Components of Facility Planning

FACILITIES PLANNING AND

FACILITIES

DESIGN LOCATION

FACILITIES
FACILITIES SYSTEM
PLANNING

FACILITIES
FACILITIEES
DESIGN
LAYOUT

Prepared By: FACILITIES

HANDLING
SYSTEM

Prof. Rene D. Estember

May 6, 2019

Components of Facility Planning Components of Facility Planning

Facility Location
• Refers to the placement of facility with which it
interfaces
• It includes placement and orientation on a specific
plot of land
Facility Systems
• Consists of the structural systems, the atmospheric
systems, the lighting/electrical/communication
systems, life safety systems and the sanitation
systems
Facility Layout
• Physical arrangement of equipment, machinery,
furnishings, production areas, production-related
areas and personnel areas within the building
Facility Handling System
• Consists of the mechanism needed to satisfy the
required facility interactions
• Consists of the materials, personnel, information and
equipment handling systems required to support
production.

Location Strategy Location and Innovation

 Cost is not always the most important
 One of the most important decisions a aspect of a strategic decision
firm makes
 Four key attributes when strategy is
 Increasingly global in nature based on innovation
 Long term impact and decisions are  High-quality and specialized inputs
difficult to change  An environment that encourages
 The objective is to maximize the benefit investment and local rivalry
of location to the firm  A sophisticated local market
 Local presence of related and supporting
industries

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 Location Decisions Location Decisions
Country Decision Critical Success Factors
 Long-term decisions 1. Political risks, government rules,
attitudes, incentives
 Decisions made infrequently 2. Cultural and economic issues
3. Location of markets
 Decision greatly affects both fixed 4. Labor availability, attitudes,
and variable costs productivity, costs
5. Availability of supplies,
 Once committed to a location, many communications, energy
6. Exchange rates and currency risks
resource and cost issues are difficult
to change
Figure 8.1

Location Decisions Location Decisions

Region/ Critical Success Factors Site Decision Critical Success Factors
Community
1. Corporate desires
Decision 1. Site size and cost
2. Attractiveness of region
2. Air, rail, highway, and waterway
3. Labor availability, costs, attitudes towards systems
MN
unions
3. Zoning restrictions
4. Costs and availability of utilities
WI 4. Nearness of services/ supplies
5. Environmental regulations needed
MI
6. Government incentives and fiscal policies
5. Environmental impact issues
OH 7. Proximity to raw materials and customers
IL IN
8. Land/construction costs

Figure 8.1 Figure 8.1

Factors That Affect Factors That Affect

Location Decisions Location Decisions
 Labor productivity  Exchange rates and currency risks
 Wage rates are not the only cost  Can have a significant impact on cost structure
 Lower productivity may increase total cost  Rates change over time

 Costs
Labor cost per day  Tangible - easily measured costs such as utilities,
= cost per unit
Productivity (units per day) labor, materials, taxes
 Intangible - less easy to quantify and include
Connecticut Juarez education, public transportation, community, quality-
of-life
$70 $25
= $1.17 per unit = $1.25 per unit
60 units 20 units

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 Factors That Affect Factors That Affect
Location Decisions Location Decisions
 Attitudes  Proximity to markets
 National, state, local governments toward private and  Very important to services
intellectual property, zoning, pollution, employment
stability  JIT systems or high transportation costs may make it
important to manufacturers
 Worker attitudes towards turnover, unions,
absenteeism  Proximity to suppliers
 Globally cultures have different attitudes towards  Perishable goods, high transportation costs, bulky
punctuality, legal, and ethical issues products

Factors That Affect Growth Competitiveness

Location Decisions Index of Countries
Country 2004 Rank 2003 Rank
 Proximity to competitors Finland 1 1
 Called clustering USA 2 2
 Often driven by resources such as natural, information, Sweden 3 3
capital, talent Taiwan 4 5
Japan 9 11
 Found in both manufacturing and service industries
UK 11 15
Germany 13 13
Canada 15 16
New Zealand 18 14
France 27 26
Russia 70 70

Clustering of Companies Clustering of Companies

Industry Locations Reason for clustering Industry Locations Reason for clustering
Wine makers Napa Valley (US) Natural resources of Theme parks Orlando A hot spot for
Bordeaux region land and climate entertainment, warm
(France) weather, tourists, and
inexpensive labor
Software firms Silicon Valley, Talent resources of
Boston, Bangalore bright graduates in Electronic firms Northern Mexico NAFTA, duty free
(India) scientific/technical export to US
areas, venture
capitalists nearby
Computer Singapore, Taiwan High technological
Race car Huntington/North Critical mass of talent hardware penetration rate and
builders Hampton region and information manufacturers per capita GDP,
(England) skilled/educated
workforce with large
pool of engineers

