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Facility Planning

Definition and Objectives Engineering Design Process Important Factors to Evaluate Facility Plans Evaluation of Alternative Facility Plans
- Pairwise Comparison Technique - Prioritization Matrix - Factor Analysis Technique

Material Handling Checklist Principles of Material Handling Objectives of Facility Layout Traditional Facility Layout Procedures
- Naddlers Ideal System Approach - Apples Plant Layout Procedure - Muthers Systematic Layout Planning - Immers Basic Steps - Reeds Plant Layout Procedure

Information Gathering
- Information about Product - Information about Schedule - Information about Process

Definition of Facility Planning

Facility Planning determines how an activitys tangible fixed assets best support achieving the activitys objectives.
a. In manufacturing, the objective is to support production.
b. In an airport, the objective is to support the passenger airplane interface. c. In a hospital, the objective is to provide medical care to patients.

Hierarchy of Facility Planning

Facility Location Facility Planning Facility Design Structural Design Layout Design Handling System Design Location: is the placement of a facility with respect to customers, suppliers, and other facilities with which it interfaces. Structure: consists of the building and services (e.g., gas, water, power, heat, light, air, sewage). Layout: consists of all equipment, machinery, and furnishings within the structure. Handling System: consists of the mechanism by which all interactions required by the layout are satisfied (e.g., materials, personnel, information, and equipment handling systems).

Significance of Facility Planning

1. Since 1955, approximately 8% of the gross national product (GNP) is spent in new facilities in the U.S. :
Industry GNP % 3.2 1.6 1.5 1.0 8.0

Manufacturing Public Utilities Commercial Communication Total

2. It is estimated that 20 to 50 % of operating costs within manufacturing are attributed to material handling. It is generally agreed that effective facilities planning can reduce material handling costs by 10 to 30 %.

Strategic Facilities Planning Issues

1. 2. Number, location, and sizes of warehouses and/or distribution centers. Centralized versus decentralized storage supplies, raw materials, work-in-process, and finished goods for single- and multi-building sites, as well as single- and multi-site companies. 3. Acquisition of existing facilities versus design of model factories and distribution centers of the future. 4. Flexibility required because of market and technological uncertainties. 5. Interface between storage and manufacturing. 6. Level of vertical integration, including "subcontract versus manufacture" decisions. 7. Control systems, including materials control and equipment control. 8. Movement of materials between buildings, between sites. 9. Changes in customers' and suppliers' technology as well as firm's own manufacturing technology and materials handling, storage, and control technology. 10. Design-to-cost goals for facilities.

Facility Planning Objectives

1. Support the organization's mission through improved material handling, materials control, and good housekeeping.

2. Effectively utilize people, equipment, space, and energy.

3. Minimize capital investment. 4. Be flexible and promote ease of maintenance. 5. Provide for employee safety and job satisfaction.

Engineering Design Process

Typically, design problems do not have well-defined, unique, optimum solutions. We are interested in obtaining a satisfactory solution.
General Procedure for Solving Engineering Design Problems
1. Formulate the problem.
2. Analyze the problem. 3. Search for alternative solutions. 4. Evaluate the design alternatives.

5. Select the preferred design.

6. Implement the design.

Application of the Engineering Design Process to Facility Planning

1. Define (or redefine) the objective of the facility: Specify quantitatively the products to be produced or service to be provided. 2. Specify the primary and support activities to be performed in accomplishing the objective: Requirements for primary activities include operations, equipment, personnel, and material flows. 3. Determine the interrelationships among all activities: Both qualitative and quantitative relationships should be defined. 4. Determine the space requirements for all activities: These are determined considering the equipment, materials, and personnel requirements. 5. Generate alternative facility plans: Including alternative facility locations and alternative designs for the facility. 6. Evaluate alternative facility plans: Determine the important factors (see list of factors). For each candidate plan, evaluate if and how those factors will affect the facility and its operations.

Application of the Engineering Design Process to Facility Planning (cont.)

