Chapter

Web resources for

this chapter include
OM Tools Software
Capacity and
7
Internet Exercises
Online Practice Quizzes Facilities Design
Lecture Slides in
PowerPoint In this chapter, you will learn about . . .
Virtual Tours Capacity Planning
Excel Exhibits
Facilities
Company and Resource
Weblinks Basic Layouts
[Link]/college/russell Designing Process Layouts

Designing Service Layouts

Designing Product Layouts

Hybrid Layouts

Capacity and Facilities Design

AT THE NEW ENGLAND
CONFECTIONERY COMPANY

N
ECCO (THE NEW ENGLAND
CONFECTIONERY COMPANY) is the oldest multi-
line candy manufacturer in the United States, best
known for its popular “conversational” line of candy hearts. In recent
years, the company has closed its venerable Boston facility and consolidated
three other facilities into a state-of-the art manufacturing and distribution
center in Revere, Massachusetts.
The move enabled the company to completely reassess every step of its
production process, including work flow and staffing, to come up with a new
layout design that moved candy more quickly from the factory floor to the
customer. The new 820,000-square-foot facility is home to 586,000 square
feet of production area, 200,000 square feet of warehouse space, and 30,000
square feet of office space. The facility has over 30 different process lines
capable of manufacturing over 70 million pounds of candy per year. The
building has two stories, with processing operations on the second floor
feeding packaging operations on the first floor. A key to cutting cycle times
was eliminating the extremely long assembly lines that snaked through the
258 Part 1 • Operations Management

old building and establishing more efficient work cells with smaller assembly
lines where workers have access to everything they need.
By consolidating three facilities into one, NECCO’s delivery time to the
customer improved significantly. The company puts each of its top candy lines
into one of three categories, based on ABC analysis (see Chapter 13). Customer
orders for A items can be delivered in 5 days, B items in 10 days, and C items in
15 days. The new facility also has allergen rooms for panning chocolate to
isolate products with nuts from those without, an important requirement for
many of today's consumers. Visitors agree that the new plant is clean, well
organized, and high-tech. The process of designing the new facility allowed
NECCO to better meet regulations, reduce operating costs, expand capacity,
improve customer service, and grow its business.
Effective facility design can have immeasurable benefits to a company. In
this chapter, we'll talk about the importance of facility design and explore
different types of facility layouts for both manufacturing and service
operations.

Source: David Weldon, “Sweet Surroundings,” Food and Drink Digital, July 2007, and the
NECCO company Web site at [Link].

CAPACITY PLANNING
Capacity: Capacity is the maximum capability to produce. Capacity planning takes place at several levels of
the maximum capability to produce. detail. We discuss long-term capacity planning in this chapter, intermediate term capacity plan-
ning in Chapter 14, and short-term capacity planning in Chapters 15 and 16.
Capacity planning: Long-term capacity planning is a strategic decision that establishes a firm’s overall level of re-
establishes the overall level of sources. It extends over a time horizon long enough to obtain those resources—usually a year or
productive resources for a firm. more for building or expanding facilities or acquiring new businesses. Capacity decisions affect
product lead times, customer responsiveness, operating costs, and a firm’s ability to compete. In-
adequate capacity can lose customers and limit growth. Excess capacity can drain a company’s re-
sources and prevent investments in more lucrative ventures. When to increase capacity and how
much to increase it are critical decisions.
Figure 7.1 a, b, and c show three basic strategies for the timing of capacity expansion in rela-
tion to a steady growth in demand.

• Capacity lead strategy. Capacity is expanded in anticipation of demand growth. This aggres-
sive strategy is used to lure customers from competitors who are capacity constrained or to
gain a foothold in a rapidly expanding market. It also allows companies to respond to unex-
pected surges in demand and to provide superior levels of service during peak demand periods.
As demand grows, a lead, lag, • Average capacity strategy. Capacity is expanded to coincide with average expected demand.
or average capacity strategy This is a moderate strategy in which managers are certain they will be able to sell at least
can be applied. some portion of expanded output, and endure some periods of unmet demand. Approximately
half of the time capacity leads demand, and half of the time capacity lags demand.
• Capacity lag strategy. Capacity is increased after an increase in demand has been documented.
This conservative strategy produces a higher return on investment but may lose customers in the
process. It is used in industries with standard products and cost-based or weak competition. The
strategy assumes that lost customers will return from competitors after capacity has expanded.
 Chapter 7 • Capacity and Facilities Design 259

(a) Capacity lead strategy (b) Capacity lag strategy Figure 7.1
Capacity
Expansion
Strategies
Capacity Demand

Units Units
Demand
Capacity

Time Time

(c) Average capacity strategy (d) Incremental versus one-step expansion

One-step expansion
Capacity

Units Units
Incremental
expansion
Demand

Demand
Time Time

Consider higher education’s strategy in preparing for a tripling of the state’s college-bound pop- Capacity can be increased
ulation in the next decade. An established university, guaranteed applicants even in lean years, may incrementally or in large
follow a capacity lag strategy. A young university might lead capacity expansion in hopes of captur- steps.
ing students not admitted to the more established universities. A community college may choose the
average capacity strategy to fulfill its mission of educating the state’s youth but with little risk.
How much to increase capacity depends on (1) the volume and certainty of anticipated de-
mand; (2) strategic objectives in terms of growth, customer service, and competition; and (3) the
costs of expansion and operation.
Capacity can be increased incrementally or in one large step as shown in Figure 7.1d. Incre-
mental expansion is less risky but more costly. An attractive alternative to expanding capacity is
outsourcing, in which suppliers absorb the risk of demand uncertainty.
The best operating level for a facility is the percent of capacity utilization that minimizes average Best operating level:
unit cost. Rarely is the best operating level at 100% of capacity—at higher levels of utilization, pro- is the percent of capacity utilization
ductivity slows and things start to go wrong. Average capacity utilization differs by industry. An that minimizes unit costs.
industry with an 80% average utilization would have a 20% capacity cushion for unexpected surges in
demand or temporary work stoppages. Large-capacity cushions are common in industries in which Capacity cushion:
demand is highly variable, resource flexibility is low, and customer service is important. Utilities, is the percent of capacity held in
for example, maintain a 20% capacity cushion. Capital-intensive industries with less flexibility and reserve for unexpected
higher costs maintain cushions under 10%. Airlines maintain a negative cushion by overbooking occurrences.
flights. Best operating level can also refer to the most economic size of a facility.
Diseconomies of scale:
Figure 7.2 shows the best operating level—in this case, the number of rooms for a hotel—as
when higher levels of output cost
the point at which the economies of scale have reached their peak and the diseconomies of scale
more per unit to produce.
have not yet begun.
Economies of scale occur when it costs less per unit to produce or operate at high levels of out- Economies of scale:
put. This holds true when: when it costs less per unit to
produce high levels of output.
• Fixed costs can be spread over a larger number of units,
• Production or operating costs do not increase linearly with output levels,
260 Part 1 • Operations Management

Figure 7.2
Best Operating
Level for a Hotel

Average cost per room

le
Ec a
on f sc
o mi ie so
es Best operating m
of
level ono
sca
sec
le Di

250 500 1000

Number of rooms in hotel

• Quantity discounts are available for material purchases, and

• Operating efficiency increases as workers gain experience.
The electronics industry provides a good case example of economies of scale. The average cost
per chip placement for printed circuit-board assembly is 32 cents in factories with a volume of
25 million placements, 15 cents in factories with 200 million placements, and only 10 cents in
factories with 800 million placements.1
Capacity decisions provide a framework for further facility decisions, such as where to locate
a new facility and how to arrange the flow of work in the facility. Facility location is discussed in
the supplement to this chapter. The remainder of the chapter presents various alternatives for lay-
ing out a facility.

Kuala Lumpur International

(KLIA) is a Green certified
airport with spectacular
architecture. Shown here,
the outside of the terminals
resemble Bedouin tents.
Inside, trees and other
vegetation, along with
waterfalls and streams,
recreate a rain forest
environment. The airport can
handle 25 million passengers
a year, and is a major cargo
hub for the Asian-Pacific
region.

© Gavin Hellier/Alamy

1
“High Volumes Yield Profits for High-Tech Factories.” HE Solutions (April 1996), p. 8.
 Chapter 7 • Capacity and Facilities Design 261

FACILITIES
Facilities make a difference. They can provide a competitive edge by enabling and leveraging the
latest process concepts. For example, Bank of America, featured in the “Along the Supply Chain”
box has created an exemplary facility showcasing green design. Green buildings can save energy
costs and increase worker productivity. Facility design has an impact on both quality and produc-
tivity. Facilities affect how efficiently workers can do their jobs, how much and how fast goods
can be produced, how difficult it is to automate a system, and how responsive the system can be to
changes in product or service design, product mix, or demand volume. Facilities must be planned,
located, and laid out.
Facility layouts are more flexible than ever before. Factories that once positioned shipping and
receiving departments at one end of the building, now construct t-shaped buildings so that deliver-
ies can be made directly to points of use within the factory. Stores sport portable kiosks for cus-
tomer inquiry and checkout at various locations throughout the facility. Classrooms incorporate
desks on wheels to be repositioned for different teaching styles and student interaction. Effective
layouts can have many different objectives.

OBJECTIVES OF FACILITY LAYOUT

Facility layout refers to the arrangement of activities, processes, departments, workstations, storage Facility layout:
areas, aisles, and common areas within an existing or proposed facility. The basic objective of the the arrangement of areas within
layout decision is to ensure a smooth flow of work, material, people, and information through the a facility.
system. Effective layouts also:
• Minimize movement and material handling costs; Facility layout decisions
• Utilize space efficiently; involve multiple objectives.
• Utilize labor efficiently;
• Eliminate bottlenecks;
• Facilitate communication and interaction between workers, between workers and their super-
visors, and between workers and customers;
• Reduce manufacturing cycle time and customer service time;
• Eliminate wasted or redundant movement;
• Facilitate the entry, exit, and placement of material, products, and people; Layout decisions affect
• Incorporate safety and security measures; quality and competitiveness.
• Promote product and service quality;
• Encourage proper maintenance activities;
• Provide a visual control of activities;
• Provide flexibility to adapt to changing conditions;
• Increase capacity.

