.9
(pp. 383-387) • Job lots-Groups or batches of parts processed together.
n 11
Virtual Office Hours for
Material handling cost minimization = LL Xi} Cij (9-1) Solved Problem: 9.1
;=1 )=1
VIDEO 9.1
Arnold Palmer Hospital
ACTIVE MODEL 9.1
Chapter 9 Rapid Review continued

Main Heading Review Material

WORK CElLS
(pp. 388-391)
• Work cell-An arrangement of machines and personnel
single product or family of related products.
that focuses on making a
'" , Problem: 9.10

• Takt time-Pace of production to meet customer demands.

Takt time = Total work time available/Units required (9-2)

Workers required = Total operation time required/Takt time (9-3)

• Focused work center-A permanent or semi-permanent product-oriented arrange-

ment of machines and personnel.
• Focused factory-A facility designed to produce similar products or components.

REPETITIVE AND ~
PRODUCT-ORIENTED
• Fabrication
• Assembly line-An
line-A machine-paced,
approach
product-oriented
that puts fabricated
facility for building components.
parts together at a series of work-
!J Problems:
9.11-9.22
LAYOUT stations; a repetitive process.
(pp. 392-397)
• Assembly-line balancing-Obtaining output at each workstation on a production VIDEO 9.2
line in order to minimize delay. Facility Layout at Wheeled
Coach Ambulances
Cycle time = Production time available per day -i- Units required per day (9-4)
n Virtual Office Hours for
Minimum number of workstations = L Time for task i -i- Cycle time (9-5) Solved Problem: 9.2
i=1

• Heuristic-Problem solving using procedures and rules rather than mathematical

optimization.
Line balancing heuristics include longest task (operation) time, most following tasks,
ranked positional weight, shortest task (operation) time, and least number of follow-
ing tasks.
Task times
Efficiency = (9-6)
(Actnal number of workstations) X (Largest assigned cycle time)

Self Test
• Before taking the self-test, refer to the learning objectives listed at the beginning of the chapter and the key terms listed at the end of the chapter.
LOt. Which of the statements below best describes office layout? d) allocates shelf space based on customer behavior.
a) Groups workers. their equipment, and spaces/offices to provide e) deals with low-volume, high-variety production.
for movement of information. LOS. A process-oriented layout:
b) Addresses the layout requirements of large, bulky projects such a) groups workers to provide for movement of information.
as ships and buildings. b) addresses the layout requirements of large, bulky projects such
c) Seeks the best personnel and machine utilization in repetitive or as ships and buildings.
continuous production. c) seeks the best machine utilization in continuous production.
d) Allocates shelf space and responds to customer behavior. d) allocates shelf space based on customer behavior.
e) Deals with low-volume, high-variety production. e) deals with low-volume. high-variety production.
L02. Which of the following does not support the retail layout objective L06. For a focused work center or focused factory to be appropriate, the
of maximizing customer exposure to products? following three factors are required:
a) Locate high-draw items around the periphery of the store. a)
b) Use prominent locations for high-impulse and high-margin items. b)
c) Maximize exposure to expensive items. c)
d) Use end-aisle locations.
e) Convey the store's mission with the careful positioning of the L07. Before considering a product-oriented layout. it is important to be
lead-off department. certain that:
a)
L03. The major problem addressed by the warehouse layout strategy is: b)
a) minimizing difficulties caused by material flow varying with c)
each product. d)
b) requiring frequent contact close to one another.
c) addressing trade-offs between space and material handling. LOS. An assembly line is to be designed for a product whose comple-
d) balancing product flow from one workstation to the next. tion requires 21 minutes of work. The factory works 400 minutes
e) none of the above. per day. Can a production line with five workstations make
100 units per day?
L04. A fixed-position layout: a) Yes, with exactly 100 minutes to spare.
a) groups workers to provide for movement of information. b) No, but four workstations would be sufficient.
b) addresses the layout requirements of large, bulky projects such c) No. it will fall short even with a perfectly balanced line.
as ships and buildings. d) Yes, but the line's efficiency is very low.
c) seeks the best machine utilization in continuous production. e) Cannot be determined from the information given.

Answers: LOl. a; L02. c; L03. c; L04. b; LOS. e; L06. family of products, stable forecast (demand), volume; L07. adequate volume, stable demand.
standardized product, adequate/quality supplies; LOS. c.