7. Select a facility plan:
Cost may not be the only major consideration. Use the information in step 6 to determine a plan (pairwise comparison is a good ranking procedure). 8. Implement the facility plan:

Considerable amount of planning must precede the construction of a facility or the layout of an area.
9. Maintain and adapt the facility plan: The facility plan must be modified as new requirements are placed, e.g., new energy saving measures, changes in product design may require different flow pattern or handling equipment, etc. 10. Redefine the objective of the facility: Similar to step 1. Changes in product design and/or quantities may require changes into the layout plan.

Important Factors to Evaluate Facility Plans

In developing well-thought facilities design alternatives it is important to look into issues such as:
a) Layout characteristics - total distance traveled

- manufacturing floor visibility

- overall aesthetics of the layout - ease of adding future business b) Material handling requirements

- use for the current material handling equipment

- investment requirements on new equipment - space and people requirements

Important Factors to Evaluate Facility Plans (cont.)

c) Unit load implied
- impact on WIP levels - space requirements - impact on material handling equipment

d) Storage strategies
- space and people requirements - impact on material handling equipment - human factors risks

e) Overall building impact

- estimated cost of the alternatives - opportunities for new business

Pairwise Comparison Technique

It is a good ranking procedure. All combinations of two candidate plans are ranked for each factor.
If n = number of candidate plans, and m = number of factors, the total number of comparison is mn(n-1)/2. It is a good procedure in testing for inconsistencies, e.g., A > B, B > C, and C > A.

If there are not inconsistencies and, for example, four candidate plans (A, B, C, and D), the pairwise comparison may produce the following results: A<B B<C C>D



Next, a factor analysis technique can be used to determine the facility plan, i.e., assign a weight to each factor, and compute the total weight for each candidate plan.

Factor Analysis Technique

The facility plan scoring method is a very popular, subjective-decision making tool that is relatively easy to use. It consists of these steps:
Step 1. List all factors that are important - that have an impact on the facility plan decision.

Step 2.
Step 3.

Assign an appropriate weight (typically between 0 and 1) to each factor based on the relative importance of each.
Assign a score (typically between 0 and 100) to each facility plan with respect to each factor identified in Step 1.

Step 4.
Step 5.

Compute the weighted score for each factor for each facility plan by multiplying its weight by the corresponding score.
Compute the sum of the weighted scores for each facility plan and choose a facility plan based on these scores.

Example 1
A payroll processing company has recently won several major contracts in the Midwest region of the United States and Central Canada and wants to open a new, large facility to serve these areas. Because customer service is so important, the company wants to be as near its customers as possible. A preliminary investigation has shown that Minneapolis, Winnipeg, and Springfield, Illinois are the three most desirable locations,

and the payroll company has to select one of these. A subsequent

thorough investigation of each location with respect to eight important factors generated the raw scores and weights. Using the location scoring method, determine the best location for the new payroll processing


Example 1 (cont.)
Factors and weights for three locations
Score Weight 0.25 0.15 0.15 0.10 0.10 0.10 0.08 0.07 Factor Proximity to customer Land and construction prices Wage rates Property taxes Business taxes Commercial travel Insurance costs Office services Minneapolis 95 60 70 70 80 80 70 90 Winnipeg 90 60 45 90 90 65 95 90 Springfield 65 90 60 70 85 75 60 80

Example 1 Solution
Weighted scores for three locations
Weighted Score Factor Minneapolis Winnipeg Springfield

Proximity to customer
Land and construction prices Wage rates Property taxes

9.00 10.50 7.00

9.00 6.75 9.00

13.50 9.00 7.00

Business taxes
Commercial travel Insurance costs Office services

8.00 5.60 6.30

6.50 7.60 6.30

7.50 4.80 5.60

Sum of weighted scores




Prioritization Matrix
The prioritization matrix can be used to judge the relative importance of each criterion as compared to each other. Table 1 represents the prioritization of the criteria for the facilities design example. The criteria are labeled to help in building a table with weights: A. Total distance traveled B. Manufacturing floor visibility C. Overall aesthetics of the layout D. Ease of adding future business E. Use of material handling equipment G. Space requirements H. People requirements I. Impact on WIP levels J. Human factor risks K. Estimated cost of alternative

F. Investment in new material handling equipment The weights typically used to compare the importance of each pair of criteria are: 1 = equally important 5 = significantly more important 10 = extremely more important 1/5 = significantly less important 1/10 = extremely less important

Prioritization Matrix (cont.)