A L O N G T H E S U P P LY C H A I N

Bank of America’s Towering Achievement Building Council’s code for

in Green Design the best practices, materials, • Internet
Green facility design is evolving fast, demanding that de- and systems in green build-
signers and builders adapt to new methods and technologies ings. A platinum rating is the Exercises
with every project. To date, the Bank of America Tower in Council’s highest measure of
New York City is the world’s greenest skyscraper. Its un- achievement.
precedented use of recycled and energy-saving materials in While Bank of American (BoA) estimates it costs an extra
construction, along with incredible advances in water and 5%, or around $65 million, too green the building, with millions
energy efficiency, earned the building a platinum certifica- of dollars in energy savings each year, and tens of millions in
tion under the LEED (Leadership in Energy and Environ- savings from fewer sick days and increased productivity, the
ment Design) rating system. LEED is part of the U.S. Green project is expected to pay for itself within two to three years.
(Continued)
262 Part 1 • Operations Management

Nearly 48 inches of rain falls on Clean, oxygen-rich air delivers big

New York City every year. At BoA productivity gains. The BoA tower acts
Tower, most of this water is recycled like a 55-story air purifier, with filters that
for the building’s use. The tower catch 95% of particulate matter, allergens,
funnels precipitation from its tall slant- ozone, and other compounds that can
ing roofs and low green-roofed atrium cause illness. Oxygen sensors trigger in-
into four holding tanks. The tanks, po- jections of fresh air into crowded spaces
sitioned at various locations through- to energize workers and prevent “meeting
out the building’s core, are used to feed room coma.”
the A/C system, flush toilets, and irri- Shipping electricity via power lines
gate plants. Water is also harvested over long distances can waste 70% of the
from condensation on the air condi- fuel’s energy. Not so at BoA tower where
tioning system, and from the small they make most of their own electricity.
flow of groundwater that seeps through Inside the tower’s podium level is a
the bedrock of the tower’s basement. super-efficient 5.1 megawatt power plant
With rainwater capture, clean water running on clean-burning natural gas, and
recycling and water conservation (such housed in the smaller of the two spires of
as waterless urinals), BoA expects to the tower is a wind turbine. Together
save 10.3 million gallons of water per these power sources generate enough en-
year, enough to meet the annual water © Ambient Images Inc. /SuperStock ergy to meet four-fifths of the tower’s
needs of 125 households. peak needs.
Studies show that students and workers perform better Reducing peak energy needs is another one of BoA’s
in fresh-air, naturally-lit environments. At BoA Tower, 9.5- goals. To chill the A/C system, the tower makes ice during
foot-tall floor-to-ceiling windows made of “low iron” glass nonpeak periods and stores it in 44 10⬘ ⫻ 10⬘ cylindrical ice
are both more transparent and more insulating than conven- tanks. The old-fashioned ice-house cuts power consumption
tional glass. Transparent walls separating work areas flood by 50% during the hottest of summer days.
the building with light and give most workers some view of Normally, a tower of this scale built in New York City
daylight. Ceiling-mounted photo and motion sensors con- would include hundreds of basement parking spots. By de-
tinually adjust overhead lights, turning them down when sign, at BoA Tower, there are zero parking spaces. Instead,
natural light is bright or when rooms are empty. The system new pedestrian tunnels connect the building to 17 subway
helps the building cut its demand for electric lighting lines, more than any other station in New York City. The
by 25%. tower also has secure bike storage and shower access for
It is a fact that heat rises. Yet most buildings pump cooled those employees bicycling to work.
air into overhead ductwork and extract warm air through The Bank of America Tower in New York City is not
another set of ceiling exhaust vents. At BoA tower, one set only a visually stunning 1000-foot-tall skyscraper built in
of ductworks is eliminated. Cool air is pumped into a space the heart of Manhattan; it is also a model of environmental
below the building’s raised floors. As workers and office awareness in facility design and operation.
equipment warm the air in their workspace, the heated air
rises to the ceiling exhaust vents. This in turn pulls chilled Find out which buildings in your area are LEED certified.
air up from below. The system improves air quality, as well,
by eliminating miles of chilled, moist ductwork, where bac- Source: Adapted from Adam Ashton, “Bank of America’s Bold
teria, mold, and mildew often grow. Statement in Green,” BusinessWeek, March 19, 2007, pp. 22–23.

BASIC LAYOUTS
Layouts can take many different forms. In the next section, we discuss three basic layout types:
process, product, and fixed-position. Later in the chapter, we discuss three hybrid layouts: cellular
layouts, flexible manufacturing systems, and mixed-model assembly lines.
Process layouts:
group similar activities together PROCESS LAYOUTS
according to the process or Process layouts, also known as functional layouts, group similar activities together in departments
function they perform. or work centers according to the process or function they perform. For example, in a machine
 Chapter 7 • Capacity and Facilities Design 263

Figure 7.3
Women’s
Shoes Housewares A Process Layout
lingerie
in Services
Women’s Cosmetics Children’s
dresses and jewelry department

Entry
Women’s Men’s
and display
sportswear department
area

shop, all drills would be located in one work center, lathes in another work center, and milling
machines in still another work center. In a department store, women’s clothes, men’s clothes,
children’s clothes, cosmetics, and shoes are located in separate departments. A process layout is
characteristic of intermittent operations, service shops, job shops, or batch production, which
serve different customers with different needs. The volume of each customer’s order is low, and
the sequence of operations required to complete a customer’s order can vary considerably.
The equipment in a process layout is general purpose, and the workers are skilled at operating the
equipment in their particular department. The advantage of this layout is flexibility. The disadvantage
is inefficiency. Jobs or customers do not flow through the system in an orderly manner, backtracking
is common, movement from department to department can take a considerable amount of time, and
queues tend to develop. In addition, each new arrival may require that an operation be set up differ-
ently for its particular processing requirements. Although workers can operate a number of machines
or perform a number of different tasks in a single department, their workload often fluctuates—from
queues of jobs or customers waiting to be processed to idle time between jobs or customers. Fig-
ures 7.3 and 7.4 show schematic diagrams of process layouts in services and manufacturing.
Material storage and movement are directly affected by the type of layout. Storage space in a
process layout is large to accommodate the large amount of in-process inventory. The factory may
• Virtual Tours
look like a warehouse, with work centers strewn between storage aisles. In-process inventory is
high because material moves from work center to work center in batches waiting to be processed.
Finished goods inventory, on the other hand, is low because the goods are being made for a partic-
ular customer and are shipped out to that customer on completion.
Process layouts in manufacturing firms require flexible material handling equipment (such as
forklifts, carts or AGVs) that can follow multiple paths, move in any direction, and carry large
loads of in-process goods. A forklift moving pallets of material from work center to work center

Figure 7.4
Milling
Lathe department department Drilling department A Process Layout
L L M M D D D D in Manufacturing

L L M M D D D D

L L G G G P

L L G G G P
Grinding Painting department
L L department
A A A
Receiving and
shipping Assembly
264 Part 1 • Operations Management

needs wide aisles to accommodate heavy loads and two-way movement. Scheduling of forklifts is
typically controlled by radio dispatch and varies from day to day and hour to hour. Routes have to
be determined and priorities given to different loads competing for pickup.
Process layouts in service firms require large aisles for customers to move back and forth and
ample display space to accommodate different customer preferences.
The major layout concern for a process layout is where to locate the departments or machine
centers in relation to each other. Although each job or customer potentially has a different route
through the facility, some paths will be more common than others. Past information on customer
orders and projections of customer orders can be used to develop patterns of flow through the shop.

PRODUCT LAYOUTS
Product layouts: Product layouts, better known as assembly lines, arrange activities in a line according to the se-
arrange activities in a line quence of operations that need to be performed to assemble a particular product. Each product has
according to the sequence of its own “line” specifically designed to meet its requirements. The flow of work is orderly and effi-
operations for a particular product cient, moving from one workstation to another down the assembly line until a finished product
or service. comes off the end of the line. Since the line is set up for one type of product or service, special
machines can be purchased to match a product’s specific processing requirements. Product lay-
outs are suitable for mass production or repetitive operations in which demand is stable and vol-
ume is high. The product or service is a standard one made for a general market, not for a
Process layouts are flexible; particular customer. Because of the high level of demand, product layouts are more automated
product layouts are efficient. than process layouts, and the role of the worker is different. Workers perform narrowly defined as-
sembly tasks that do not demand as high a wage rate as those of the more versatile workers in a
process layout.
The advantage of the product layout is its efficiency and ease of use. The disadvantage is its
inflexibility. Significant changes in product design may require that a new assembly line be built
and new equipment be purchased. This is what happened to U.S. automakers when demand
shifted to smaller cars. The factories that could efficiently produce six-cylinder engines could not
be adapted to produce four-cylinder engines. A similar inflexibility occurs when demand volume
slows. The fixed cost of a product layout (mostly for equipment) allocated over fewer units can
send the price of a product soaring.
The major concern in a product layout is balancing the assembly line so that no one worksta-
F
tion becomes a bottleneck and holds up the flow of work through the line. Figure 7.5 shows the
• Virtual Tours product flow in a product layout. Contrast this with the flow of products through the process lay-
out shown in Figure 7.4.

This photo shows a product

layout where car bodies are
moving down a paced
assembly line with workers
following along completing
their tasks. Notice the
workstations alongside the
assembly line with tools,
materials, signage,
instructions, and andon lights
(for signaling line slow down
or stoppage). Today's
factories are clean and
orderly; inspectors even wear
white gloves!

© Cultura Limited /SuperStock

 Chapter 7 • Capacity and Facilities Design 265

Figure 7.5
In
A Product Layout

Out

A product layout needs material moved in one direction along the assembly line and always
in the same pattern. Conveyors are the most common material handling equipment for product
layouts. Conveyors can be paced (automatically set to control the speed of work) or unpaced
(stopped and started by the workers according to their pace). Assembly work can be performed
online (i.e., on the conveyor) or offline (at a workstation serviced by the conveyor).
Aisles are narrow because material is moved only one way, it is not moved very far, and the con-
veyor is an integral part of the assembly process, usually with workstations on either side. Scheduling
of the conveyors, once they are installed, is simple—the only variable is how fast they should operate.
Storage space along an assembly line is quite small because in-process inventory is consumed
in the assembly of the product as it moves down the assembly line. Finished goods, however, may
require a separate warehouse for storage before they are shipped to dealers or stores to be sold.
Product and process layouts look different, use different material handling methods, and have dif-
ferent layout concerns. Table 7.1 summarizes the differences between product and process layouts.

Table 7.1
Product Layout Process Layout
A Comparison
1. Description Sequential arrangement of activities Functional grouping of activities
of Product and
2. Type of process Continuous, mass production, Intermittent, job shop, batch Process Layouts
mainly assembly production, mainly fabrication

3. Product Standardized, made to stock Varied, made to order

4. Demand Stable Fluctuating

5. Volume High Low

6. Equipment Special purpose General purpose

7. Workers Limited skills Varied skills

8. Inventory Low in-process, high finished goods High in-process, low finished goods

9. Storage space Small Large

10. Material handling Fixed path (conveyor) Variable path (forklift)

11. Aisles Narrow Wide

12. Scheduling Part of balancing Dynamic

13. Layout decision Line balancing Machine location

14. Goal Equalize work at each station Minimize

i i material
t handling cost

15. Advantage Efficiency Flexibility

266 Part 1 • Operations Management

Aircraft production generally

takes place in a fixed position
layout due to the size and
complexity of assembly.
Shown here is a Boeing 787
Dreamliner being outfitted.

Bloomberg/Getty Images, Inc.

FIXED-POSITION LAYOUTS
Fixed-position layouts: Fixed-position layouts are typical of projects in which the product produced is too fragile, bulky, or
are used for projects in which the heavy to move. Ships, houses, and aircraft are examples. In this layout, the product remains sta-
product cannot be moved. tionary for the entire manufacturing cycle. Equipment, workers, materials, and other resources are
brought to the production site. Equipment utilization is low because it is often less costly to leave
equipment idle at a location where it will be needed again in a few days, than to move it back and
forth. Frequently, the equipment is leased or subcontracted because it is used for limited periods
of time. The workers called to the work site are highly skilled at performing the special tasks they
are requested to do. For instance, pipefitters may be needed at one stage of production, and elec-
tricians or plumbers at another. The wage rate for these workers is much higher than minimum
wage. Thus, if we were to look at the cost breakdown for fixed-position layouts, the fixed cost
• Virtual Tours would be relatively low (equipment may not be owned by the company), whereas the variable
costs would be high (due to high labor rates and the cost of leasing and moving equipment).
Fixed-position layouts are specialized to individual projects and thus are beyond the scope of
this book. Projects are covered in more detail in the next chapter. In the sections that follow, we
examine some quantitative approaches for designing product and process layouts.

