Production and Operations Management

04/08/2014
Plant Capacity, Location &
Layout
Submitted by
Sarah Ghulam M. Sheikha (13161)

Contents
TABLE OF FIGURES ........................................................................................................................................ 3
PLANT LAYOUT .............................................................................................................................................. 4
Criteria for a Good Layout......................................................................................................................... 4
Inputs to the Layout Decision ................................................................................................................... 5
Advantages of a good layout .................................................................................................................... 5
Types of Layout ......................................................................................................................................... 5
PROCESS LAYOUT .......................................................................................................................................... 6
Example of Process Layout ....................................................................................................................... 6
Characteristics of Process Layouts ............................................................................................................ 7
Process Layout Advantages: ..................................................................................................................... 7
Limitations ................................................................................................................................................ 8
PRODUCT (ASSEMBLY LINE) LAYOUT ............................................................................................................ 8
Examples of Product Layout ..................................................................................................................... 8
Characteristics of Product Layouts ........................................................................................................... 9
Product Layouts Advantages..................................................................................................................... 9
Product Layouts Limitations ................................................................................................................... 10
CELLULAR MANUFACTURING (CM) LAYOUT ............................................................................................... 10
FIXED-POSITION LAYOUTS .......................................................................................................................... 11
Examples of Fixed Position Layout .......................................................................................................... 11
HYBRID (MIXED) LAYOUTS .......................................................................................................................... 12
CELLULAR LAYOUT ...................................................................................................................................... 13
Example of Cellular Layout ..................................................................................................................... 14
Facility Layout and Design........................................................................................................................... 15
FACTORS IN DETERMINING LAYOUT AND DESIGN ................................................................................. 15
DIFFERENCES BETWEEN OFFICE AND FACTORY LAYOUTS ...................................................................... 17
VIRTUAL PROXIMITY ................................................................................................................................... 19
VIRTUAL FACTORY ....................................................................................................................................... 19
AGGLOMERATION ....................................................................................................................................... 19
DEGGLOMMERATION ................................................................................................................................. 20
References .................................................................................................................................................. 21


TABLE OF FIGURES
Figure 1 ......................................................................................................................................................... 6
Figure 2 ......................................................................................................................................................... 7
Figure 3 ......................................................................................................................................................... 8
Figure 4 ......................................................................................................................................................... 9
Figure 5 ....................................................................................................................................................... 10
Figure 6 ....................................................................................................................................................... 11
Figure 7 ....................................................................................................................................................... 14

Q1: Discuss what is a plant layout?
Describe the types of layout in details
with suitable examples.
PLANT LAYOUT
Plant Layout is the physical arrangement of equipment and facilities within a Plant.
Optimizing the Layout of a Plant can improve productivity, safety and quality of
Products. Un-necessary efforts of materials handling can be avoided when the Plant
Layout is optimized.
Plant layout techniques apply to the case where several physical means have to be
located in a certain area, either industrial processes or services. The basic objective is
to ensure a smooth flow of work, material, people and information. There are probably
two levels at which layouts are required. In one, the various departments have to be
sited, and in other the items of equipment within a department need to be located.
Criteria for a Good Layout
1. Maximum flexibility: A good layout will be one which can be rapidly modified to meet
changing circumstances.
2. Maximum co-ordination: Entry into, and disposal from, any department or functional
area should be in such a manner that it is most convenient to the issuing or receiving
departments. Layout requires to be considered as a whole and not partially.
3. Maximum use of volume: Facilities should be considered as cubic devices and
maximum use made of the volume available. This principle is particularly useful in
stores, where goods can be stacked at considerable heights without inconvenience,
especially if modern lifting devices are used. In offices, racking can be installed to
minimize use of floor space.
4. Maximum visibility: All the people and materials should be readily observable at all
the time; there should be no hidden places into which goods or information can get
mislaid.
5. Maximum accessibility: All servicing and maintenance points should be readily
accessible. For example, equipment should not be placed against a wall in such a
manner that necessary maintenance cannot easily be carried out.
6. Minimum distance: All movements should be both necessary and direct. Handling
work adds to cost but does not increase value; consequently any unnecessary or
indirect movements should be avoided.
7. Minimum handling: The best handling of material and information is no handling, but
where it is unavoidable it should be reduced to a minimum by the use of whatever
devices are most appropriate.
8. Minimum discomfort: poor lighting, excessive sunlight, heat, noise, vibration and
smells should be minimized and if possible counteracted.
9. Inherent safety
10. Maximum security
11. Efficient process flow
Inputs to the Layout Decision
1. Specification of objectives of the system in terms of output and flexibility.
2. Estimation of product or service demand on the system.
3. Processing requirements in terms of number of operations and amount of flow
between departments and work centers.
4. Space requirements for the elements in the layout.
5. Space availability within the facility itself.
Advantages of a good layout
The overall process time and cost will be minimized by reducing unnecessary handling
and movement.
Supervision and control will be simplified by the elimination of hidden corners
Changes in the programmers will be most readily accommodated.
Total output from a given facility will be as high as possible by making the maximum
effective use of available space and resources.
A feeling of unity among employees will be encouraged by avoiding unnecessary
segregation.
Quality of the products or service will be sustained by safer and more effective
methods of operation.
Types of Layout
1. Process
2. Product
3. Cellular
4. Fixed position
5. Hybrid (mixed)
PROCESS LAYOUT
Process layout or functional layout is where machines or operations are classified and
arranged according to their functions and then similar machine or operations are kept
together at one place.
It is used when the operation systems requires flexibility to deal with a variety of
products in small volumes. Not only this, it is also used when a single product requires a
variety of processes.
Figure 1 shows a process layout