Table 8.3 Table 8.3

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 Clustering of Companies Factor-Rating Method
Industry Locations Reason for clustering  Popular because a wide variety of factors
Fast food Sites within one Stimulate food sales, can be included in the analysis
chains mile of each other high traffic flows
 Six steps in the method
1. Develop a list of relevant factors called critical success
General aviation Wichita, Kansas Mass of aviation skills factors
aircraft
2. Assign a weight to each factor
3. Develop a scale for each factor
4. Score each location for each factor
5. Multiply score by weights for each factor for each location
6. Recommend the location with the highest point score

Table 8.3

Factor-Rating Example Locational

Break-Even Analysis
Critical Scores
Success (out of 100) Weighted Scores
Factor Weight France Denmark France Denmark  Method of cost-volume analysis used for
Labor industrial locations
availability
and attitude .25 70 60 (.25)(70) = 17.5 (.25)(60) = 15.0  Three steps in the method
People-to 1. Determine fixed and variable costs for each location
car ratio .05 50 60 (.05)(50) = 2.5 (.05)(60) = 3.0
Per capita 2. Plot the cost for each location
income .10 85 80 (.10)(85) = 8.5 (.10)(80) = 8.0 3. Select location with lowest total cost for expected
Tax structure .39 75 70 (.39)(75) = 29.3 (.39)(70) = 27.3 production volume
Education
and health .21 60 70 (.21)(60) = 12.6 (.21)(70) = 14.7
Totals 1.00 70.4 68.0

Table 8.3

Locational Break-Even Locational Break-Even

Analysis Example Analysis Example
Three locations: –
$180,000 –
–
Fixed Variable Total $160,000 –
City Cost Cost Cost $150,000 –
–
Akron $30,000 $75 $180,000 $130,000 –
–
Annual cost

Bowling Green $60,000 $45 $150,000 $110,000 –

–
Chicago $110,000 $25 $160,000 –
$80,000 –
Selling price = $120 –
$60,000 –
Expected volume = 2,000 units –
–
Akron Chicago
$30,000 – lowest
Bowling Green
lowest cost
– cost lowest cost
$10,000 –
Total Cost = Fixed Cost + Variable Cost x Volume |
– | | | | | |
Figure 8.2 0 500 1,000 1,500 2,000 2,500 3,000
Volume

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 Center-of-Gravity Method Center-of-Gravity Method
 Finds location of distribution center  Place existing locations on a
that minimizes distribution costs coordinate grid
 Considers  Grid origin and scale is arbitrary
 Location of markets  Maintain relative distances
 Volume of goods shipped to those  Calculate X and Y coordinates for
markets ‘center of gravity’
 Shipping cost (or distance)  Assumes cost is directly proportional
to distance and volume shipped

Center-of-Gravity Method Center-of-Gravity Method

North-South
∑dixQi New York (130, 130)
i
x - coordinate = Chicago (30, 120)
∑Qi 120 –
i Pittsburgh (90, 110)
90 –
∑diyQi
i
y - coordinate =
∑Qi 60 –
i
30 –
where dix = x-coordinate of location i Atlanta (60, 40)
diy = y-coordinate of location i
–| | | | | |
East-West
Qi = Quantity of goods moved to or from 30 60 90 120 150
location i Arbitrary
origin

Center-of-Gravity Method Center-of-Gravity Method

Number of Containers North-South
Store Location Shipped per Month New York (130, 130)
Chicago (30, 120)
Chicago (30, 120) 2,000 120 –
Pittsburgh (90, 110) 1,000
Pittsburgh (90, 110)
New York (130, 130) 1,000
Atlanta (60, 40) 2,000 90 – + Center of gravity (66.7, 93.3)

60 –
(30)(2000) + (90)(1000) + (130)(1000) + (60)(2000)
x-coordinate =
2000 + 1000 + 1000 + 2000
30 –
= 66.7 Atlanta (60, 40)

(120)(2000) + (110)(1000) + (130)(1000) + (40)(2000) –| | | | | |

y-coordinate = East-West
2000 + 1000 + 1000 + 2000 30 60 90 120 150
Arbitrary
= 93.3 origin