DESIGNING PROCESS LAYOUTS

Process layout objective: In designing a process layout, we want to minimize movement or material handling cost, which is
Minimize material handling a function of the amount of material moved times the distance it is moved. This implies that de-
costs. partments that incur the most interdepartment movement should be located closest to each other,
and those that do not interact should be located further away. Two techniques used to design
process layouts, block diagramming and relationship diagramming, are based on logic and the
visual representation of data.

BLOCK DIAGRAMMING
We begin with data on historical or predicted movement of material between departments in the
existing or proposed facility. This information is typically provided in the form of a from/to
 Chapter 7 • Capacity and Facilities Design 267

A L O N G T H E S U P P LY C H A I N

The Health Benefits of Good Layout

Steelcase furniture isn’t just for offices anymore. Nurture, their
line of patient-friendly furnishings, is part of an evidence-
based design movement in healthcare where the impact of the
physical environment on patient care and health is being inves-
tigated. Research shows that hospital design can cut infection
rates, lower physician error, improve staff performance,
shorten hospital stays, and save lives. The ideal patient room,
for example, is a private room with three zones: (1) the patient
zone, which includes the bed and overbed table; (2) the staff
zone, with a sink, sanitizer, and counter for writing; and (3) the
family zone, comfortable enough to encourage longer stays.
Access is key to all areas—caregiver access to the patient,
patient access to the bathroom, everyone’s access to vital Courtesy Nurture by Steelcase, Inc.
information. Rooms are designed as “acuity-adaptable,” mean-
ing they can accommodate a variety of medical conditions.
New rooms use more natural light, reduce noise, and improve care, those extra costs can be recouped within the first year
infection control. of operation.
A hospital room in which the patient has ownership of
his surroundings and feels connected to staff and loved
ones is an environment exceptionally conducive to healing. Sources: Andrew Blum, “How Hospital Design Saves Lives,”
BusinessWeek Online, August 15, 2006; Reena Jana, “Steelcase’s
The Center for Health Design estimates that such rooms Medical Breakthrough,” BusinessWeek, March 22, 2007; Chuck Salter,
can add $12 million to the cost of hospital construction, but “A Prescription for Innovation,” Fast Company, April 2006; Nurture
with reduced falls and transfers, fewer infections, and safer Web site, [Link]

chart, or load summary chart. The chart gives the average number of unit loads transported be- Unit load:
tween the departments over a given period of time. A unit load can be a single unit, a pallet of the quantity in which material
material, a bin of material, or a crate of material—however material is normally moved from is normally moved
location to location. In automobile manufacturing, a single car represents a unit load. For a ball-
bearing producer, a unit load might consist of a bin of 100 or 1000 ball bearings, depending on
their size.
The next step in designing the layout is to calculate the composite movements between
departments and rank them from most movement to least movement. Composite movement, rep-
resented by a two-headed arrow, refers to the back-and-forth movement between each pair of
departments.
Finally, trial layouts are placed on a grid that graphically represents the relative distances be- Block diagramming tries to
tween departments in the form of uniform blocks. The objective is to assign each department to a minimize nonadjacent loads.
block on the grid so that nonadjacent loads are minimized. The term nonadjacent is defined as a
distance farther than the next block, either horizontally, vertically, or diagonally. The trial layouts
are scored on the basis of the number of nonadjacent loads. Ideally, the optimal layout would have
zero nonadjacent loads. In practice, this is rarely possible, and the process of trying different lay-
out configurations to reduce the number of nonadjacent loads continues until an acceptable layout
is found.

Barko, Inc. makes bark scalpers, processing equipment that strips the bark off trees and turns Example 7.1
it into nuggets or mulch for gardens. The facility that makes bark scalpers is a small-job shop
Process Layout
that employs 50 workers and is arranged into five departments: (1) bar stock cutting, (2) sheet
metal, (3) machining, (4) painting, and (5) assembly. The average number of loads trans-
ported between the five departments per month is given in the accompanying load summary
(Continued )
268 Part 1 • Operations Management

chart. The current layout of the facility is shown schematically on the 2 ⫻ 3 grid. Notice that
there is quite a bit of flexibility in the facility, as indicated by the six possible locations (i.e.,
intersections) available for five departments. In addition, the forklift used in the facility is
very flexible, allowing horizontal, vertical, and diagonal movement of material.

Load Summary Chart

1 2 3
from/to Department
Department 1 2 3 4 5
4 5 1 — 100 50
2 — 200 50
3 60 — 40 50
4 100 — 60
5 50 —

Barko management anticipates that a new bark scalper plant will soon be necessary and
would like to know if a similar layout should be used or if a better layout can be designed.
You are asked to evaluate the current layout in terms of nonadjacent loads, and if needed, pro-
pose a new layout on a 2 ⫻ 3 grid that will minimize the number of nonadjacent loads.

Solution
In order to evaluate the current layout, we need to calculate the composite, or back-and-forth,
movements between departments. For example, the composite movement between depart-
ment 1 and department 3 is the sum of 50 loads moved from 1 to 3, plus 60 loads moved from
3 to 1, or 110 loads of material. If we continue to calculate composite movements and rank
them from highest to lowest, the following list results:
Composite Movements Composite Movements
2↔3 200 loads 3↔5 50 loads
2↔4 150 loads 2↔5 50 loads
1↔3 110 loads 3↔4 40 loads
1↔2 100 loads 1↔4 0 loads
4↔5 60 loads 1↔5 0 loads
Next, we evaluate the “goodness” of the layout by scoring it in terms of nonadjacent loads.
The results are shown visually in Grid 1.

110

100 200
1 2 3
Nonadjacent Loads
150 50 50 1↔ 3 110
3↔ 4 40
60 150
4 5
40
Grid 1

The adjacent moves are marked with a solid line and the nonadjacent moves are shown
with a curved dashed line to highlight the fact that material is moved farther than we would
like, that is, across more than one square. Following our composite movement list, 2 ↔ 3 and
2 ↔ 4 are adjacent moves, but 1 ↔ 3 is not. Our nonadjacent score starts with 110 loads of
material from 1 ↔ 3. Continuing down our list, all moves are adjacent and are marked with
solid lines until 3 ↔ 4. Movement 3 ↔ 4 is nonadjacent, so we designate it as such and add
 Chapter 7 • Capacity and Facilities Design 269

40 loads to our nonadjacent score. The remaining movements have zero loads. Thus, our
score for this layout is 110 ⫹ 40 ⫽ 150 nonadjacent loads.
To improve the layout, we note that departments 3 and 4 should be located adjacent to de-
partment 2, and that departments 4 and 5 may be located away from department 1 without
adding to the score of nonadjacent loads. Let’s put departments 4 and 5 on one end of the grid
and department 1 on the other and then fill in departments 2 and 3 in the middle. The revised
solution is shown in Grid 2. The only nonadjacent moves are between departments 1 and 4,
and 1 and 5. Since no loads of material are moved along those paths, the score for this layout
is zero.

100 150
1 2 4

50 40 60
110 200 Zero Nonadjacent Loads
50
3 5

Grid 2

The Excel setup for this problem is shown in Exhibit 7.1.

The layout solution in Grid 2 represents the relative position of each department. The next step
in the layout design is to add information about the space required for each department. Recom-
mendations for workspace around machines can be requested from equipment vendors or found in
safety regulations or operating manuals. In some cases, vendors provide templates of equipment
layouts, with work areas included. Workspace allocations for workers can be specified as part of
job design, recommended by professional groups, or agreed on through union negotiations. A
block diagram can be created by “blocking in” the work areas around the departments on the grid. Block diagram:
The final block diagram adjusts the block diagram for the desired or proposed shape of the build- a type of schematic layout diagram
ing. Standard building shapes include rectangles, L shapes, T shapes, and U shapes. that includes space requirements.
Figure 7.6a shows an initial block diagram for Example 7.1, and Figure 7.6b shows a final
block diagram. Notice that the space requirements vary considerably from department to depart-
ment, but the relative location of departments has been retained from the grid.

RELATIONSHIP DIAGRAMMING
The preceding solution procedure is appropriate for designing process layouts when quantitative
data are available. However, in situations for which quantitative data are difficult to obtain or do
not adequately address the layout problem, the load summary chart can be replaced with subjec-
tive input from analysts or managers. Richard Muther developed a format for displaying manager
preferences for departmental locations, known as Muther’s grid.2 The preference information is Muther’s grid:
coded into six categories associated with the five vowels, A, E, I, O, and U, plus the letter X. As a format for displaying manager
shown in Figure 7.7, the vowels match the first letter of the closeness rating for locating two de- preferences for department
partments next to each other. The diamond-shaped grid is read similarly to mileage charts on a locations.
road map. For example, reading down the highlighted row in Figure 7.7, it is okay if the offices
are located next to production, absolutely necessary that the stockroom be located next to produc-
tion, important that shipping and receiving be located next to production, especially important
that the locker room be located next to production, and absolutely necessary that the toolroom be Relationship diagram:
located next to production. a schematic diagram that uses
The information from Muther’s grid can be used to construct a relationship diagram that evalu- weighted lines to denote location
ates existing or proposed layouts. Consider the relationship diagram shown in Figure 7.8a. preference.

2
R. Muther, Systematic Layout Planning (Boston: Industrial Education Institute, 1961).
270 Part 1 • Operations Management

Input load summary

chart and trial layout

Try different layout

configurations
• Excel File

Excel will calculate

composite movements
and nonadjacent loads

Exhibit 7.1
A schematic diagram of the six departments from Figure 7.7 is given in a 2 ⫻ 3 grid. Lines of dif-
Using Excel for ferent thicknesses are drawn from department to department. The thickest lines (three, four, or five
Process Layouts strands) identify the closeness ratings with the highest priority—that is, for which departments it
is important, especially important, or absolutely necessary that they be located next to each other.
The priority diminishes with line thickness. Undesirable closeness ratings are marked with a
zigzagged line. Visually, the best solution would show short heavy lines and no zigzagged lines
(undesirable locations are noted only if they are adjacent). Thin lines (one or two strands, repre-
senting unimportant or okay) can be of any length and for that reason are sometimes eliminated
from the analysis. An alternative form of relationship diagramming uses colors instead of line
Manager preferences for thickness to visualize closeness ratings.
department locations are From Figure 7.8a, it is obvious that production and shipping and receiving are located too far
displayed as A, E, I, O, U, from the stockroom and that the offices and locker room are located too close to one another.
or X. Figure 7.8b shows a revised layout and evaluates the layout with a relationship diagram. The

Figure 7.6 (a) Initial block diagram (b) Final block diagram
Block Diagrams

1 4
1 2 4 2

3 5 3 5
 Chapter 7 • Capacity and Facilities Design 271

Key: A Absolutely necessary Figure 7.7

Production E Especially important
O I Important Muther’s Grid
Offices A O Okay
U I U Unimportant
X Undesirable
Stockroom O E
A X A
Shipping and
receiving U U
U O
Locker room O
O
Toolroom Figure 7.8
Relationship
Diagrams

Key: A
(a) Relationship diagram of original layout E
I
(b) Relationship diagram of revised layout O
U
Stockroom X

Offices Shipping
Offices Locker Shipping and
room and receiving
receiving

Toolroom Production Locker

Stockroom Toolroom Production room

revised layout appears to satisfy the preferences expressed in Muther’s grid. The heavy lines are
short and within the perimeter of the grid. The lengthy lines are thin, and there are no zigzagged
lines (X’s are shown only if the departments are adjacent).