Note that the values in cells (i, j) and (j, i) are reciprocals. The resulting relative importance

is presented in the last column in parenthesis. The most important criterion for facilities
design selection is the impact on WIP levels (weight = 18.3), followed by the estimated cost of the solution (weight = 13.5). This same methodology can be employed to compare all facilities design alternatives in each weighted criterion. For example, suppose five layout alternatives are generated; namely, P, Q,. R, S, and T. Table 2 represents the ranking of the layout alternatives based on the impact of WIP levels criterion. If we construct a similar table for the remaining ten criteria, we will be able to evaluate each layout alternative in the eleven criteria to identify the best layout. The format of this final

table is presented in Table 3. The last column is computed as in Tables 1 and 2. The row
totals (represented by ) are added to obtain the grand total, after which the percentages (%P, , %T) are determined. These percentages tell us the relative goodness of each layout alternative. These results should be presented to plant management to facilitate final decisions regarding the layout.

Table 1: Prioritization Matrix for the Evaluation of Facilities Design Alternatives

Criteria A A 1 B 5 C 10 5 10 10 D 5 E 1 F 1 G 1 H 1 I 1 J 5 K Row totals (%) 1 32.0 (9.9) 7.6 (2.4)


1/5 1 1/5 5 1 5

1/5 1/5 1/10 1/5 1/5 1/10 1/5 1/5 1 5

1/10 1/5 1

1/10 1/10 1/10 1/5 1/5 1/10 1/10 1/10 2.3 (0.7) 1/5 1/5 1/5 1/5 1/10 1/5 1/10 17.4 (5.4) 1 1 5 5 1/5 1 1/5 34.4 (10.7)

1 1 1 1 7.7

5 5 10 5

5 5 10 10 10

5 5 10 5 10

5 1 10 5 5

1/5 1 1 1/5

41.0 (12.7)
23.0 (7.1) 22.9 (7.1) 59.0 (18.3) 39.2 (12.2) 43.4 (13.5) 322.2

1/5 1/5 1 1/5 1/5 5 5 1 5 1 1 1 5 5 5

1/5 1/5 1 1 5 5

1/10 1/5 1/5

1/5 5

Column Total

1/5 1 10.1 14.0

56.2 86.0 51.3 14.9 6.8

32.6 37.6 5.0

Table 2: Prioritization of Layout Alternatives Based on WIP Levels

Layout WIP Levels P Q R P 1 Q 5 R 10 S T Row totals (%) 7.3 (9.9) 1.6 (2.2) 22.0 (30.0) 21.3 (29.0) 21.2 (28.9) 73.4

1/10 1/5

1/5 1 1 10 5 5 10 10

1/5 1/10 1/10 1 10 5 1/5 1

T Column Total

1/10 1 1/5 5

17.2 31.0 2.5

16.2 6.5

Table 3: Ranking of Layouts by All Criteria

Criteria ABCDEFGH I J K Row totals (%)


.099 .183 = .018

.022 .183 = .004 .300 .183 = .055 .290 .183 = .053 .289 .183 = .053 .183

(%Q) (%R) (%S) (%T) Grand Total


Material Handling Checklist

Is the material handling equipment more than 10 years old? Do you use a wide variety of makes and models which require a high spare parts inventory? Are equipment breakdowns the result of poor preventive maintenance? Do the lift trucks go too far for servicing? Are there excessive employee accidents due to manual handling of materials? Are materials weighing more than 50 pounds handled manually? Are there many handling tasks that require 2 or more employees? Are skilled employees wasting time handling materials? Does material become congested at any point? Is production work delayed due to poorly scheduled delivery and removal of materials? Is high storage space being wasted? Are high demurrage charges experienced?

Material Handling Checklist (cont.)

