FACILITY LAYOUT AND LOCATION MANAGEMENT
Jan Melotík
University of national and world economics
Student, Business economics
III.Course
Abstract:
For an organization to have an effective and efficient manufacturing unit, it is important that special attention is given to facility layout.Suitable facility layout and location can strongly increase the effectivity of the production and thus company´s output. That is why I decided to describe this topic. This work include facility layout objectives, factors which affect facility layout and describe particular kinds of facility layouts
Key words: Facility layout, Facility location, Design of facility layout
Introduction:
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 and thus gain competitive advantage. That´s crucial especially for the companies in highly competitive environment.
1. Facility Layout Management
1.1. Significance of Facility Layout Management
Professional facilities management aims to coordinate the demand and supply of facilities and services within public and private organizations. Facilities management refers to a broad range of activities, such as building services management, environmental issues, workspace management, procurement, financial management, etc. (Tranchard, 2016)
For most manufacturingoperationsthegoalisrelativelysimple: develop a leanmanufacturingsystem to streamlineproduction and ensure a smoothflowofwork, material, and information. In theworldofmanufacturing, theoldadageistrue: timereallyismoney. (Harman, 2014)
Thespiritalarrangementsinside a company (itsoperations and production facility) are equallyimportanttowardsfacilitatingthefulfillmentofthecustomer´sneeds.
Easy and uninterruptedflowsofmaterials and/orpeople are necessaryforreducedtimes to manufacture a productorprovide a service. Interruptionsmayalsomean more inventories and a wastefulblockingof much neededcapital.
The very samemachines, sameequipment, sameemployees and thesamequalityofmaterialcanproduce very differentresults in termsoftheproductivity – usageofthetime, capital, material, and humanresource – whenthephysical layout fortheequipment and peopleisdifferent. (Chary, 2009, p29-1).
An effective facility layout ensuresthatthereis a smooth and steadyflowofproductionmaterial, equipment and manpowerat minimum cost. Facility layout looksatphysicalallocationofspaceforeconomicactivity in the plant. Therefore, mainobjectiveofthe facility layout planningis to design effectiveworkflow as to make equipment and workers more productive.
1.2. Facility location
Choosing a facility locationrequiressignificantfinancialinvestment, and thereforeprudentplanning, to ensurethelocationisthe most cost-effective and functionalofallyouroptions. Utilize a broadfinancialviewofeachproposedsite, takingintoaccount not onlyitspurchaseorleasecost but themoneyputintoitoverthe long term.
Facility Locationistherightlocationforthemanufacturing facility, itwillhavesufficientaccess to thecustomers, workers, transportation,etc. Forcommercialsuccess, and competitiveadvantagefollowing are thecriticalfactors:
Overallobjectiveofanorganizationis to satisfy and delightcustomerswithitsproduct and services. Therefore, foranorganizationitbecomesimportant to havestrategyformulatedarounditsmanufacturing unit. A manufacturing unit isthe place whereallinputs such as rawmaterial, equipment, skilledlabors,etc. cometogether and manufactureproductsforcustomers. Oneofthe most criticalfactorsdeterminingthesuccessofthemanufacturing unit isthelocation.
Facility locationdeterminationis a business criticalstrategicdecision. There are severalfactors, whichdeterminethelocationof facility amongthemcompetition, cost and correspondingassociatedeffects. Facility locationis a scientificprocessutilizingvarioustechniques.
1.2.1. Factors influencing facility location
1) Layout - The physical layout of the facility location will determine whether future expansion can include adding more facility buildings and enlarging manufacturing space within the site. Whether buildings and manufacturing lines must be created by scratch or they are already exist on-site with minimal renovations is also a consideration.
2) Cost - The cost of relocating facilities to the site is a major factor in determining the acceptability of a location. Cost can involve tailoring existing buildings to fit your operations or building an operation from scratch. Land may be cheap, but to make it workable might be expensive.
3) Logistics - The site must have adequate transportation routes to get goods to and from the site. The facility itself must come equipped with adequate electrical and plumbing to run an effective operation; if they don't yet exist they must be cheap enough to install at the site.
4) Labour - A facility requires labour to run. Management staff might relocate from other areas, but on the ground workers are sourced locally. A facility close enough to a municipality with a healthy supply of labour to operate it is a necessity.
5) Political Stability - An unstable local government that puts smooth operations at risk are a deterrent to choosing to locate there.