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 Transportation Model Worldwide Distribution of
Volkswagens and Parts
 Finds amount to be shipped from
several points of supply to several
points of demand
 Solution will minimize total production
and shipping costs
 A special class of linear programming
problems

Figure 8.4

Service Location Strategy Location Strategies

Service/Retail/Professional Location
1. Purchasing power of customer-drawing area Revenue Focus
2. Service and image compatibility with demographics of Volume/revenue
Drawing area; purchasing power
the customer-drawing area Competition; advertising/pricing
3. Competition in the area
Physical quality
4. Quality of the competition Parking/access; security/lighting;
appearance/image
5. Uniqueness of the firm’s and competitors’ locations
6. Physical qualities of facilities and neighboring Cost determinants
Rent
businesses Management caliber
7. Operating policies of the firm Operations policies (hours, wage rates)
Goods-Producing Location
Cost Focus
Tangible costs
Transportation cost of raw material
Shipment cost of finished goods
Energy and utility cost; labor; raw
material; taxes, and so on
Intangible and future costs
Attitude toward union
Quality of life
Education expenditures by state
Quality of state and local government

8. Quality of management
Table 8.4

Location Strategies Location Strategies

Service/Retail/Professional Location
Techniques
Regression models to determine
importance of various factors
Factor-rating method
Traffic counts
Demographic analysis of drawing area
Purchasing power analysis of area
Center-of-gravity method
Geographic information systems
Goods-Producing Location
Techniques
Transportation methods
Factor-rating method
Locational break-even analysis
Crossover charts
Service/Retail/Professional Location
Assumptions
Location is a major determinant of
revenue
High customer-contact issues are critical
Costs are relatively constant for a given
area; therefore, the revenue function is
critical
Goods-Producing Location
Assumptions
Location is a major determinant of cost
Most major costs can be identified
explicitly for each site
Low customer contact allows focus on
the identifiable costs
Intangible costs can be evaluated

Table 8.4 Table 8.4

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 How Hotel Chains Select Sites Telemarketing/Internet
Industries
 Location is a strategically important
decision in the hospitality industry
 La Quinta started with 35 independent
 Require neither face-to-face contact
variables and worked to refine a regression nor movement of materials
model to predict profitability  Have very broad location options
 The final model had only four variables
 Traditional variables are no longer
 Price of the inn r2 = .51
 Median income levels 51% of the relevant
profitability is
 State population per inn predicted by just  Cost and availability of labor may
 Location of nearby colleges these four
variables! drive location decisions

Geographic Information Geographic Information

Systems (GIS) Systems (GIS)
 New tool to help in location analysis
 Enables more complex demographic
analysis
 Available data bases include
 Detailed census data
 Detailed maps
 Utilities
 Geographic features
 Locations of major services

Machine Assignment Problem Machine Assignment Problem

• Determination of optimum number of identical machine to
assign to an operator n’ = (a+ t)( a+ b)

Deterministic Model: Where:

a = concurrent activity time ( e.g. loading and unloading) (a+t) = machine cycle time ( excluding idle time)
b = independent operator activity time ( e.g walking inspecting, packing (a+b) = time devoted by an operator at each machine during
etc.) the cycle.
t = independent machine time ( e.g. automatic machining time) Tr = max (a + t), m(a + b)
n’ = ideal number of identical machines to assign to an operator
m = number of identical machines assigned to an operator.
Tr = repeating cycle time Tr = (a + t) m < n’
Io = idle operator time during the repeating cycle m(a + b) m > n’
Im = idle time for each machine during a repeating cycle

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 Machine Assignment Problem Machine Assignment Problem

Im = 0 m < n’ Where:
Tr – (a + t) m > n’ Co = cost per operator-hour
Cm = cost per machine hour
Io = Tr – (a + t) m < n’
0 m > n’
TC(m) = cost per unit produced based on an
assignment of m machines per operator
Cost Computation
TC (m) = (Co + mCm)(a + t)/m m < n’
(Co + mCm)(a + b) m > n’

