Layout Strategy

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Chapter 9 Layout Strategies Learning Objectives
When you complete this chapter, you should be able to:
1. Discuss important issues in office layout
2. Define the objectives of retail layout

3. Discuss modern warehouse management and terms such as ASRS, cross-docking, and random stocking 4. Identify when fixed-position layouts are appropriate © 2011 Pearson Education, Inc. publishing as Prentice Hall 9-1

Learning Objectives
When you complete this chapter, you should be able to:
5. Explain how to achieve a good processoriented facility layout 6. Define work cell and the requirements of a work cell

7. Define product-oriented layout
8. Explain how to balance production flow in a repetitive or product-oriented facility © 2011 Pearson Education, Inc. publishing as Prentice Hall 9-2

Innovations at McDonald’s
 Indoor seating (1950s)
 Drive-through window (1970s)

 Adding breakfast to the menu (1980s)
 Adding play areas (late 1980s)  Redesign of the kitchens (1990s)  Self-service kiosk (2004)  Now three separate dining sections © 2011 Pearson Education, Inc. publishing as Prentice Hall 9-3

Strategic Importance of Layout Decisions
The objective of layout strategy is to develop an effective and efficient layout that will meet the firm’s competitive requirements

© 2011 Pearson Education, Inc. publishing as Prentice Hall

9-4

Types of Layout
1. Office layout

2. Retail layout
3. Warehouse layout

4. Fixed-position layout
5. Process-oriented layout

6. Work-cell layout
7. Product-oriented layout
© 2011 Pearson Education, Inc. publishing as Prentice Hall 9-5

Layout Strategies
Objectives
Office Locate workers requiring frequent contact close to one another Expose customer to highmargin items

Examples
Allstate Insurance Microsoft Corp. Kroger’s Supermarket Walgreen’s Bloomingdale’s

Retail

Warehouse (storage)
Project (fixed position)

Balance low cost storage with low-cost material handling
Move material to the limited storage areas around the site

Federal-Mogul’s warehouse
The Gap’s distribution center Ingall Ship Building Corp. Trump Plaza Pittsburgh Airport

Table 9.1
© 2011 Pearson Education, Inc. publishing as Prentice Hall 9-6

Layout Strategies
Objectives
Job Shop (process oriented) Work Cell (product families) Repetitive/ Continuous (product oriented) Manage varied material flow for each product

Examples
Arnold Palmer Hospital Hard Rock Cafe Olive Garden

Identify a product family, build teams, cross train team members

Hallmark Cards

Wheeled Coach
Standard Aero

Equalize the task time at each Sony’s TV assembly line workstation Toyota Scion

Table 9.1
© 2011 Pearson Education, Inc. publishing as Prentice Hall 9-7

Relationship Chart

Figure 9.1
© 2011 Pearson Education, Inc. publishing as Prentice Hall 9-8

Supermarket Retail Layout
 Objective is to maximize profitability per square foot of floor space  Sales and profitability vary directly with customer exposure

© 2011 Pearson Education, Inc. publishing as Prentice Hall

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Store Layout

Figure 9.2
© 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 10

Retail Slotting
 Manufacturers pay fees to retailers to get the retailers to display (slot) their product  Contributing factors
 Limited shelf space  An increasing number of new products

 Better information about sales through POS data collection  Closer control of inventory
© 2011 Pearson Education, Inc. publishing as Prentice Hall 9 - 11

Retail Store Shelf Space Planogram
 Computerized tool for shelfspace management
5 facings
Shampoo Shampoo Shampoo Shampoo Shampoo

 Generated from store’s scanner data on sales  Often supplied by manufacturer © 2011 Pearson Education, Inc. publishing as Prentice Hall

Conditioner

Shampoo

Shampoo

Shampoo

Shampoo

Conditioner

Conditioner

2 ft.
9 - 12

Servicescapes
1. Ambient conditions - background...
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