COMPUTERIZED LAYOUT SOLUTIONS

The diagrams just discussed help formulate ideas for the arrangement of departments in a process
layout, but they can be cumbersome for large problems. Fortunately, several computer packages
are available for designing process layouts. The best known are CRAFT (Computerized Relative
Allocation of Facilities Technique) and CORELAP (Computerized Relationship Layout Plan-
ning). CRAFT takes a load summary chart and block diagram as input and then makes pairwise
exchanges of departments until no improvements in cost or nonadjacency score can be found. The
output is a revised block diagram after each iteration for a rectangular-shaped building, which
may or may not be optimal. CRAFT is sensitive to the initial block diagram used; that is, different
block diagrams as input will result in different layouts as outputs. For this reason, CRAFT is often
used to improve on existing layouts or to enhance the best manual attempts at designing a layout.
CORELAP uses nonquantitative input and relationship diagramming to produce a feasible
layout for up to 45 departments and different building shapes. It attempts to create an acceptable
layout from the beginning by locating department pairs with A ratings first, then those with E rat-
ings, and so on.
Simulation software for layout analysis, such as PROMODEL and EXTEND provide visual
feedback and allow the user to quickly test a variety of scenarios. Three-D modeling and CAD-
integrated layout analysis are available in VisFactory and similar software.
272 Part 1 • Operations Management

A L O N G T H E S U P P LY C H A I N

Urban Outfitters’ New Distribution Facility Carton Pallet

monorail staging
In recessionary times, most businesses revise their growth Receiving
Pack-to-light 1
strategies or change course. Not Urban Outfitters (UO). To modules 3 2

support their goal of adding 500 new stores in North America,

Europe, and Asia, UO decided to revamp their supply 4
chain, build their own distribution center, and take control
5
over logistics. Previously, a third party logistics (3PL) 6
provider had handled shipping, warehousing, and distribution. Shipping
To follow the logic of this decision, we’ll start with the effects
of the recession. Sorter

Lean times sometimes create unanticipated demand. Re-

ducing the stock on shelves, a concept known as lean buying,
can create a sense of urgency among customers so that they
purchase now instead of waiting for markdowns. Lean buy- 10% of the shipments into the center actually go into re-
ing also means smaller orders for suppliers and a supply serve storage for order fulfillment. Ninety percent are
chain that needs to be faster and more responsive. shipped directly to stores from inbound freight through a
One way to add flexibility to a supply chain is by dual process known as cross-docking. Referring to the figure
sourcing. UO sources fabric and raw materials in alternate above, shipments arriving in the receiving area are entered
locations, allowing for shorter lead times in the event of a into UO’s enterprise resource planning (ERP) system (see
reorder. The smaller initial order (to test the waters) is Chapter 15) where merchandise is matched with store needs.
sourced from one supplier, and the larger re-order is Pallets are staged while cartons for each store are prepared
sourced from another suppler. Every two weeks, the UO and ticketed. As cases of goods arrive to the pack-to-light
supply chain team sits down with other key executives to area, a packer scans the bar code label on a ticket in the lead
evaluate and discuss sales and operations planning (see case to launch the packing operation for that SKU. Lights
Chapter 14) and supply chain performance of its more than on the pick racks identify which cartons, or stores, will get
1500 vendors. that SKU and how many cases or items should be placed in
A critical supply chain goal is to reduce the concept-to- a carton. Once a shipping carton is full, it’s pushed back
market time from 18 weeks down to 9. (That’s still a far cry onto the conveyor system. On its way to the shipping area it
from Zara’s nine day design-to hanger time, but it’s a start.) is weighed and taped, then routed to the appropriate truck
To begin the process, UO re-evaluated its Far East opera- for shipping to a UO store, without ever having entered
tions, the source of its private brand products. The upstream storage.
portion of the supply chain flows from designer, to raw ma- In its first year of operation the new distribution center re-
terials merchant, to production planner, to production agent, duced operating costs per unit by 30% and turnaround time
to the factory. A bottleneck in the process has been the pro- by 40%. The facility has room to expand to 429,000 square
duction agent, usually someone from the country of origin feet as the expansion strategy takes effect. Urban Outfitters
who facilitates communication and oversees production in has taken a holistic approach to design, sourcing, production,
the factory. UO has worked to more closely train these and distribution. Integrating facility decisions with strategy is
agents and, in some cases, to replace them with UO person- an important step toward goal attainment.
nel. They are considering establishing a Hong Kong office to
coordinate Far East production and consolidate global logis- 1. What difference could in-house logistics versus 3PL
tics functions. make for a customer?
In the states, Urban Outfitters has built a 175,500- 2. Why does cross docking make sense for Urban
square-foot distribution center PC) in Reno, Nevada. Outfitters?
Although UO is based in Philadelphia, the West Coast DC 3. Do you think UO’s strategy of growth is sustainable?
location makes sense as most of the merchandise is im- What might be the next area for expansion?
ported from Asia. Taking over the logistics function from a
third party provider allowed UO to further shorten the con-
cept-to-market time. The DC uses a high-speed conveyor, Sources: Dan McCue, “Urban Outfitters Sales into the Wind,”
Inbound Logistics, September 2008; Bob Trebilcock, “Urban
sliding shoe sortation system, and pack-to-light technology. Outfitters’ Against-the-Grain Distribution is Back In-house,” and
The facility handles on average 100,000 packages a day, but “Distribution Redesign at Urban Outfitters,” Modern Materials
has shipped as many as 600,000 in a five-day week. Only Handling, April 1, 2008.
 Chapter 7 • Capacity and Facilities Design 273

DESIGNING SERVICE LAYOUTS

Most service organizations use process layouts. This makes sense because of the variability in Service layouts may have
customer requests for service. Service layouts are designed in much the same way as process different objectives than
layouts in manufacturing firms, but the objectives may differ. For example, instead of minimiz- manufacturing layouts.
ing the flow of materials through the system, services may seek to minimize the flow of paper-
work or to maximize customer exposure to as many goods as possible. Grocery stores take this
approach when they locate milk on one end of the store and bread on the other, forcing the cus-
tomer to travel through aisles of merchandise that might prompt additional purchases.
In addition to the location of departments, service layouts are concerned with the circulation
of customer traffic through the facility. There are a variety of ways to prompt the flow of cus-
tomers through various processes or departments. You may have experienced a free-flow layout in
The Disney Store, a grid layout in your grocery store, a spine layout in Barnes and Noble, or a cir-
cular layout in Kohl’s department store. These layouts are shown in Figure 7.9. Free flow layouts
encourage browsing, increase impulse purchasing, and are flexible and visually appealing. Grid
layouts encourage customer familiarity, are low cost, easy to clean and secure, and good for repeat
customers. Loop layouts and spine layouts fall between the extremes of free flow and grids. They

Service layouts must be

attractive as well as
functional. In this photo,
modular office units without
permanent walls allow
maximum flexibility, save
space, and encourage
communication.

Chuck Keeler/Allstock/Getty Images

Figure 7.9
Types of Store
Layouts

Freeflow Layout Grid Layout

• Internet
Spine Layout Loop Layout Exercises
274 Part 1 • Operations Management

both increase customer sightlines and exposure to products, while encouraging the customer to
circulate through the entire store.3
Service layouts are also concerned with the allocation of space to departments, the location
of special displays, the efficiency of checkout procedures, and protection from pilferage.
Space allocation is determined by evaluating the sales per square foot of a product or product
line versus the willingness of a vendor to pay for product placement. Queuing analysis, dis-
cussed in Chapter 5, is a quantitative technique for improving waiting lines that often form at
checkouts.
Industry-specific recommendations are available for layout and display decisions. Computer-
ized versions, such as SLIM (Store Labor and Inventory Management) and COSMOS (Comput-
erized Optimization and Simulation Modeling for Operating Supermarkets), consider shelf
space, demand rates, profitability, and stockout probabilities in layout design.
Finally, services may have both a back office (invisible to the customer) and a front office (in
full view of the customer) component. Back offices can be organized for efficiency and function-
ality, while front office layouts must be aesthetically pleasing as well as functional. For that
reason, service layouts are often considered part of the service design process.

DESIGNING PRODUCT LAYOUTS

A product layout arranges machines or workers in a line according to the operations that need to
be performed to assemble a particular product. From this description, it would seem the layout
could be determined simply by following the order of assembly as contained in the bill of material
for the product. To some extent, this is true. Precedence requirements, specifying which opera-
tions must precede others, which can be done concurrently and which must wait until later, are an
important input to the product layout decision. But there are other factors that make the decision
more complicated.
Product layout objective: Product layouts or assembly lines are used for high-volume production. To attain the required
Balance the assembly line. output rate as efficiently as possible, jobs are broken down into their smallest indivisible portions,
called work elements. Work elements are so small that they cannot be performed by more than one
worker or at more than one workstation. But it is common for one worker to perform several work
elements as the product passes through his or her workstation. Part of the layout decision is con-
cerned with grouping these work elements into workstations so products flow through the assem-
bly line smoothly. A workstation is any area along the assembly line that requires at least one
worker or one machine. If each workstation on the assembly line takes the same amount of time to
Line balancing: perform the work elements that have been assigned, then products will move successively from
tries to equalize the amount of workstation to workstation with no need for a product to wait or a worker to be idle. The process
work at each workstation. of equalizing the amount of work at each workstation is called line balancing.

LINE BALANCING
Assembly-line balancing operates under two constraints: precedence requirements and cycle time
restrictions.
Precedence requirements: Precedence requirements are physical restrictions on the order in which operations are per-
physical restrictions on the order in formed on the assembly line. For example, we would not ask a worker to package a product be-
which operations are performed. fore all the components were attached, even if he or she had the time to do so before passing the
product to the next worker on the line. To facilitate line balancing, precedence requirements are
often expressed in the form of a precedence diagram. The precedence diagram is a network,
with work elements represented by circles or nodes and precedence relationships represented
Cycle time: by directed line segments connecting the nodes. We will construct a precedence diagram later in
the maximum amount of time a Example 7.2.
product is allowed to spend at Cycle time, the other restriction on line balancing, refers to the maximum amount of time the
each workstation. product is allowed to spend at each workstation if the targeted production rate is to be reached.

3
The material in this section is adapted from Patrick Dunne, Robert Lusch, and David Griffith, Retailing, 4th ed.
(Southwestern College Publishing, 2001).
 Chapter 7 • Capacity and Facilities Design 275

Desired cycle time is calculated by dividing the time available for production by the number of
units scheduled to be produced:

production time available

Cd =
desired units of output

Suppose a company wanted to produce 120 units in an 8-hour day. The cycle time necessary
to achieve the production quota is

18 hours * 60 minutes/hour2
Cd =
1120 units2
480
= = 4 minutes
120

Cycle time can also be viewed as the time between completed items rolling off the assembly
line. Consider the three-station assembly line shown here.