Is material being damaged during handling? Do shop trucks operate empty more than 20% of the time? Does the plant have an excessive number of rehandling points? Is power equipment used on jobs that could be handled by gravity? Are too many pieces of equipment being used because their scope of activity is continued? Are many handling operations unnecessary? Are single pieces being handled where unit loads could be used? Are floors and ramps dirty and in need of repair? Is handling equipment being overloaded? Is there unnecessary transfer of material from one container to another? Are inadequate storage areas hampering efficient scheduling of movement? Is it difficult to analyze the system because there is no detailed flow chart? Are indirect labor costs too high?

Questions to be Resolved in Developing a Material Handling Plan

1. Should automated storage/retrieval systems (AR/RS), computer controlled narrow aisle trucks, manually operated trucks, or some combination be used for palletized storage/retrieval? 2. Should miniloads, automated carousels, manually operated carousels, operator aboard storage/retrieval machines, or come combination be used for storage/retrieval of small parts? 3. Should automated guided vehicles, tow lines, pallet conveyors, tractor-trailer trains, pallet trucks, or some combination be used to deliver loads to/from palletized storage?

4. Should fixed path, variable paths, or some combination be used for material handling to/from/within manufacturing?
5. Should centralized or distributed storage of work-in-process be used? How should it be stored, moved, protected, and controlled?

Questions to be Resolved in Developing a Material Handling Plan (cont.)

6. Should transporter-conveyors, light duty roller conveyors, or carts be used to transport kits and parts to/from assembly stations? Should kitting be performed at all? If so, what issue quantities should be used? 7. Should modular workstations, modular handling systems, and/or modular storage units be used in manufacturing and assembly? 8. Should real-time inventory control be used to shop floor control and storage of raw material/work-in-process/finished goods? What data entry technology is appropriate? 9. Should block stacking, deep-lane storage, mobile rack, double-deep rack, drivein/drive-through rack, selective rack, or some combination be used for pallet storage? 10. Should automatic loading/unloading of trailers be planned for receiving and shipping? If so, when, where, and for what materials?

Top 10 Principles of Material Handling

Principle 1. Planning Principle
All material handling should be the result of a deliberate plan where the needs, performance objectives and functional specification of the proposed methods are completely defined at the outset. The plan should be developed in consultation between the planner(s) and all who will use and benefit from the equipment to be employed.

Principle 2. Standardization Principle

Material handling methods, equipment, controls and software should be standardized within the limits of achieving overall performance objectives and without sacrificing needed flexibility, modularity, and throughput. Standardization means less variety and customization in the methods and equipment employed.

Principle 3. Work Principle

Material handling work should be minimized without sacrificing productivity or the level of service required of the operation.

Top 10 Principles of Material Handling (cont.)

Principle 4. Ergonomic Principle
Human capabilities and limitations must be recognized and respected in the design of material handling tasks and equipment to ensure safe and effective operations. Ergonomics is the science that seeks to adapt work or working conditions to suit the abilities of the worker.

Principle 5. Unit Load Principle

Unit loads shall be appropriately sized and configured in a way which achieves the material flow and inventory objectives at each stage in the supply chain. A unit load is one that can be stored or moved as a single entity at one time, such as pallet, container or tote, regardless of the number of individual items that make up the load.

Principle 6. Space Utilization Principle

Effective and efficient use must be made of all available space. Space in material handling is three dimensional and therefore is counted as cubic space.

Top 10 Principles of Material Handling (cont.)

Principle 7. System Principle
Material movement and storage activities should be fully integrated to form a coordinated, operational system that spans receiving, inspection, storage, production, assembly, packaging, unitizing, order selection, shipping, transportation and the handling of returns.

Principle 8. Automation Principle

Material handling operations should be mechanized and/or automated where feasible to improve operational efficiency, increase responsiveness, improve consistency and predictability, decrease operating costs, and eliminate repetitive or potentially unsafe manual labor.

Principle 9. Environmental Principle

Environmental impact and energy consumption should be considered as criteria when designing or selecting alternative equipment and material handling systems.

Top 10 Principles of Material Handling (cont.)