Figure 1
Example of Process Layout
This type of Layout is generally employed for industries engaged in job order production
and non-repetitive kind of maintenance or manufacturing activities.A manufacturing
example of a process layout is the machine shop (Figure 2), which has separate
departments for milling, grinding, drilling, and so on.

Figure 2
Characteristics of Process Layouts
General-purpose equipment is used
Changeover is rapid
Material handling equipment is flexible
Operators are highly skilled
Technical supervision is required
Planning, scheduling and controlling functions are challenging
Production time is relatively long
In-process inventory is relatively high
Process Layout Advantages:
1. In process layout machines are better utilized and fewer machines are required.
2. Flexibility of equipment and personnel is possible in process layout.
3. Lower investment on account of comparatively less number of machines and lower
cost of general purpose machines.
4. The diversity of tasks and variety of job makes the job challenging and interesting.
5. Supervisors will become highly knowledgeable about the functions under their
department.
Limitations
1. Backtracking and long movements may occur in the handling of materials thus,
reducing material handling efficiency.
2. Material handling cannot be mechanised which adds to cost.
3. Process time is prolonged which reduce the inventory turnover and increases the in-
process inventory.
4. Lowered productivity due to number of set-ups.
5. Throughput (time gap between in and out in the process) time is longer.
PRODUCT (ASSEMBLY LINE) LAYOUT
It is used when the organization is required to produce large volumes of one standard
product. Each and every unit of production goes through the same process and the
same sequence of work. All the equipments and work centers are arranged in a line to
facilitate continuous production.
In product layouts each permits specialization of resources by diving he job in a chain or
standardized tasks. This in return leads to consistent and rapid flow of products.
Product layouts lead to high resource utilization therefore high amount of money is
invested in equipment and job design
Assembly lines are a special case of product layout. Assembly line refers to progressive
assembly linked by some material handling device. The usual assumption is that some
form of pacing is present and the allowable processing time is equivalent for all
workstations
Figure 3 shows a typical product layout of a plant.

Figure 3

Examples of Product Layout
Canteen facilities, car manufacturing unit, assembly line for air conditioner and car
washed are some of the examples of product layout
Figure 4 shows a product layout of Laundry

Figure 4

Characteristics of Product Layouts
Special-purpose equipment are used
Changeover is expensive and lengthy
Material flow is continuous
Material handling equipment is fixed
Little direct supervision is required
Planning, scheduling and controlling functions are relatively straight-forward
Production time for a unit is relatively short
In-process inventory is relatively low
Product Layouts Advantages
1. The flow of product will be smooth and logical in flow lines.
2. Throughput time is less.
3. Simplified production planning and control systems are possible.
4. Less space is occupied by work transit and for temporary storage.
5. Reduced material handling cost due to mechanized handling systems and straight
flow.
6. Perfect line balancing which eliminates bottlenecks and idle capacity.
7. Manufacturing cycle is short due to uninterrupted flow of materials.
8. Small amount of work-in-process inventory.
9. Unskilled workers can learn and manage the production.
Product Layouts Limitations
1. A breakdown of one machine in a product line may cause stoppages of machines in
the downstream of the line.
2. Lack of flexibility: A change in product design may require major alterations in the
layout.
3. The line output is decided by the bottleneck machine.
4. Comparatively high investment in equipments is required.
CELLULAR MANUFACTURING (CM) LAYOUT
In this type of Layout machines are grouped into cells. Cellular manufacturing is a type
of layout in which machines are group into clusters known as a cell. Groupings are done
on the basis of the operations needed to perform work for a set of similar items, or part
families that necessitate similar processing.
Cellular layout provides less work-in-process inventory, faster processing time, less
material handling, and reduced setup time. Used when the operations system must
handle a moderate variety of products in moderate volumes.
Figure 5 shows the difference between Functional Layout and Group Layout