1 2 3
4 minutes 4 minutes 4 minutes Cycle time is different from
flow time.
Flow time = 4 + 4 + 4 = 12 minutes
Cycle time = max {4, 4, 4} = 4 minutes

It takes 12 minutes (i.e., 4 ⫹ 4 ⫹ 4) for each item to pass completely through all three stations
of the assembly line. The time required to complete an item is referred to as its flow time. How-
ever, the assembly line does not work on only one item at a time. When fully operational, the line
will be processing three items at a time, one at each workstation, in various stages of assembly.
Every 4 minutes a new item enters the line at workstation 1, an item is passed from workstation 1
to workstation 2, another item is passed from workstation 2 to workstation 3, and a completed
item leaves the assembly line. Thus, a completed item rolls off the assembly line every 4 minutes.
This 4-minute interval is the actual cycle time of the line.
The actual cycle time, Ca, is the maximum workstation time on the line. It differs from the de- Actual cycle time is the
sired cycle time when the production quota does not match the maximum output attainable by the result from the balancing
system. Sometimes the production quota cannot be achieved because the time required for one procedure.
work element is too large. To correct the situation, the quota can be revised downward or parallel
stations can be set up for the bottleneck element.
Line balancing is basically a trial-and-error process. We group elements into workstations rec-
ognizing time and precedence constraints. For simple problems, we can evaluate all feasible
groupings of elements. For more complicated problems, we need to know when to stop trying dif- Calculate line efficiency
ferent workstation configurations. The efficiency of the line can provide one type of guideline; the and the theoretical minimum
theoretical minimum number of workstations provides another. The formulas for efficiency, E, and number of workstations.
minimum number of workstations, N, are

j j
a ti a ti
i=1 i=1
E = ; N =
nCa Cd

where
ti = completion time for element i
j = number of work elements
n = actual number of workstations
Ca = actual cycle time
Cd = desired cycle time
276 Part 1 • Operations Management

Balance delay: The total idle time of the line, called balance delay, is calculated as (1 ⫺ efficiency). Efficiency and
the total idle time of the line. balance delay are usually expressed as percentages. In practice, it may be difficult to attain the
theoretical number of workstations or 100% efficiency.
The line balancing process can be summarized as follows:

Line balancing groups 1. Draw and label a precedence diagram.

elements into workstations. 2. Calculate the desired cycle time required for the line.
3. Calculate the theoretical minimum number of workstations.
4. Group elements into workstations, recognizing cycle time and precedence constraints.
5. Calculate the efficiency of the line.
6. Determine if the theoretical minimum number of workstations or an acceptable efficiency
level has been reached. If not, go back to step 4.

Example 7.2 Real Fruit Snack Strips are made from a mixture of dried fruit, food coloring, preservatives,
and glucose. The mixture is pressed out into a thin sheet, imprinted with various shapes,
Line Balancing
rolled, and packaged. The precedence and time requirements for each step in the assembly
process are given below. To meet demand, Real Fruit needs to produce 6000 fruit strips every
40-hour week. Design an assembly line with the fewest number of workstations that will
achieve the production quota without violating precedence constraints.

Work Element Precedence Time (min)

A Press out sheet of fruit — 0.1
B Cut into strips A 0.2
C Outline fun shapes A 0.4
D Roll up and package B, C 0.3

Solution
First, we draw the precedence diagram as follows.

B B B

A A A D

C C
A precedes B. A precedes C. B and C precede D.

The precedence diagram is completed by adding the time requirements beside each node. Next,
we calculate the desired cycle time and the theoretical minimum number of workstations:

40 hours * 60 minutes/hour 2400

Cd = = = 0.4 minutes
6000 units 6000
0.1 + 0.2 + 0.3 + 0.4 1.0
N = = = 2.5 L 3 workstations 1round up2
0.4 0.4
 Chapter 7 • Capacity and Facilities Design 277

0.2
B

A D 0.3
0.1

C 0.4

To balance the line, we must group elements into workstations so that the sum of the element
times at each workstation is less than or equal to the desired cycle time of 0.4 minute. Examining
the precedence diagram, we begin with A since it is the only element that does not have a prece-
dence. We assign A to workstation 1. B and C are now available for assignment. Cycle time is
exceeded with A and C in the same workstation, so we assign B to workstation 1 and place C in a
second workstation. No other element can be added to workstation 2, due to cycle time con-
straints. That leaves D for assignment to a third workstation. Elements grouped into workstations
are circled on the precedence diagram and placed into workstations shown on the assembly line
diagram.

Remaining Remaining
Workstation Element Time Elements
1 A 0.3 B, C
B 0.1 C, D
2 C 0.0 D
3 D 0.1 none

0.2
B

A D 0.3
0.1

C 0.4

Assembly-line diagram:

Work- Work- Work-

station 1 station 2 station 3

A,B C D
0.3 minute 0.4 minute 0.3 minute

Since the theoretical minimum number of workstations was three, we know we have balanced
the line as efficiently as possible. The assembly line has an efficiency of

0.1 + 0.2 + 0.3 + 0.4 1.0

E = = = 0.833 = 83.3%
3(0.4) 1.2
278 Part 1 • Operations Management

COMPUTERIZED LINE BALANCING

Line-balancing heuristics Line balancing by hand becomes unwieldy as the problems grow in size. Fortunately, there are
specify the order in which software packages that will balance large lines quickly. IBM’s COMSOAL (Computer Method for
work elements are allocated Sequencing Operations for Assembly Lines) and GE’s ASYBL (Assembly Line Configuration
to workstations. Program) can assign hundreds of work elements to workstations on an assembly line. These pro-
grams, and most that are commercially available, do not guarantee optimal solutions. They use
various heuristics, or rules, to balance the line at an acceptable level of efficiency. Five common
heuristics are: longest operation time, shortest operation time, most number of following tasks,
least number of following tasks, and ranked positional weight. Positional weights are calculated
by summing the processing times of those tasks that follow an element. These heuristics specify
the order in which work elements are considered for allocation to workstations. Elements are as-
signed to workstations in the order given until the cycle time is reached or until all tasks have
been assigned. The most number of following tasks heuristic was used in Example 7.2.

HYBRID LAYOUTS
Hybrid layouts modify and/or combine some aspects of product and process layouts. We discuss three
• Internet hybrid layouts: cellular layouts, flexible manufacturing systems, and mixed-model assembly lines.

Exercises
CELLULAR LAYOUTS
Cellular layouts attempt to combine the flexibility of a process layout with the efficiency of a prod-
uct layout. Based on the concept of group technology (GT), dissimilar machines or activities are
Cellular layouts: grouped into work centers, called cells, to process families of parts or customers with similar re-
group dissimilar machines into quirements. (Figure 7.10 shows a family of parts with similar shapes, and a family of related gro-
work centers (called cells) that cery items.) The cells are arranged in relation to each other so that material movement is
process families of parts with minimized. Large machines that cannot be split among cells are located near to the cells that use
similar shapes or processing them, that is, at their point of use.
requirements. The layout of machines within each cell resembles a small assembly line. Thus, line-balancing
procedures, with some adjustment, can be used to arrange the machines within the cell. The layout
between cells is a process layout. Therefore, computer programs such as CRAFT can be used to
locate cells and any leftover equipment in the facility.
Production flow analysis: Consider the process layout in Figure 7.11. Machines are grouped by function into four distinct
reorders part routing matrices to departments. Component parts manufactured in the process layout section of the factory are later
identify families of parts with assembled into a finished product on the assembly line. The parts follow different flow paths
similar processing requirements. through the shop. Three representative routings, for parts A, B, and C, are shown in the figure. No-
tice the distance that each part must travel before completion and the irregularity of the part rout-
ings. A considerable amount of “paperwork” is needed to direct the flow of each individual part and
to confirm that the right operation has been performed. Workers are skilled at operating the types of
machines within a single department and typically can operate more than one machine at a time.

Figure 7.10
Group Technology
(a) A family of
similar parts.
(b) A family of
related grocery
items.

Source: Adapted from Mikell P.

Groover, Automation, Production
Systems, and Computer
Integrated Manufacturing © 1987. (a) (b)
Adapted by permission of Pearson
Education, Inc.,
Upper Saddle River, NJ.
 Chapter 7 • Capacity and Facilities Design 279

Assembly Machines
Parts 1 2 3 4 5 6 7 8 9 10 11 12
4 6 7 9 A
B
5 8 C
D
2 10 12 E
F
1 3 11 G
H
A B C
Raw materials

Figure 7.11
Figure 7.11 gives the complete part routing matrix for the eight parts processed through the fa-
cility. In its current form, there is no apparent pattern to the routings. Production flow analysis (PFA) is
Original Process
a group technology technique that reorders part routing matrices to identify families of parts with
Layout with
similar processing requirements. The reordering process can be as simple as using the “Data Sort”
Routing Matrix
command in Excel for the most common machines, or as sophisticated as pattern-recognition al-
gorithms from the field of artificial intelligence. Figure 7.12 shows the results of reordering. Now
the part families and cell formations are clear. Cell 1, consisting of machines 1, 2, 4, 8, and 10,
will process parts A, D, and F; Cell 2, consisting of machines 3, 6, and 9, will process products C
and G; and Cell 3, consisting of machines 5, 7, 11, and 12, will process parts B, H, and E. A com-
plete cellular layout showing the three cells feeding a final assembly line is also given in Figure
7.12. The representative part flows for parts A, B, and C are much more direct than those in the
process layout. There is no backtracking or crisscrossing of routes, and the parts travel a shorter
distance to be processed. Notice that parts G and E cannot be completely processed within cells 2
and 3, to which they have been assigned. However, the two cells are located in such a fashion that
the transfer of parts between the cells does not involve much extra movement.
The U shape of cells 1 and 3 is a popular arrangement for manufacturing cells because it facil-
itates the rotation of workers among several machines. Workers in a cellular layout typically oper- Figure 7.12
ate more than one machine, as was true of the process layout. However, workers who are assigned
Revised Cellular
to each cell must now be multifunctional—that is, skilled at operating many different kinds of ma-
Layout with
chines, not just one type, as in the process layout. In addition, workers are assigned a path to fol-
Reordered
low among the machines that they operate, which may or may not coincide with the path the
Routing Matrix

Machines
Parts 1 2 4 8 10 3 6 9 5 7 11 12
Assembly A
D
8 10 9 12 F
C
11 G
4 Cell 1 Cell 2 6 Cell 3 B
7 H
E
2 1 3 5
Cell 1: Parts A, D, F
Machines 1, 2, 4, 8, 10
A C B
Cell 2: Parts C, G
Raw materials
Machines 3, 6, 9
Cell 3: Parts B, H, E
Machines 5, 7, 11, 12
280 Part 1 • Operations Management

Figure 7.13 Direction of part movement within cell

A Manufacturing
VM
Cell with Worker HM
Paths VM

Source: J.T. Black, “Cellular L

Manufacturing Systems Reduce
Setup Time, Make Small Lot Worker 3
Production Economical.” Industrial
Engineering (November 1983).
Reprinted with the permission of
the Institute of Industrial
G
Engineers, 3577 Parkway Lane,
Suite 200, Norcross, GA 30092, L Worker 2
770-449-0461 © 1983.