Machine Assignment Problem Machine Assignment Problem

Example:
It takes 1 minutes to load and 3 minutes to unload the machine.
Inspection, packing and travel between machines total 1 minute.
Machines run automatically for 20 minutes. Operators cost $12/ hour
and machines cost $30/hour.
a. What is the maximum number of machines that can be assigned to
an operator without creating machine idle time during the repeating
cycle?
b. What assignment minimizes the cost per unit produced?
c. What is the minimum number of machines that can be assigned to
an operator without creating operator idle time?
d. If 20 machines are to be allocated, how many operators are
required?
Solution:
a = 4 mins. b = 1 min. t = 20 mins.
Cm = $30/hr Co = $12/hr
a. n’ = (a+b)÷(a+t) = (4+20)÷(4+1)= 4.8 machines
for Im to be equal to zero m should be less than or equal to n’, therefore assign
4 machines to an operator to have zero machine idle time during the
repeating cycle.
b. Evaluate the cost/unit of assigning 4 and 5 machines to an operator
TC (4) = [12/60 + 4(30/60)][(4+20)/4] = $13.2/unit
TC (5) = [12/60 + 5(30/60)](4+1) = $13.5/unit
Assigning 4 machines minimizes cost/unit produced
c. For Io to be equal to zero, m should be greater than n’, therefore the
minimum number of machines to be assigned to an operator is 5 machines.
d. 5 operators ( 20÷4 ) since assignment of 4 machines to an operation is the
less costly option.

Man-Machine Chart Man-Machine Chart

• A descriptive analog model showing the man- Example:

A newly setup inspection line will be used for testing the tensile
machine relationships graphically against a time
scale.
• Another approach used to determine the
assignment of operators to machine
• More useful in analyzing the man-machine
relationships when non identical machines are
being tended by one operator.
strength of a fabric thread. The process includes 1 minute
loading and unloading of fabric to the machine, 1 minute
packing and 4 minutes testing ( done by the machine).
Machines consume small space which make travel to and from
machines unnecessary. The objective is to balance the use of
both man and machine but since the machines were acquired
at high cost, it is given greater weight.
a. Evaluate the following man-machine ratio of 1:1, 1:2, 1:3 and
determine the best assignment.
b. If there were 20 machines to be operated how many
operators are required.

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 Man-Machine Chart Time
( min)
1
Man

a1
Machine 1 Machine 2 Machine 3

a1
Personnel Requirement
2 a2 t a2
3 a3 t t a3
4 t t t
5 t t t
Solution:
Time
Time
( min)
Man Machine 1 Machine 2
6
7
8
a1
a2
a3
a1
t
t
t
a2
t
t
t
a3
a. man-machine ratio of 1:2 is the best
Man Machine 1 a1 a1
( min)
1 a a
2
3
a2 t
t
a2
t
9
10
b1
b2
t
t
t
t
t
t assignment with 80% utilization of man and
2 t 11 b3 t t
3
4
t
t
4
5
t
t
t
t
12
13
a1
a2
a1
t a2
t
100% utilization of machine
6 a1 a1 t 14 a3 t t a3
5 t
7 a2 t a2 15 b1 t t t
6 a a
8 b1 t t 16 b2 t t t
7 b t
9 b2 t t 17 b3 t t
8 t
10 t t
9
10
t
t
11
12
a1
a2
a1
t
t
a2
18
19
20
a1
a2
a3
a1
t
t
a2
t
t

a3
b. 10 operators ( 20÷2) are required to handle
11 a a
12
13
b t
t
13
14
b1
b2
t
t
t
t
21
22
b1
b2
t
t
t
t
t
t the 20 machines with 1:2 man-machine ratio
15 t t 23 b3 t t
14 t
16 a1 a1 t 24 a1 t
15 t

Man-machine ration = 1:1 Man-machine ratio = 1:2 Man-machine ratio = 1:3

Tr = 5 mins. Tr = 5 mins. Tr = 6 mins.

Man % Utilization = 40% Man % Utilization = 80% Man % Utilization = 100%
Machine % Utilization = 100% Machine % Utilization = 100% Machine % Utilization = 83%

Personnel Requirement Personnel Requirement

Deterministic Model
The number of employees required in a new facility is typically
Personnel requirements are function of the following proportional to the volume and variety of production. For
factors: example, if:
• unionized or non unionized labor force n = number of types of operations
• Level of automation Si = Standard time required for an operation i
Qi = Quantity to produce on operation i per day
• Production Rate
H = Production time available per day
• Management policies on subcontracting and overtime E = Plant efficiency
• Salary rate in the area Then the number of production employees required is given by
• Health insurance rate
P =  SiQi÷HE
n
• Others.
i -1