Figure 5
FIXED-POSITION LAYOUTS
In the other layouts the product moves through different equipments and labor. However
in this layout men and equipment are moved to the material where the product is started
and completed. It is used where it is difficult, costly or may be impossible to move the
product due to its characteristics.
Examples of Fixed Position Layout
Following are the examples:
Fixed-position layouts are used in large construction projects (buildings, power plants,
and dams), shipbuilding, and production of large aircraft and space mission rockets.

Figure 6

Fixed-position layouts are widely used for farming, firefighting, road building, home
building, remodeling and repair.


HYBRID (MIXED) LAYOUTS
Actually, most manufacturing facilities use a combination of layout types. An example of
a hybrid layout is where departments are arranged according to the types of processes
but the products flow through on a product layout.
For instance, supermarket layouts are fundamentally of a process nature, and however
we find most use fixed-path material-handling devices such as roller-type conveyors
both in the stockroom and at checkouts, and belt-type conveyors at the cash registers.
Hospitals also use the basic process arrangement, although frequently patient care
involves more of a fixed-position approach, in which nurses, doctors, medicines, and
special equipment are brought to the patient.

Q2: Discuss in detail of Cellular Layout
with suitable examples.
CELLULAR LAYOUT

Cellular layout allocates dissimilar machines into cells to work on products that have
similar shapes and processing requirements. Cellular layouts are now widely used in
metal fabricating, computer chip manufacture, and assembly work.
A cellular layout is in which small teams of workers handle all aspects of building a
component, a family of components, or even a finished product. Each team works in a
small area, or cell, equipped with everything that it needs to function as a self-contained
unit. Machines are sometimes configured in a U-shape, with people working inside the
U. Because team members often share duties, theyre trained to perform several
different jobs. Teams monitor both the quantity and the quality of their own output. This
arrangement often results in faster completion time, lower inventory levels, improved
quality, and better employee morale. Cellular manufacturing is used by large
manufacturers, such as Boeing, Raytheon, and Pratt & Whitney, as well as by small
companies, such as Little Enterprise, which makes components for robots. Bellow is an
illustration of a typical cellular layout.
The overall objective is to gain the benefits of product layout in jobshop kinds of
production. These benefits include
1. Better human relations. Cells consist of a few workers who form a small work
team; a team turns out complete units of work.
2. Improved operator expertise. Workers see only a limited number of different parts
in a finite production cycle, so repetition means quick learning.
3. Less in-process inventory and material handling. A cell combines several
production stages, so fewer parts travel through the shop.
4. Faster production setup. Fewer jobs mean reduced tooling and hence faster
tooling changes.



Cellular Layout

Figure 7
Example of Cellular Layout

Dell computers server plant uses cellular layout
Server components begin their journey through the plant at one of two locations. In one
area, motherboards are prepped and installed into the computer chassis. In the second,
a kitting area, other components are pulled from storage racks with the aid of a
computerized pick to light system and placed into totes. From there, intelligent
conveyorslinked to a manufacturing execution systemdeliver the materials to an
open build cell using a pull process. In the cell the operator does the rest, including
putting in the screws. The next person who can open it up is the customer, says Kris
Vorm, director of server engineering. No downstream quality inspector examines the
innards of the unit, unless subsequent electronic tests indicate a pesky quality problem.
Under a buddy system, a builder will ask another operator to make a visual inspection
before he or she screws the cover onto the box. Next stop is the extended test rack,
where detailed diagnostics are conducted prior to downloading and testing the operating
system and application softwareal based on customer specifications.