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Module 6 - Layout Decisions

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Module 6 - Layout Decisions

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Chapter Outline

GLOBAL COMPANY PROFILE: McDONALD'S

The Strategic Importance of Layout

McDONALD'S LOOKS FOR COMPETITIVE ADVANTAGE THROUGH LAYOUT

I revolutionized the restaurant industry by inventing

Chapter 9 Learning Objectives

THE STRATEGIC IMPORTANCE OF LAYOUT DECISIONS

• Higher utilization of space, equipment, and people

In our increasingly short-life-cycle, mass-customized world, layout designs need to be viewed as

T TABLE 9.1 layout Strategies

Office Locate workers requiring frequent Allstate Insurance

Retail Expose customer to high-margin Kroger's Supermarket

6. Work-eel! layout: Arranges machinery and equipment to focus on production of a single

This open office offers a large shared

Source. Adapted from Richard Muther, CEO 6bsolutely

6 Central files U l1nimportant

7 Computer services X !"-lotdesirable

Here are two examples: I

Trying to penetrate urban areas that

A critical element contributing to the

Examples of each of these three elements of servicescape are:

Automated storage and retrieval systems

Here are three versions of the fixed-position

A service example of a fixed-position layout is an operating room;

In shipbuilding, there is limited space next to the fixed-position

PROCESS-ORIENTED LAYOUT Process-oriented layout

~ FIGURE 9.3 Surgery ER triage room Emergency room admissions

Patient B-erratic heart

needs. A process-oriented layout is typically the low-volume, high-variety strategy discussed in

where n = total number of work centers or departments

Number of loads per week "'FIGURE 9.4

Assembly Painting Machine Receiving Shipping Interdepartmental Flow

Assembly (1) 50 100 0 0 20 AUTHOR COMMENT

Area A Area B Area C .•• FIGURE 9.5

Area D Area E Area F

100 .•• FIGURE 9.6

Cost = $50 + $200 + $40 + $30 + $50

Cost = $50 + $100 + $20 + $60 + $50

RELATED PROBLEMS ~ 9.1,9.2,9.3,9.4,9.5,9.6,9.7,9.8,9.9

Computer Software for Process-Oriented Layouts

(a) (b) ..•••

Requirements of Work Cells

Current layout-straight lines make,

Staffing and Balancing Work Cells

OM in Action ~ Work Cells Increase Productivity at Canon

Workers required = Total operation time required/Takt time (9-3)

Example 2 considers these two steps when staffing work cells.

Takt time = (8 hours X 60 minutes)/600 units = 480/600 = .8 minute = 48 seconds

Workers required = Total operation time required/Takt time

RELATED PROBLEM ~ 9.10

The Focused Work Center and, the Focused Factory

1. Volume is adequate for high equipment utilization

OM in Action ~ From Assembly lines to Green Disassembly lines

The disadvantages of product layout are:

.• FIGURE 9.12 McDonald's HamburgerAssembly line

The Boeing 737, the world's most popular

~TABLE 9.3 Task Must Follow

SOLUTION ~ Figure 9.13 shows the precedence diagram.

RELATED PROBLEMS ~ 9.12a, 9.14a, 9.15a, 9.16a, 9.19a

L Time for task i

where n is the number of assembly tasks.

.•• TABLE 9.4

Example 4 illustrates a simple line-balancing procedure.

Total task time 66

~ FIGURE 9.14 Station 2 5 min

RELATED PROBLEMS ~ 9.11,9.12,9.13,9.14,9.15,9.16,9.17,9.18,9.19, 9.20, 9.21, 9.22,

Boeing needs to calculate the balance efficiency for Example 4.

LEARNING EXERCISE ~ What is the efficiency if an eighth workstation is opened? [Answer:

RELATED PROBLEMS ~ 9.12f, 9.13c, 9.14f, 9.16c, 9.l7b, 9.18b, 9.1ge,g

In the case of slaughtering

Using Software to Solve Layout Problems

L- ----' 30 Assembly Receiving ._. ._0 Area A Area C 2 . .0

P Using POM for Windows

Solved Problems Virtual Office Hours help is available at www.pearsonglobaleditions.comlmyomlab

Entrance Receiving Parts Metallurgy t

Note that this is only a slight modification of the cost-objective