Developing Layout Strategies

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Production and Operations Management Chapter 9: Developing Layout Strategies

Submitted in partial completion of the requirements For the course Production and Operations Management

Submitted by: Dote, Jane Frances A.

Submitted to: Dr. Pedrito A. Salvador

January 29, 2011 2nd Term, School Year 2010-2011

PRODUCTION AND OPERATIONS MANAGEMENT

CHAPTER 9: DEVELOPING LAYOUT STRATEGIES The objective of office layout strategy is to develop a cost-effective layout that meets a firm’s competitive needs. There are seven types of layout: 1. Office layout – positions of workers and their equipments to provide movement 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 projects 5. Process-oriented layout – deals with low-volume, high-variety production 6. Work-cell layout – arranges machinery and equipment to focus on production of single or group related products 7. Product-oriented layout – seeks the best personnel and machine utilization in continuous production Office layout is the grouping of workers, their equipment and spaces to provide for comfort, safety and movement of information. The main distinction of office layouts is the importance placed on the flow of information. Managers examine both electronic and conventional communication patterns, separation needs and other conditions affecting employee effectiveness. A useful tool is the relationship chart. Retail layout is an approach that addresses flow, allocates space and responds to customer behavior. The main objective of retail layout is to maximize profitability per square foot of floor space. Warehouse layout is a design that attempts to minimize total cost by addressing trade-offs between space and material handling. The objective is to find the optimum trade-off between handling cost and costs associated with warehouse space. Modern warehouse management is an automated procedure using automated storage and retrieval systems (ASRSs). ASRSs are reported to improve productivity by an estimated 500% over manual methods. An important component of warehouse layout is the relationship between receiving/unloading area and the shipping/loading area. Cross-docking means avoiding the placement of materials or supplies in storage by processing them as they are received for shipment. It reduces product handling, inventory and facility costs but it requires both tight scheduling and accurate inbound product identification.

Random stocking is used in warehousing to locate stock wherever there is an open location. It can increase facility utilization and decrease labor cost but they require accurate records. Customizing is using warehousing to add value to a product through component modification, repair, labeling and packaging. It is particularly useful way to generate competitive advantage in markets with rapidly changing products. Fixed-position layout is a system that addresses the layout requirements of stationary projects. Techniques for addressing the fixed-position layout are not well developed and are complicated by three factors such as limited space, different stages need different materials and volume of materials is dynamic. Process-oriented layout is a layout that deals with low-volume, high-variety production in which like machines and equipment are grouped together. It is most efficient when making products with different requirements or when handling customers, patients, or clients with different needs. Process-oriented facilities try to minimize loads or trips, times distance-related costs. Work cell is an arrangement of machines and personnel that focuses on making a single product or family of related products. Advantages of work cell include: (1) reduced work-in-process inventory; (2) less floor space; (3) reduced raw material and finished goods...
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