Q3: Explain the physical facilities
required in an Organization/factory.
Facility Layout and Design

Facility layout and design is an important component of a business's overall operations,
both in terms of maximizing the effectiveness of the production process and meeting the
needs of employees. The basic objective of layout is to ensure a smooth flow of work,
material, and information through a system. The basic meaning of facility is the space in
which a business's activities take place. The layout and design of that space impact
greatly how the work is donethe flow of work, materials, and information through the
system. The key to good facility layout and design is the integration of the needs of
people (personnel and customers), materials (raw, finishes, and in process), and
machinery in such a way that they create a single, well-functioning system.
FACTORS IN DETERMINING LAYOUT AND DESIGN
Small business owners need to consider many operational factors when building or
renovating a facility for maximum layout effectiveness. These criteria include the
following:
1. Ease of future expansion or changeFacilities should be designed so that they
can be easily expanded or adjusted to meet changing production needs. "Although
redesigning a facility is a major, expensive undertaking not to be done lightly, there is
always the possibility that a redesign will be necessary," said Weiss and Gershon in
their book Production and Operations Management. "Therefore, any design should be
flexible'. Flexible manufacturing systems most often are highly automated facilities
having intermediate-volume production of a variety of products. Their goal is to
minimize changeover or setup times for producing the different products while still
achieving close to assembly line (single-product) production rates."
2. Flow of movementThe facility design should reflect a recognition of the importance
of smooth process flow. In the case of factory facilities, the editors of How to Run a
Small Business state that "ideally, the plan will show the raw materials entering your
plant at one end and the finished product emerging at the other. The flow need not be
a straight line. Parallel flows, U-shaped patterns, or even a zig-zag that ends up with
the finished product back at the shipping and receiving bays can be functional.
However, backtracking is to be avoided in whatever pattern is chosen. When parts
and materials move against or across the overall flow, personnel and paperwork
become confused, parts become lost, and the attainment of coordination becomes
complicated."
3. Materials handlingSmall business owners should make certain that the facility
layout makes it possible to handle materials (products, equipment, containers, etc.) in
an orderly, efficientand preferably simplemanner.
4. Output needsThe facility should be laid out in a way that is conducive to helping the
business meet its production needs.
1. Space utilizationThis aspect of facility design includes everything from making sure
that traffic lanes are wide enough to making certain that inventory storage
warehouses or rooms utilize as much vertical space as possible.
2. Shipping and receivingThe J. K. Lasser Institute counseled small business owners
to leave ample room for this aspect of operations. "While space does tend to fill itself
up, receiving and shipping rarely get enough space for the work to be done
effectively," it said in How to Run a Small Business.
3. Ease of communication and supportFacilities should be laid out so that
communication within various areas of the business and interactions with vendors
and customers can be done in an easy and effective manner. Similarly, support areas
should be stationed in areas that help them to serve operating areas.
4. Impact on employee morale and job satisfactionSince countless studies have
indicated that employee morale has a major impact on productivity, Weiss and
Gershon counsel owners and managers to heed this factor when pondering facility
design alternatives: "Some ways layout design can increase morale are obvious,
such as providing for light-colored walls, windows, space. Other ways are less
obvious and not directly related to the production process. Some examples are
including a cafeteria or even a gymnasium in the facility design. Again, though, there
are costs to be traded off. That is, does the increase in morale due to a cafeteria
increase productivity to the extent that the increased productivity covers the cost of
building and staffing the cafeteria."
5. Promotional valueIf the business commonly receives visitors in the form of
customers, vendors, investors, etc., the small business owner may want to make sure
that the facility layout is an attractive one that further burnishes the company's
reputation. Design factors that can influence the degree of attractiveness of a facility
include not only the design of the production area itself, but the impact that it has on,
for instance, ease of fulfilling maintenance/cleaning tasks.
6. SafetyThe facility layout should enable the business to effectively operate in
accordance with Occupational Safety and Health Administration guidelines and other
legal restrictions.
"Facility layout must be considered very carefully because we do not want to constantly
redesign the facility," summarized Weiss and Gershon. "Some of the goals in designing
the facility are to ensure a minimum amount of materials handling, to avoid bottlenecks, to
minimize machine interference, to ensure high employee morale and safety, and to
ensure flexibility. Essentially, there are two distinct types of layout. Product layout is
synonymous with assembly line and is oriented toward the products that are being
made. Process layout is oriented around the processes that are used to make the
products. Generally, product layout is applicable for high-volume repetitive operations,
while process layout is applicable for low-volume custom-made goods."
DIFFERENCES BETWEEN OFFICE AND FACTORY LAYOUTS
Offices and manufacturing facilities are typically designed in much different waysa
reflection of the disparate products that the two entities make. "A factory produces
things," wrote Stephen Konz in Facility Design. "These things are moved with conveyors
and lift trucks; factory utilities include gas, water, compressed air, waste disposal, and
large amounts of power as well as telephones and computer networks. A layout criterion
is minimization of transportation cost." Konz pointed out, however, that the mandate of
business offices is to produce information, whether disseminated in physical (reports,
memos, and other documents), electronic (computer files), or oral (telephone, face-to-
face encounters) form. "Office layout criteria, although hard to quantify, are minimization
of communication cost and maximization of employee productivity," wrote Konz.
Layout requirements can also differ dramatically by industry. The needs of service-
oriented businesses, for instance, are often predicated on whether customers receive
their services at the physical location of the business (such as at a bank or pet grooming
shop, for instance) or whether the business goes to the customer's home or place of
business to provide the service (as with exterminators, home repair businesses, plumbing
services, etc.) In the latter instances, these businesses will likely have facility layouts that
emphasize storage space for equipment, chemicals, and paperwork rather than spacious
customer waiting areas. Manufacturers may also have significantly different facility
layouts, depending on the unique needs that they have. After all, the production
challenges associated with producing jars of varnish or mountaineering equipment are
apt to be considerably different than those of making truck chassis or foam beach toys.
Retail outlets comprise yet another business sector that has unique facility layout needs.
Such establishments typically emphasize sales floor space, inventory logistics, foot-traffic
issues, and overall store attractiveness when studying facility layout issues.
Konz also observed that differences in factory and office layouts can often be traced to
user expectations. "Historically, office workers have been much more concerned with
status and aesthetics than factory workers," he noted. "A key consideration in many office
layouts is 'Who will get the best window location?' To show their status, executives
expect, in addition to preferred locations, to have larger amounts of space. Rank expects
more privacy and more plush physical surroundings." In addition, he stated, "Offices are
designed to be 'tasteful' and to 'reflect the organization's approach to business dealings."
Conversely, in the factory setting, aesthetic elements take a back seat to utility.
Given these emphases, it is not surprising that, as a general rule, office workers will enjoy
advantages over their material production brethren in such areas as ventilation, lighting,
acoustics, and climate control.