6) Regulations - Stringent local environmental regulations that limit the nature of business operations can deter a company from choosing a particular location. In addition, government regulations and taxes of various kinds can prove costly down the line. On the flip side, government tax incentives that encourage corporate development can prove a benefit to certain locales.
7) Community - It is key that your company fits with the community it's associated with. Although the municipality might appreciate company's facility because it creates jobs, some might resent company´s presence because of aesthetics or environmental factors. Maintaining a hassle-free relationship with the locals helps ensure licenses and permits are easier to obtain and maintain over the life of the site. (Lovering, 2017)
8) Customer Proximity - Facility locations are selected closer to the customer as to reduce transportation cost and decrease time in reaching the customer. This may also help the company to reach more customers.
1.3. Facility layout objective
A model facility layout should be able to provide an ideal relationship between raw material, equipment, manpower and final product at minimal cost under safe and comfortable environment.
Therecanbe many reasons to whytheexistingproduction facility layout isn’toptimal. Theexisting facility mayimposerestrictions on thechoiceof a good layout, existing layout may not haveprovisionsforfutureexpansionorchanges to theproduct mix, layout planningisentrusted to unqualifiedpersons, poorpreventivemaintenanceresults in machinebreakdownwhichfurtherleads to more machines/equipment to keep up withdemand, relatedlaws and localrestrictionshavechanged and preventanoptimal layout from a productionperspective.
There are many challenges to befacedwhenimprovingtheproduction facility layout. Forexampleimprovingtheproduction facility layout isoftentime-consuming and costly. Oneofthereasonsisthatitisoftencomplicated to constructivelydiscuss and comparedifferent layout options. Theprocessisoftenprone to subjectivitydue to missingfacts and data. It isimportant to understandthatplanningforchanges to the layout requiresspecializedskills, experience and understandingoftheproductionprocess.
Objectivesof a good plant layout are:
1. Providingcomfort to theworkers
2. Givinggoodand improvedworkingconditions
3. Minimizingdelays in production and makingefficient useofthespacethatisavailable
4. Havingbettercontrolovertheproductioncycle by havinggreater flexibility forchanges in the design oftheproduct (Singh, 2010)
1.4. Factors in determining facility layout
Some enterprises can produce 5-10 times more than their competitors with the same equipment and amount of employees. The difference may be evoked by different production method or facility layout. (Němec, 2002, p. 57)
For the purpose of choosing correct form of organization of production it is necessary to take many factors into consideration. There are many of them which have considerable impact for the production output and final results.
1)Ease of future expansion or change - Facilities 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. 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 movement - The facility design should reflect a recognition of the importance of smooth process flow. Ideally, the plan will show the raw materials entering the 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 handling - Small business owners should make sure that the facility layout makes it possible to handle materials (products, equipment, containers, etc.) in an orderly, efficient - and preferably simple - manner.
4) Output needs - The facility should be laid out in a way that is conducive to helping the business meet its production needs.
5) Space utilization - This 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.
6) Ease of communication and support - Facilities 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.
7) Impact on employee morale and job satisfaction - 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.
8) Promotional value - If 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.
9) Safety - The facility layout should enable the business to effectively operate in accordance with Occupational Safety and Health Administration guidelines and other legal restrictions.
10) Specialization - specialization of production character affect especially frequency of occurrence in logistic chain and flexibility of the whole production process. According to character of processes there works one or more employee on the workplace. And according to frequency of batch in production process are the worplaces specialized for one or more operations or processes. There are two basic categories of workplace layout:
1. Individual workplace layout – it is used for that kind of production where it is too difficult to find similarities between two or more processes or lay out facilities in one workplace. Processes are not in regular frequencies or occur once in a lifetime. It is typical for repair shops, prototype or experimental workrooms, etc.
2. Group workplace layout –workplaces are clustered according to its characteristics similarities. For instance, its function or tools using during the processes. It is crucial to take particular conditions, especially frequency of processes into consideration. (Tvrdoň et al., 2014, p. 97)
1.5. Design of facility layout
Principleswhich drive design ofthe facility layout need to takeintotheconsiderationobjectiveof facility layout, factorsinfluencing facility layout and constraintsof facility layout. These principles are as follows:
1) Flexibility - Facility layout shouldprovide flexibility forexpansionormodification.
2) SpaceUtilization - Optimumspaceutilizationreducesthetime in material and peoplemovement and promotessafety.
3) Capital - Capitalinvestmentshouldbeminimalwhenfinalizingdifferentmodelsof facility layout.