Space requirements Workstation space requirements

• Modern manufacturing approaches are changing
drastically space requirements in production, storage
areas and offices. Specifically, space requirements are • A workstation space requirements include:
being reduced because: – space for equipment,
– Products are delivered to the point of use in smaller lot and unit – space for materials
load sizes – space for personnel
– Decentralization storage areas are located at the point of use
– Less inventories are carried out ( products are pulled from
preceding process using kanbans and internal and external • equipment space includes space for:
inefficiencies have been eliminated) – The equipment
– More efficient layout arrangement ( manufacturing cells ) are used – Machine travel
– Companies are downsizing ( focused factories, leaner – Machine maintenance
organizational structures, decentralization of function etc)
– Plant services
– Offices are shared and telecommunication is used

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 Equipment space requirements Equipment space requirements
• Equipment space requirement should be readily available
– Maximum vertical travel
from Machinery Data Sheet. Machine Data Sheet contains
at least the following information: – Static width at maximum point
– Machine manufacturer and type – Maximum travel to the left
– Machine model and serial number – Maximum travel to the right
– Machine manufacturer and type – Static depth at maximum point
– Machine model and serial number – Maximum travel toward the operator
– Location of machine safety stops – Maximum travel away from the operator
– Floor loading requirements – Maintenance requirements and areas
– Static height at maximum point – Plant service requirements and areas

Equipment space requirements Material space requirements

Total machinery area requirement is computed as:
n
The material areas for a workstation consist of space for:
TMA =  [(TW)i(TD)i] + [(MA)i + (PSA)i]
i=1 • Receiving and storing inbound materials
where: • In-process materials
TW = Total Width ( static width + maximum travel to the left and right) • Storing outbound materials and shipping
TD = Total Depth ( Static depth + maximum travel toward and away
from the operator) • Storing and shipping waste and scrap
MA = Maintenance area requirement • Tools, fixtures, jigs, dies and maintenance materials
PSA = Plant service area requirement
n = total number of machines

Personnel area requirements Workstation Design

The personnel area for a workstation consists of space for: Factors to consider in workstation design:
• The operator • Workstation should be designed so the operator can pick up
and discharge materials without walking or making long
• Material Handling awkward reaches.
• Operator ingress and egress • Workstation should be designed for efficient and effective
• Aisle space requirement: utilization of the operator
min. 30 in. - if operator travel past stationary objects • Workstation should be designed to minimize the time spent
min. 36 in. - if operator walks between a stationary manually handling materials
object and an operating machine • Workstation should be designed to maximize operator safety
comport and productivity
min. 42 in - if operator walks between two operating
• Workstation should be designed to minimize hazards, fatigue
machines. and eye strain

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 Department area requirements Aisle Requirements

Departmental area requirements include: Aisle Allowance estimate

• Workstation space requirements If the target load is Aisle Allowance
• Material handling ( within the department) space Percentage
requirements Less than 6 ft2 5 -10
• Aisle space requirements Between 6 and 12 ft2 10 – 20
Between 12 and 18 ft2 20 – 30
• Workstation service area requirements
Greater than 18 ft2 30 – 40

Aisle Arrangement Production Space Requirement

• Aisle should be located in a facility to promote effective flow
Work Auxilliary Operator Material Number
Department Work Center Length Area
• Aisle must neither be too narrow nor too wide Center Width (ft) Area Space Space Subtotal Allowance of
Total
Name Name (ft) ( sq. ft) Space
• Aisle widths should be determined by considering type and Code ( sq ft) ( sq ft ) ( sq ft) machines
General Vertical
volume flow to be handled by the aisle 1202 15 15 225 70 30 50 375 50% 563 2 1126
Machining Milling
• Non-right angle intersections should be avoided in planning for Planner 2005L 25 5 125 40 20 40 225 25% 282 1 282
aisles
• Aisles should be straight and lead to doors. Punch Press 3058 10 10 100 30 20 20 170 40% 238 2 476

• Aisles along the outside wall of a facility should be avoided Injection

6078 20 10 200 60 50 100 410 50% 615 3 1845
Molding
unless the aisle is used for entering or leaving the facility.
Otoscope
NC-machine 9087 20 8 160 50 30 30 270 25% 338 2
• Column spacing should be considered when planning aisle Cell
676

spacing. Columns are often used to border the aisle but rarely Lathe 1212 15 8 120 40 20 30 210 50% 315 1 315
should be located in an aisle.
Auto-
2056 5 5 25 10 5 5 45 25% 57 1 57
Chucker
GRAND TOTAL 4777

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