Q4: Define the following
VIRTUAL PROXIMITY
In case of global location because of globalization, multinational corporations are setting
up their organizations in India and Indian companies are extending their operations in
other countries. In case of global locations there is scope for virtual proximity and virtual
factory. Virtual proximity with the advance in telecommunications technology, a firm can
be in virtual proximity to its customers. For a software services firm much of its logistics
is through the information/communication pathway. Many firms use the communications
highway for conducting a large portion of their business transactions. Logistics is
certainly an important factor in deciding on a locationwhether in the home country or
abroad. Markets have to be reached. Customers have to be contacted. Hence, a market
presence in the country of the customers is quite necessary.
VIRTUAL FACTORY
Virtual factory many firms based in USA and UK in the service sector and in the
manufacturing sector often outsources part of their business processes to foreign
locations such as India. Thus, instead of ones own operations, a firm could use its
business associates operations facilities. The Indian BPO firm is a foreign-based
companys virtual service factory. So a location could be ones own or ones business
associates. The location decision need not always necessarily pertain to own
operations.
AGGLOMERATION
LOCATION THEORIES ALFRED WEBERS THEORY OF THE LOCATION OF
INDUSTRIES Alfred Weber (18681958), with the publication of Theory of the Location
of Industries in 1909, put forth the first developed general theory of industrial location.
His model took into account several spatial factors for finding the optimal location and
minimal cost for manufacturing plants. The point for locating an industry that minimizes
costs of transportation and labour requires analysis of three factors:
1. The point of optimal transportation based on the costs of distance to the material
indexthe ratio of weight to intermediate products (raw materials) to finished product.
2. The labour distortion, in which more favourable sources of lower cost of labour may
justify greater transport distances.
3. Agglomeration and degglomerating.
Agglomeration or concentration of firms in a locale occurs when there is sufficient
demand for support services for the company and labour force, including new
investments in schools and hospitals. Also supporting companies, such as facilities that
build, service machines and financial services, prefer closer contact with their
customers.
DEGGLOMMERATION
Degglommeration occurs when companies and services leave because of over
concentration of industries or of the wrong types of industries, or shortages of labour,
capital, affordable land, etc.


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