There are threetechniquesof design layout:
1)TwoorThreeDimensionalTemplates: Thistechniqueutilizes development of a scaled-down model based on approveddrawings.
2) SequenceAnalysis: Thistechniqueutilizescomputer technology in designingthe facility layout by sequencingoutallactivities and thenarrangingthem in circularor in a straight line.
3) Line Balancing: Thiskindoftechniqueisusedforassembly line.
1.6. Types of facility layout
1.6.1. Line Layout - may be an assembly line or a manufacturing line. This may be automatic or manual. This includes I-shaped lines, S-shaped lines, L-shaped lines, and or course the famous U-shaped line. While this is a great solution, it may not fit all problems. Depending on the surrounding conditions, a different line layout may be beneficial. Effective line layout should be oriented from inbound warehouse to outbound warehouse with transportation as little as possible. It is more effective if the line starts closer to the source and ends closer to the drain of the material flow.Depending on the amount and especially the size of the material, it is important to consider how to supply the material. It can be delivered overhead or from the floor above, or through underground conveyor or delivery system, it can be handled by hand, or it is needed a crane, forklifttruck or other mechanical lifting device. (Roser, 2016)
1.6.2. Functional Layout- equipment is grouped according to the function it performs (such as machining department, welding department, finishing department) and not in the sequence of operations performed. (Business Dictionary, 2017)
1.6.3. Fixed Position Layout - In fixed position layout, the main product being produced is fixed at a particular location. Resources, such as equipment, labour and material are brought to that fixed location. This type of layout is useful when the product being processed is very big, heavy or difficult to move. Some examples of fixed position layout are shipbuilding, aircraft assembly, wagon building, etc.
1.6.4. Combined Layout - Many situations call for a mixture of the three main layout types. These mixtures are commonly called combination or hybrid layouts. For example, one firm may utilize a functional layout for the majority of its process along with an assembly in one area. Alternatively, a firm may utilize a fixed-position layout for the assembly of its final product, but use assembly lines to produce the components and subassemblies that make up the final product. (Inman, 2007)
1.6.5. Cellular Technology Layout - machines are grouped according to the process requirements for a set of similar items that require similar processing. These groups are called cells.
Processes are grouped into cells using a technique known as group technology (GT). Group technology involves identifying parts with similar design characteristics (size, shape, and function) and similar process characteristics (type of processing required, available machinery that performs this type of process, and processing sequence).
Workers in cellular layouts are cross-trained so that they can operate all the equipment within the cell. In some cases a cell is formed by dedicating certain equipment to the production of a family of parts without actually moving the equipment into a physical cell (these are called virtual or nominal cells). In this way, the firm avoids the burden of rearranging its current layout. However, physical cells are more common.
An automated version of cellular manufacturing is the flexible manufacturing system (FMS). With an FMS, a computer controls the transfer of parts to the various processes, enabling manufacturers to achieve some of the benefits of product layouts while maintaining the flexibility of small batch production.
Some of the advantages of cellular manufacturing:
1)Cellular manufacturing provides faster processing time, less material handling, less work-in-process inventory, and reduced setup time, all of which reduce costs.
2)Cellular manufacturing allows for the production of small batches, which provides some degree of increased flexibility. This aspect is greatly enhanced with FMSs.
3)Since workers are responsible for their cells output, more autonomy and job ownership is present.
Conclusion:
Toensurethelocationisthe most cost-effective andfunctionalofallyouroptionsitiscrucial to considervariousfactors (Layout, cost, Logistics, Labour, Political stability, Regulations, CommunityorCustomerproximity). Withsuitable facility layout wecanavoiddelaysorwaiting in production, reducetransportationcosts, increasethecontrolofproductionorprovidehighercomfort to ouremployees. Maintypesof facility layoutsare - line layout (wherebelongsfor instance I-line layout, L-line layout orfamous U-line layout), functional layout, fixedposition layout, cellular technology layout orcombined layout, whichcombine 2 or more kindsofabovespecified facility layouts.
References:
Chary, S.N. (2009). Production and Operational Management, India: Bangalore, Indian Institute of Management, Bangalore.
Němec, František (2002). VýrobníLogistika pro Ekonomy (Production Logistics for Economist), Czech Republic: Opava, SlezskáUniversita v Opavě.
Tvrdoň, L., Klabusayová, N., Macurová, P. (2014). Logistika, Czech Republic: Ostrava, VysokáŠkolaBáňská-TechnickáUniverzita Ostrava.
Internet site:
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