Final
inspection

Finished
S part
Worker 1
Out
In
Key:
S = Saw
L = Lathe Paths of three workers moving
HM = Horizontal milling machine within cell
VM = Vertical milling machine Material movement
G = Grinder

product follows through the cell. Figure 7.13 shows a U-shaped manufacturing cell including
worker paths.

Advantages of Cellular Layouts

Cellular layouts have become popular in the past decade as the backbone of modern factories.
Cells can differ considerably in size, in automation, and in the variety of parts processed. As small
• Virtual Tours
interconnected layout units, cells are common in services, as well as manufacturing.
A L O N G T H E S U P P LY C H A I N
The advantages of cellular layouts are as follows:
Cellular layouts reduce • Reduced material handling and transit time. Material movement is more direct. Less
transit time, setup time, and distance is traveled between operations. Material does not accumulate or wait long periods
in-process inventory. of time to be moved. Within a cell, the worker is more likely to carry a partially finished
item from machine to machine than wait for material-handling equipment, as is characteristic
of process layouts where larger loads must be moved farther distances.
• Reduced setup time. Since similar parts are processed together, the adjustments required to
set up a machine should not be that different from item to item. If it does not take that long to
change over from one item to another, then the changeover can occur more frequently, and
items can be produced and transferred in very small batches or lot sizes.
• Reduced work-in-process inventory. In a work cell, as with assembly lines, the flow of work
is balanced so that no bottleneck or significant buildup of material occurs between stations or
machines. Less space is required for storage of in-process inventory between machines, and ma-
chines can be moved closer together, thereby saving transit time and increasing communication.
• Better use of human resources. Typically, a cell contains a small number of workers respon-
sible for producing a completed part or product. The workers act as a self-managed team, in
most cases more satisfied with the work that they do and more particular about the quality of
their work. Labor in cellular manufacturing is a flexible resource. Workers in each cell are
multifunctional and can be assigned to different routes within a cell or between cells as
demand volume changes.
 Chapter 7 • Capacity and Facilities Design 281

• Easier to control. Items in the same part family are processed in a similar manner through the
work cell. There is a significant reduction in the paperwork necessary to document material
travel, such as where an item should be routed next, if the right operation has been performed,
and the current status of a job. With fewer jobs processed through a cell, smaller batch sizes,
and less distance to travel between operations, the progress of a job can be verified visually
rather than by mounds of paperwork.
• Easier to automate. Automation is expensive. Rarely can a company afford to automate an
entire factory all at once. Cellular layouts can be automated one cell at a time. Figure 7.14
shows an automated cell with one robot in the center to load and unload material from several
CNC machines and an incoming and outgoing conveyor. Automating a few workstations on
an assembly line will make it difficult to balance the line and achieve the increases in produc-
tivity expected. Introducing automated equipment in a job shop has similar results, because
the “islands of automation” speed up only certain processes and are not integrated into the
complete processing of a part or product.

Disadvantages of Cellular Layouts

In spite of their many advantages, cellular layouts are not appropriate for all types of businesses.
The following disadvantages of cellular layouts must be considered:
• Inadequate part families. There must be enough similarity in the types of items processed to Cellular layouts require
form distinct part families. Cellular manufacturing is appropriate for medium levels of prod- distinct part families, careful
uct variety and volume. The formation of part families and the allocation of machines to cells balancing, expanded worker
is not always an easy task. Part families identified for design purposes may not be appropriate training, and increased
for manufacturing purposes. capital investment.

Figure 7.14
An Automated
Finished-part Minicomputer Manufacturing
conveyor Cell

Source: J. T. Black, “Cellular

processor

Manufacturing Systems Reduce

Micro-

Micro- Setup Time, Make Small Lot

processor Production Economical.” Industrial

CNC Engineering (November 1983).

turning Reprinted with the permission of
Micro
proc

center the Institute of Industrial

CNC grinder Engineers, 3577 Parkway Lane,
Suite 200, Norcross, GA 30092,
Robot 770-449-0461, © 1983.

CNC
milling
center

Micro-
processor Tool changer
computer
conveyor
Raw-part
282 Part 1 • Operations Management

• Poorly balanced cells. Balancing the flow of work through a cell is more difficult than assembly-
line balancing because items may follow different sequences through the cell that require
different machines or processing times. The sequence in which parts are processed can thus
affect the length of time a worker spends at a certain stage of processing and thus delay his ar-
rival to a subsequent stage in his worker path. Poorly balanced cells can be very inefficient. It
is also important to balance the workload among cells in the system, so that one cell is not
overloaded while others are idle. This may be taken care of in the initial cellular layout, only
to become a problem as changes occur in product designs or product mix. Severe imbalances
may require the reformation of cells around different part families, and the cost and disruption
that implies.
• Expanded training and scheduling of workers. Training workers to do different tasks is ex-
pensive and time-consuming and requires the workers’ cooperation. Some tasks are too differ-
ent for certain workers to master. Although flexibility in worker assignment is one of the
advantages of cellular layouts, the task of determining and adjusting worker paths within or
between cells can be quite complex.
• Increased capital investment. In cellular manufacturing, multiple smaller machines are
preferable to single large machines. Implementing a cellular layout can be economical if new
machines are being purchased for a new facility, but it can be quite expensive and disruptive
in existing production facilities where new layouts are required. Existing equipment may be
too large to fit into cells or may be underutilized when placed in a single cell. Additional ma-
chines of the same type may have to be purchased for different cells. The cost and downtime
required to move machines can also be high.

FLEXIBLE MANUFACTURING SYSTEMS

Flexible manufacturing A flexible manufacturing system (FMS) consists of numerous programmable machine tools connected
system: by an automated material handling system and controlled by a common computer network. It is
can produce an enormous variety different from traditional automation, which is fixed or “hard wired” for a specific task. Fixed au-
of items. tomation is very efficient and can produce in very high volumes, but is not flexible. Only one type
or model of product can be produced on most automated production lines, and a change in prod-
uct design would require extensive changes in the line and its equipment.
An FMS combines flexibility with efficiency. Tools change automatically from large storage
carousels at each machine, which hold hundreds of tools. The material-handling system (usually
conveyors or automated guided vehicles) carries workpieces on pallets, which can be locked into
a machine for processing. Pallets are transferred between the conveyor and machine automati-
cally. Computer software keeps track of the routing and processing requirements for each pallet.
Pallets communicate with the computer controller by way of bar codes or radio signals. Parts can
be transferred between any two machines in any routing sequence. With a variety of programma-
ble machine tools and large tool banks, an FMS can theoretically produce thousands of different
items as efficiently as a thousand of the same item.
The efficiency of an FMS is derived from reductions in setup and queue times. Setup activities
take place before the part reaches the machine. A machine is presented only with parts and tools
ready for immediate processing. Queuing areas at each machine hold pallets ready to move in the
moment the machine finishes with the previous piece. The pallet also serves as a work platform,
so no time is lost transferring the workpiece from pallet to machine or positioning and fixturing
the part. The machines in an advanced FMS, such as five-axis CNC machining centers, simultane-
ously perform up to five operations on a workpiece that would normally require a series of opera-
tions on individual machines.
FMS layouts differ based on the variety of parts that the system can process, the size of the
parts processed, and the average processing time required for part completion. Figure 7.15 shows
a simple FMS where parts rotate on a conveyor until a machine is available for processing.

MIXED-MODEL ASSEMBLY LINES

Traditional assembly lines, designed to process a single model or type of product, can be used to
process more than one type of product but not efficiently. Models of the same type are produced
in long production runs, sometimes lasting for months, and then the line is shut down and changed
over for the next model. The next model is also run for an extended time, producing perhaps half a
 Chapter 7 • Capacity and Facilities Design 283

CNC
Machine
Finished
goods

Unload
Conveyor
Computer
control
room

Load

Pallet

Parts
CNC
Machine
Automatic
tool changer

Figure 7.15
year to a year’s supply; then the line is shut down again and changed over for yet another model;
and so on. The problem with this arrangement is the difficulty in responding to changes in cus- A Flexible
tomer demand. If a certain model is selling well and customers want more of it, they have to wait Manufacturing
until the next batch of that model is scheduled to be produced. On the other hand, if demand is System
disappointing for models that have already been produced, the manufacturer is stuck with un-
wanted inventory.
Recognizing that this mismatch of production and demand is a problem, some manufacturers
concentrated on devising more sophisticated forecasting techniques. Others changed the manner in
which the assembly line was laid out and operated so that it really became a mixed-model assembly Mixed-model assembly line:
line. First, they reduced the time needed to change over the line to produce different models. Then processes more than one product
they trained their workers to perform a variety of tasks and allowed them to work at more than one model.
workstation on the line, as needed. Finally, they changed the way in which the line was arranged
and scheduled. The following factors are important in the design and operation of mixed-model
assembly lines.
• Line balancing. In a mixed-model line, the time to complete a task can vary from model to
model. Instead of using the completion times from one model to balance the line, a distribu-
tion of possible completion times from the array of models must be considered. In most cases, Single-model and mixed-
the expected value, or average, times are used in the balancing procedure. Otherwise, mixed- model assembly lines differ in
model lines are balanced in much the same way as single-model lines. layout and operation.
• U-shaped lines. To compensate for the different work requirements of assembling different
models, it is necessary to have a flexible workforce and to arrange the line so that workers can
assist one another as needed. Figure 7.16 shows how the efficiency of an assembly line can be
improved when a U-shaped line is used.
• Flexible workforce. Although worker paths are predetermined to fit within a set cycle time,
the use of average time values in mixed-model lines will produce variations in worker
performance. Hence, the flexibility of workers helping other workers makes a tremendous
difference in the ability of the line to adapt to the varied length of tasks inherent in a mixed-
model line.
• Model sequencing. Since different models are produced on the same line, mixed-model
scheduling involves an additional decision—the order, or sequence, of models to be run
through the line. From a logical standpoint, it would be unwise to sequence two models back
284 Part 1 • Operations Management

Figure 7.16 Precedence diagram:

4 5 2
Balancing
A B C
U-Shaped Lines

Cycle time = 12 min

D E
10 3

(a) Balanced for a straight line (b) Balanced for a U-shaped line

A,B C,D E
A,B
9 min 12 min 3 min

24 = 24
Efficiency = –––– –– = 0.6666 = 66.7%
3(12) 36 C,D

12 min 12 min
24 = 24
Efficiency = –––– –– = 100%
2(12) 24

to back that require extra long processing times. It would make more sense to mix the assem-
bling of models so that a short model (requiring less than the average time) followed a long
one (requiring more than the average time). With this pattern, workers could “catch up” from
one model to the next.
Another objective in model sequencing is to spread out the production of different models
as evenly as possible throughout the time period scheduled. This concept of uniform produc-
tion will be discussed in Chapter 16, “Lean Production.”

