INTRODUCTION TO

FACILITY PLANNING
FACILIT June 2021
Facilities
 Broadly defined as buildings where people,
material, and machines come together for a stated
purpose – typically to make a tangible product or
provide a service.
 It must be properly managed to achieve its stated
purpose while satisfying several objectives.
Facilities
 These objectives include producing a product or
providing a service
• at lower cost,
• at higher quality,
• or using the least amount of resources.
Facilities Planning

 Is a complex and broad subject

that cuts across several
specialized disciplines
Topics under facilities planning
 Flow, space, and activity relationships
 Personnel Requirements
 Material Handling
 Layout
 Warehouse Operations
 Example Triggers of Facilities Planning
Problems

Design Change Adding a new product

Enlarge/Reduce Department
Size/Capacity

Moving a department Adding a new department Planning a new plant

Facilities Planning
 Determines how an
entity’s tangible fixed
assets support its
activities.

 Different from facilities

location, facilities
design, facilities layout
and plant layout
Facilities Planning Hierarchy

Facilities Facility Systems

Location Design
Facilities
Planning
Facilities Layout Design
Design

Handling
Systems Design
Definition of Terms
 Facilities Location
 Placement of facility with respect to customer, suppliers
and other interfacing facilities. It also includes
orientation on a specific plot of land.

 Facility System
 Consistof structured systems, atmospheric systems,
enclosure systems, lighting/ electrical/ communication
systems, life safety systems, sanitation systems
Definition of Terms
 Layout
 Consists of all equipment, machinery, and furnishings
within the building envelope, path each component part
of a product is to follow through the plant.

 Handling System
 Consistsof the mechanisms needed to satisfy the
required facility interactions
Significance of Effective Facilities
Planning
 Optimization of Space
 Minimize Cost - 10-30%
 Damages due to handling
 Depreciation of Equipment due to handling

 Maintenance

 Promote Safety and Health

 Energy Conservation
 Objectives of Facility Planning

➢ Improve customer satisfaction

▪ Easy to do business
▪ Responding to customer needs
▪ Maximize speed for quick
customer response
➢ Increase return on assets (ROA)
▪ Maximizing inventory turns
▪ Minimizing obsolete inventory
▪ Maximizing employee participation
▪ Maximizing continuous improvement
 Objectives of Facility Planning

➢ Integrate the supply  Support

chain through organizations
partnerships and vision through
communication improved material
handling, control
and good
➢ Effective use of housekeeping
resource (people,
equipment, space
and energy)
 Objectives of Facility Planning
➢ Minimize capital ➢ Provide for
investment/Maximize employee safety
ROI/Reduce costs and and job
grow the supply chain satisfaction
profitability

➢ Be adaptable
and promote
ease of
maintenance
Classification of Facility Layout and Location
Problems

A. New Facility Characteristics

B. Existing Facility Locations
C. New and Existing Facility Interactions
D. Solution Space Characteristics
E. Distance Measure
F. Objective
A. New Facility Characteristics

Number of New
Facilities

Can Occupy

DV: Size, Configuration of the

area location

Number of New
Facilities

Based on the Location of

the other New Facilities
 B. Existing Facility Location

Characteristic
s of a Layout

Determine the
configuration and
location of Existing
Facilities
C. New and Existing Facility
Interactions

Dynamic

Magnitude
of
Interaction
D. Solution Space Characteristics

Discrete: Discrete Modules

Continuous: Consider Modules to be points

E. Distance Measure

Others

Ex. Urban location

Shortest Shortest problem in which streets
Distance Way do not form a
rectangular grid
F. Objective
Objective

Minimize Total Maximize Total

Cost/Time Profit/Revenue

Others
 Facilities Planning Process
1. Define the objectives of the facility
Define the Problem
2. Specify primary and Support Activities
3. Determine Interrelationship among all activities - Analyze the Problem
4. Determine the space requirements for all activities
5. Generate Alternative facilities plans
6. Evaluate the alternative facilities plans
7. Select a facilities plan
8. Implement the facilities plan
9. Maintain and adapt the facilities plan Implement the design
10. Redefine the objective of the facility.
Facility Planning Process
 Example: Develop a facility plan for a finished
goods warehouse of a manufacturing company. The
facility plan should include the following:
 Location of the warehouse
 Handling equipment in the warehouse

 Block layout (with dimensions)

Facility Planning Process
 Define the Problem:
 Objective(s)
of warehouse
 What are the primary activities in the warehouse

 What are the secondary activities in the warehouse

 Analyze the Problem:

 Identify
relationships between activities in the
warehouse
 What would be the basis for the relationship?

 Develop an activity relationship chart or Muther’s Grid

Activity Relationship Chart –
Muther’s Grid
Facility Planning Process
 Determine space requirements for each activity in
the warehouse
 What would be the basis for space allocation?
 Generate alternative facility plans
 Location:Identify criteria in choosing a location
 Handling equipment: Identify major handling equipment
to be used, type of storage racks to use, quantity of
storage racks and handling equipment
 Layout: Arrangement of activities inside the warehouse
following the activity relationship chart
 Facility Planning Process – FG
Warehouse
Objective(s):

Primary Activities:

Secondary Activities:
 Facility Planning Process – FG
Warehouse
Activity Receiving
Relationships:

Storage

Order Picking

Order Assembly

Shipping

Office

Miscellaneous
 Facility Planning Process – FG
Warehouse

Fr\To Receiving Storage Order Picking Order Assembly Shipping Office Miscellaneous

Receiving -

Storage 0 -

Order Picking 0 0 -

Order Assembly 0 0 0 -

Shipping 0 0 0 0 -

Office 0 0 0 0 0 -

Miscellaneous 0 0 0 0 0 0 -
Facility Planning Process
Facility Planning Process
Facility Planning Process
 Evaluate alternative plans and select the
appropriate plan
 Method: KTDA, based on costs
 Implement the design
 Method: Gantt Chart, PERT/CPM
 Develop maintenance plan

 Evaluate the warehouse design

 Improve the design – redefine the objective of the

warehouse
Additional Online Materials
 https://slideplayer.com/slide/3613899/
 https://www.youtube.com/watch?v=udF-0FivGfk