• Practice
SUMMARY Quizzes

Capacity planning is the process of establishing the overall level projects tend to use fixed-position layouts. Service layouts may
of productive resources for a firm. It involves long-term strategic try to process customers through the system as quickly as possi-
activities, such as the acquisition of new facilities, technologies, ble or maximize customer exposure to products and services.
or businesses, that take a year or more to complete. In the current manufacturing environment of new product
Capacity expansion can lead demand, lag behind demand, introductions, rapidly changing technologies, and intense com-
or meet average demand. The best operating level for a facil- petition, the ability of a manufacturing system to adapt is essen-
ity often includes a capacity cushion for unexpected occur- tial. Thus, several hybrid layouts have emerged that combine
rences. The tendency of high levels of output to cost less per flexibility and efficiency. Reductions in setup times have made
unit is known as economies of scale. This normally holds true mixed-model assembly lines feasible. The newest flexible manu-
up to a certain level of output, at which point diseconomies of facturing systems (FMSs) can process any item that fits the
scale can take over. dimensions of the pallet on which it is transported. Manufactur-
Facility decisions are an important part of operations strat- ing cells that resemble small assembly lines are designed to
egy. An effective layout reflects a firm’s competitive priorities process families of items. Some companies are placing wheels
and enables the firm to reach its strategic objectives. Batch pro- and casters on their machines so that the cells can be adjusted as
duction, which emphasizes flexibility, is most often organized needed. Others are experimenting with modular conveyor sys-
into a process layout, whereas mass production uses a product tems that allow assembly lines to be rearranged while workers
layout for maximum efficiency. Because of their size and scope, are on their lunch break.
 Chapter 7 • Capacity and Facilities Design 285

As important as flexibility is, the cost of moving material is are located closer together to allow the frequent movement of
still a primary consideration in layout design. Today, as in the smaller loads. Planners who used to devote a considerable
past, layout decisions are concerned with minimizing material amount of time to designing the location of storage areas and
flow. However, with reduced inventory levels, the emphasis has the movement of material into and out of storage areas are now
shifted from minimizing the number of loads moved to mini- concerned with the rapid movement of material to and from
mizing the distance they are moved. Instead of accumulating the facility itself. The logistics of material transportation is
larger loads of material and moving them less often, machines discussed in Chapter 10, “Supply Chain Management.”

SUMMARY OF KEY FORMULAS

Desired Cycle Time Efficiency

j
production time available
Cd = a ti
desired units of output i=1
E =
nCa
Actual Cycle Time

Ca = maximum workstation time Balance Delay

1 - efficiency
Theoretical Minimum Number of Workstations
j
a ti
i=1
N =
Cd

SUMMARY OF KEY TERMS

balance delay the total idle time of an assembly line. flexible manufacturing system (FMS) programmable equipment
best operating level the percent of capacity utilization at which connected by an automated material-handling system and
unit costs are lowest. controlled by a central computer.
block diagram a schematic layout diagram that includes the size line balancing a layout technique that attempts to equalize the
of each work area. amount of work assigned to each workstation on an assem-
capacity the maximum capability to produce. bly line.
capacity cushion a percent of capacity held in reserve for unex- mixed-model assembly line an assembly line that processes more
pected occurrences. than one product model.
capacity planning a long-term strategic decision that establishes Muther’s grid a format for displaying manager preferences for
the overall level of productive resources for a firm. department locations.
cellular layout a layout that creates individual cells to process precedence requirements physical restrictions on the order in
parts or customers with similar requirements. which operations are performed.
cycle time the maximum amount of time an item is allowed to process layout a layout that groups similar activities together
spend at each workstation if the targeted production rate is into work centers according to the process or function they
to be achieved; also, the time between successive product perform.
completions. product layout a layout that arranges activities in a line accord-
diseconomies of scale when higher levels of output cost more ing to the sequence of operations that are needed to assem-
per unit to produce. ble a particular product.
economies of scale when it costs less per unit to produce higher production flow analysis (PFA) a group technology technique that
levels of output. reorders part routing matrices to identify families of parts
facility layout the arrangement of machines, departments, work- with similar processing requirements.
stations, and other areas within a facility. relationship diagram a schematic diagram that denotes location
fixed-position layout a layout in which the product remains at a preference with different line thicknesses.
stationary site for the entire manufacturing cycle. unit load the quantity in which material is normally moved,
such as a unit at a time, a pallet, or a bin of material.
286 Part 1 • Operations Management

• Animated Demo Problem

SOLVED PROBLEMS

1. PROCESS LAYOUT b.
Mohawk Valley Furniture Warehouse has purchased a retail outlet
with six departments, as shown below. The anticipated number of
70 70
customers that move between the departments each week is given A B C
in the load summary chart. 60
a. Calculate the nonadjacent loads for the layout shown 50 100 80
below. 40
F E D
b. Revise Mohawk’s layout such that nonadjacent loads 130
are minimized.
Zero nonadjacent loads

A B C
2. PRODUCT LAYOUT
The Basic Block Company needs to produce 4000 boxes of
D E F blocks per 40-hour week to meet upcoming holiday demand. The
process of making blocks can be broken down into six work ele-
ments. The precedence and time requirements for each element
are as follows. Draw and label a precedence diagram for the pro-
duction process. Set up a balanced assembly line and calculate
DEPARTMENT A B C D E F the efficiency of the line.
A — 70 50
B — 100
C 70 — WORK PERFORMANCE
D 80 — ELEMENT PRECEDENCE TIME (MIN)
E 40 — 30 A — 0.10
F 60 100 — B A 0.40
C A 0.50
D — 0.20
SOLUTION E C, D 0.60
Composite movements ranked from highest to lowest are as follows: F B, E 0.40
E↔F 130 B↔C 70
B↔E 100 B↔F 60
C↔D 80 A↔F 50 SOLUTION
A↔B 70 A↔E 40

a.
0.1
A B 0.4
70 70
A B C
D 0.4
0.2
40 100 60 F

130 0.5
D E F
C E
0.6

80
50 Start at the beginning of the network and group
elements into workstations until cycle time has been
130 Nonadjacent loads reached. Do not violate precedence requirements.
 Chapter 7 • Capacity and Facilities Design 287

time 40 * 60 2400 0.60 + 0.60 + 0.60 + 0.40

Cd = = = = 0.60 at
units 4000 4000 Efficiency = =
nCa 4(0.60)
2.2
= = 91.67%
Work- Work- Work- Work- 2.4
station 1 station 2 station 3 station 4

A, C B, D E F
0.6 minute 0.6 minute 0.6 minute 0.4 minute

• Internet
Exercises
QUESTIONS

7-1. Why is capacity planning strategically important? 7-12. What are the fixed and variable cost tradeoffs among prod-
7-2. Describe three strategies for expanding capacity. What are uct, process, and fixed-position layouts? Draw a cost/
the advantages and disadvantages of incremental versus volume graph to illustrate your answer.
one-step expansion? 7-13. What is the difference between block diagramming and
7-3. Explain economies and diseconomies of scale. Give an ex- relationship diagramming? When might each be used?
ample of each. 7-14. How do service layouts differ from manufacturing layouts?
7-4. Explore capacity planning at your university or place of Give an example of a well-designed service layout and an
business. How is capacity measured? What factors influ- example of a poorly designed layout.
ence the acquisition and allocation of resources? 7-15. What are the objectives of line balancing? Describe several
7-5. Look around your classroom. Which layout characteristics heuristic approaches to line balancing.
help the learning process, and which ones hinder it? How 7-16. How are manufacturing cells formed? How does the role of
does layout affect the manner in which the class is taught? the worker differ in cellular manufacturing?
7-6. Visit a local McDonald’s, Burger King, and Taco Bell (or 7-17. Discuss the advantages and disadvantages of cellular lay-
similar establishments). How do their layouts differ? outs. How does a cellular layout combine a product and
Which appears to be most efficient? Why? process layout?
7-7. Does layout make a difference? Think of a time when the 7-18. Describe a flexible manufacturing system. How does it
layout of a facility impeded a process with which you were differ from a cellular layout?
involved. Think of a time when a layout made it easier for 7-19. How do mixed-model assembly lines differ from tradi-
a process to be completed. tional assembly lines? What additional decisions are
7-8. List five goals of facility layout. Give an example of a fa- required?
cility you know that emphasizes each goal. 7-20. Look for layout software packages on the Internet. What
7-9. Distinguish between a process and product layout. Give an do systems like VisFactory do? Can you find any of the
example of each. layout approaches discussed in the text?
7-10. Give an example of a fixed-position layout for producing a 7-21. Find a virtual plant tour on the Internet and describe the
product and providing a service. production system according to the criteria in Table 7.1.
7-11. What type of layout(s) would be appropriate for: 7-22. Even better than virtual tours are actual tours. Take a tour
a. A grocery store? of two production or distribution facilities in your area.
b. Home construction? Look for the basic and hybrid layouts discussed in this
c. Electronics assembly? chapter. Also, look for bottlenecks and smooth flow. Write
d. A university? a paper comparing the two layouts.

• GO Tutorial
PROBLEMS

7-1. Maureen Marcy is designing the layout for a new business movement between spa activities. Help Maureen deter-
in town, The Collegiate Spa. From visiting spas in neigh- mine where to locate each activity on a 2 ⫻ 3 grid so that
boring towns, she has compiled the following data on nonadjacent moves are minimized.
288 Part 1 • Operations Management

1 2 3 4 5 6 Number of Customers
1 - Relaxation Lounge 50 25 75 From/To Women's Men's Boys' Girls' Infants Housewares
2 - Facial 10 75 Women's — 20 50 50 50 70
3 - Massage 30 50 50 Men's — 20 10 20
4 - Power Shower 25 Boys' 20 — 20
5 - Mineral Bath 50 50 Girls' 30 50 — 30
6 - Sauna Infants 30 —
Housewares 40 —
7-2. Spiffy Dry Cleaners has recently changed management,
and the new owners want to revise the current layout. The
store performs six main services: (1) laundry, (2) dry 7-5. Rent With Us Management Inc. has purchased a large hous-
cleaning, (3) pressing, (4) alterations, (5) delivery, and ing complex and must decide where to locate its offices and
(6) tuxedo rental. Each is located in a separate department, service facilities. The company has learned that locating each
as shown here. The load summary chart gives the current service in a different apartment building helps control the be-
level of interaction between the departments. Calculate the havior of tenants, but it would also like to keep unnecessary
number of nonadjacent loads for the current layout. Design transit time to a minimum. Data collected on movements be-
an alternative layout to minimize the number of nonadja- tween facilities during a six month period from a similar
cent loads. apartment complex are shown below. Construct a layout dia-
gram on a 2 ⫻ 3 grid that minimizes nonadjacent movement.

3 1 2

Site to Site Travel

Manage- Rent Main-
6 2 5 From/To ment Collection Sales Grounds tenance
1. Management — 20 35 25 20
2. Rent collection 50 — 35
3. Sales 40 — 10
Load Summary Chart
4. Grounds 20 — 40
1 2 3 4 5 6
5. Maintenance 20 10 50 —
1 — 125 40
2 — 45 75
3 — 20 235 200 7-6. Avalanche, Inc. is a manufacturer of premium snow skis.
4 60 30 10 — 85 50 The work is a combination of precision machining and
5 — 10 skilled craftsmanship. Before completion, skis are processed
6 40 30 150 — back and forth between six different departments: (1) mold-
ing, (2) cutting, (3) fiberglass weaving, (4) gluing, (5) finish-
ing, and (6) waxing. Avalanche is opening a new production
7-3. Given the following load summary chart, design a layout on
facility and wants to lay it out as efficiently as possible. The
a 2 ⫻ 3 grid that will minimize nonadjacent loads.
number of loads of material moved from department to de-
partment at existing operations in other plants is shown
Load Summary Chart below. Arrange the department for Avalanche’s new plant in
From/To 1 2 3 4 5 a 2 ⫻ 3 grid so that nonadjacent loads are minimized.
1 — 50 25
2 — 20 100
Load Summary Chart To
3 30 10 — 75
From 1 2 3 4 5 6
4 40 —
1 — 100 75 100 60
5 60 —
2 10 — 45 60
3 30 — 85
7-4. Pratt’s Department Store is opening a new store in The Cen- 4 100 50 — 70
ter’s Mall. Customer movement tracked in its existing stores is 5 25 70 30 40 — 65
shown below. Design a layout for Pratt’s new store on a 2 ⫻ 3 6 65 35 —
grid that will minimize nonadjacent customer movement.
 Chapter 7 • Capacity and Facilities Design 289

7-7. Marillion Hospital is building a satellite clinic in the Cold

Harbor area of Richmond. The design committee has col- Customer Flow To
lected data on patient movement from similar facilities in From 1 2 3 4 5 6
hopes of making the new facility more efficient and 1 — 50 100 25 60
customer-friendly. 2 40 — 80 150
3 10 70 — 55
4 10 80 —
Patient Movements To 5 40 80 — 30
From 1 2 3 4 5 6 6 60 50 —
1 Intake — 50 10 25 10 100
2 Exam room — 30 40 20 20
3 Radiology 40 — 20 60 40 7-10. Flying Flags is opening a new theme park in southern Indi-
4 Laboratory 10 10 — 10 40 ana. The park will have six main attractions: (a) animal
5 Orthopedics 30 20 10 — 30 kingdom, (b) Broadway shows, (c) carousel and other kid-
die rides, (d) daredevil roller coasters, (e) eating places,
6 Waiting room 40 60 50 20 50 —
(f) flying machines, and (g) games. Data on customer flow
patterns from similar parks is shown here, along with the
layout for a similar park in Virginia. Calculate the nonadjacent
Initial Layout loads for the Virginia park; then improve the design for the
new Indiana location.
5 2 3

From/To 1 2 3 4 5 6
1 — 20 100 10 10 20
1 6 4
2 — 30 50
3 20 —
4 50 — 50 300
a. Calculate the nonadjacent loads for the initial layout. 5 30 50 60 40 — 50
b. Which pairwise exchange of departments would most 6 10 200 60 —
improve the layout?
7-8. Social Services is moving into a new facility. Historical
data on client visitation per month among its six depart-
ments is shown below. Design a layout for the new facility
A B C
on a 2 ⫻ 3 grid that minimizes the distance clients must
travel to receive services.

D E F
To
From 1 2 3 4 5 6
1 — 140 100
2 — 200
7-11. Design a layout on a 2 ⫻ 3 grid that satisfies the prefer-
3 100 —
ences listed here.
4 80 —
5 70 — 60
6 60 100 — Department A
I
Department B O
7-9. Tech Express provides technical assistance to customers U A
Department C O I
through six separate departments. While much of the com-
O I O
munication is electronic, it is helpful for departments work-
Department D X X
ing together on a customer’s request to be physically located O O
near to each other. Given the following data on customer Department E O
“flow” between departments, design a layout on a 2 ⫻ 3 grid X
that will facilitate the maximum collaboration among de- Department F
partments. How much customer flow is nonadjacent?
290 Part 1 • Operations Management

7-12. Design a layout on a 2 ⫻ 3 grid that satisfies these 7-15. Best Vision is revamping its assembly lines to improve effi-
preferences. ciency. As shown below, there are 10 steps to assembling a
television set.
a If Best needs to produce 120 televisions in a 40-hour
Department A work week, how should the line be balanced? Given
A
that one worker is assigned to each workstation, how
Department B O
many workers are required to operate the line? What is
O I
Department C X O the efficiency of the line?
I U O b If demand for televisions is reduced to 100 sets per
Department D A I 40-hour week, how many workers will be needed to
I O man the line? Re-balance the line and re-calculate its
Department E U efficiency.
X
Department F
Task Precedence Time (min)
A None 8
7-13. Amber Ale use a simple five-step process to prepare its prod- B A 4
ucts for shipment. Because of recent increases in demand, the C A 7
company is setting up an assembly line to do the work. How
D A 3
should the line be constructed if Amber needs a new product
E B 7
off the line every 10 minutes? Draw a precedence diagram,
group the tasks into workstations, determine the efficiency of
F C, E 11
the line, and calculate the expected output for an eight-hour G D 2
day. (There are multiple solutions to this problem.) H G 8
I F, H 5
J I 7
Task Precedence Time (mins)
A None 5
B A 2 7-16. Professional Image Briefcases is an exclusive producer of
C A 4 handcrafted, stylish cases. The company assembles each
D A 7 case with care and attention to detail. This laborious process
E B, C, D 5 requires the completion of the six primary work elements
listed here.

7-14. The Henry Street Mission uses volunteers to assemble care

packages for needy families during the holiday season. The Work Element Precedence Time (min)
mission would like to organize the work as efficiently as A Tan leather — 30
possible. A list of tasks, task times, and precedence re- B Dye leather A 15
quirements follows:
C Shape case B 10
D Mold hinges and fixtures — 5
Task Precedence Time (mins) E Install hinges and fixtures C, D 10
A — 6 F Assemble case E 10
B A 3
C B 7
a. Construct a precedence diagram for the manufacturing
D B 5
of briefcases.
E C, D 4
b. Compute the flow time required for assembling one
F E 5
briefcase and the cycle time necessary to assemble 50
cases in a 40-hour week.
a. If the mission wants to complete a care package every c. Balance the line and compute its efficiency.
10 minutes, how many volunteers should be called in? d. How would you change the line to produce 80 cases
Balance the line and calculate the efficiency. How many per week?
packages can be assembled in a four-hour period? 7-17. The TLB Yogurt Company must be able to make 600 party
b. Suppose that volunteers are plentiful. Balance the line cakes in a 40-hour week. Use the following information to
to maximize output. What is the efficiency of the line? draw and label a precedence diagram, compute cycle time,
How many care packages can be assembled in a four- compute the theoretical minimum number of workstations,
hour period? balance the assembly line, and calculate its efficiency.
 Chapter 7 • Capacity and Facilities Design 291

7-20. The precedence diagram and task times (in minutes) for as-
Performance sembling McCauley’s Mystifier are shown here. Set up an
Work Element Precedence Time (min) assembly line to produce 125 mystifiers in a 40-hour week.
A — 1 Balance the line and calculate its efficiency.
B A 2
C B 2
D A, E 4 8 5
E — 3 A B F 4 J 9
F C, D 4

C D E H 7 K 3
7-18. The Speedy Pizza Palace is revamping its order-process- 6 10 2
ing and pizza-making procedures. In order to deliver fresh
pizza fast, six elements must be completed. G I
5 2
Work Element Precedence Time(min)
A Receive order — 2
7-21. The precedence diagram and task times (in minutes) for as-
B Shape dough A 1 sembling modular furniture are shown below. Set up an
C Prepare toppings A 2 assembly line to assemble 1000 sets of modular furniture in a
D Assemble pizza B, C 3 40-hour week. Balance the line and calculate its efficiency.
E Bake pizza D 3
F Deliver pizza E 3
0.1 0.6
a. Construct a precedence diagram and compute the lead A B
time for the process.
b. If the demand for pizzas is 120 per night (5:00 p.m. to 0.4
1:00 a.m.), what is the cycle time?
C D E I
c. Balance the line and calculate its efficiency.
0.5 0.4 0.8
d. How would the line change to produce 160 pizzas per
night?
7-19. Professor Garcia has assigned 15 cases in his OM Seminar F G H J K
class to be completed in a 15-week semester. The students, 0.3 0.7 0.5 0.9 2.0
of course, are moaning and groaning that the caseload can-
not possibly be completed in the time allotted. Professor
Garcia sympathetically suggests that the students work in 7-22. The Costplus Corporation has set a processing quota of 80
groups and learn to organize their work efficiently. Know- insurance claims per 8-hour day. The claims process con-
ing when a situation is hopeless, the students make a list of sists of five elements, which are detailed in the following
the tasks that have to be completed in preparing a case. table. Costplus has decided to use an assembly-line
These tasks are listed here, along with precedence require- arrangement to process the forms and would like to make
ments and estimated time in days. Assuming students will sure they have set up the line in the most efficient fashion.
work five days a week on this assignment, how many stu- Construct a precedence diagram for the claims process and
dents should be assigned to each group, and what is the calculate the cycle time required to meet the processing
most efficient allocation of tasks? Can 15 cases be com- quota. Balance the assembly line and show your arrange-
pleted in a semester? Explain your answer. ment of workstations. Calculate the line’s efficiency. How
many claims can actually be processed on your line?

Time
Element Description Precedence (days) Performance
a Read case — 1 Element Precedence Time (min)
b Gather data a 4 A — 4
c Search literature a 3 B A 5
d Load in data b 1 C B 2
e Run computer analysis d 4 D A 1
f Write/type case c, e 4 E C, D 3
292 Part 1 • Operations Management

7-23. Given in the following table are the tasks necessary for given below to design an assembly line that will produce
final assembly of a hospital bed, the length of time needed a new product every 12 minutes. Construct a precedence
to perform each task, and the operations that must be com- diagram, group the tasks into workstations, determine the
pleted prior to subsequent operations. Construct a prece- efficiency of the line, and calculate the expected output
dence diagram and balance the assembly line for a desired for an eight-hour day.
cycle time of 14 minutes. Draw a schematic diagram of the
balanced line. How many beds can actually be assembled
in an eight-hour period?
Task Precedence Time (mins)
A None 6
Element Precedence Time (min) B A 2
A None 4 C B 2
B None 5 D A 1
C None 8 E A 7
D A 4 F A 5
E A, B 3 G C 6
F B 3 H D, E, F 5
G D, E 5 I H 3
H F 7 J G 5
I G, H 1 K I, J 4
J I 7
K C, J 4

7-26. Print-for-All is a family-owned print shop that has grown

7-24. Given in the following table are the tasks necessary for the from a three-press two-color operation to a full-service fa-
assembly of Fine Cedar Chests, the length of time needed cility capable of performing a range of jobs from simple
to perform each task, and the operations that must be com- copying to four-color printing, scanning, binding, and
pleted prior to subsequent operations. more. The company is moving into a new facility and
would like some help arranging its 16 processes into an
efficient, yet flexible, layout. A list of the most popular
Element Precedence Time (min) jobs is shown with processing information. How would
A None 2 you arrange the processes to ensure an efficient and flexi-
B A 4 ble operation?
C B 5
D None 5
E D 3 Processes
F None 1 Jobs 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
G F 2 A X X X
H C, E, G 4 B X X
C X X X
D X X X X
a. Calculate the cycle time necessary to complete 300 E X X
cedar chests in a 35-hour week. F X X X
b. What is the minimum number of workstations that can G X X X
be used on the assembly line and still reach the produc-
H X X X
tion quota? Balance the line and calculate the line’s
I X X X X
efficiency.
J X X
c. Rebalance the line with a cycle time of 9 minutes. How
do the number of workstations, output, and line efficiency K X X X
change? L X X X X
7-25. Quick Start Technologies (QST) helps companies design M X X X
facility layouts. One of its clients is building five new as- N X X X
sembly plants across the continental United States. QST O X X X X
will design the assembly-line layout and ship the layout in- P X X X
structions, along with the appropriate machinery to each Q X
new locale. Use the precedence and time requirements