Principle 10. Life Cycle Cost Principle
A thorough economic analysis should account for the entire life cycle of all material handling equipment and resulting system. Life cycle costs include all cash flows that occur between the time the first dollar is spent to plan or procure a new piece of equipment, or to put in place a new method, until that method and/or equipment is totally replaced. Life cycle costs include capital investment, installation, setup and equipment programming, training, system testing and acceptance, operating (labor, utilities, etc.), maintenance and repair, reuse value, and ultimate disposal.

Facility Layout
A Layout problem may be to
determine the location for a new machine,
develop a new layout for an existing production plant, develop a layout for a new production plant, etc.

A Layout problem may arises due to

changes in the design of a product, addition or deletion of a product, change in the demand of a product,

changes in the design of the process,

addition or deletion of a process, replacement of equipment, etc.

Objectives of Facility Layout

Minimize investment in equipment. Minimize production time. Minimize material handling cost. Maximize utilization of space. Maintain flexibility of arrangement and operation. Provide safety and comfort to employees.

Sequential Approach vs Integrated Approach

Sequential Approach :

Product Design

Process Design

Facility Layout

Material Handling System Design

Production Planning

Sequential Approach vs Integrated Approach

Integrated Approach :
Impressive results in cost, quality, productivity, sales, customer satisfaction, delivery time, inventory levels, space + handling requirements, building size, etc. Process Design Concurrent Engineering Terms of product, process, scheduling and facility design planners work with marketing, purchasing, etc. Personnel address the design process in an integrated way.

Layout Design + Material Handling System Design

Product Design

Schedule Design

Facility Layout Procedures

Naddlers Ideal System Approach (1961)
Immers Basic Steps (1950) Apples Plant Layout Procedure (1977) Reeds Plant Layout Procedure (1961) Muthers Systematic Layout Planning (1961)

Naddlers Ideal System Approach

The ideal system approach is based on the following hierarchical approach toward design:

1. Aim for the theoretical ideal system.

2. Conceptualize the ultimate ideal system. 3. Design the technologically workable ideal system. 4. Install the recommended system.
Theoretical ideal system

Ultimate ideal system

Technologically workable system

Recommended system

Present system

Immers Basic Steps

Immer described the analysis of a layout problem as follows: This analysis should be composed of three simple steps, which can be applied to any type of layout problem. These steps are:
1. Put the problem on the paper.

2. Show lines of flow.

3. Convert flow lines to machine lines.

Apples Plant Layout Procedure

Apple recommended that the following detailed sequence of steps be used in designing a plant layout.
1. Procure the basic data. 2. Analyze the basic data. 3. Design the productive process. 4. Plan the material flow pattern. 6. Calculate equipment requirements. 7. Plan individual work stations. 11. Determine storage requirements 12. Plan service and auxiliary activities. 13. Determine space requirements. 14. Allocate activities to total space. 16. Consider master layouts. 17. Evaluate, adjust and check the layout.

5. Consider the general material handling plan. 15. Consider building type

8. Select specific material handling equipment. 18. Obtain approval.

9. Coordinate groups of related operations.

10. Design activity relationships.

19. Install the layout.

20. Follow up on implementation of the layout.

Reeds Plant Layout Procedure

In planning for and preparing the layout, Reed recommended that the following steps be taken in his systematic plan of attach:
1. Analyze the product to be produced. 2. Determine the process required to manufacture the product.

3. Prepare layout planning charts.

4. Determine work stations. 5. Analyze storage area requirements. 6. Establish minimum aisle widths.

7. Establish office requirements.

8. Consider personnel facilities and services. 9. Survey plant services. 10. Provide for future expansion.

Systematic Layout

Planning Procedure
(Muther 1961)

Information Gathering
Information about product, process and schedule is required.
The major effect of product design decisions is felt by the process designer, i.e., the material used to make a part will influence processing decisions.

Design for automation programs have been developed that consider the impact of the design of the product on the assembly process. Their primary thrusts are (1) dimensional reduction, (2) parts elimination, and (3) parts standardization.For (1), the cost of assembly is reduced if it occurs in a single dimension. The complexity of programming a robot increases geometrically with the number of assembly dimensions.For (2), if more complex parts can be produced, the number of parts can be reduced.
Schedule design decisions tell us how much to produce and when to produce. From the market forecast, the production demand is determined and decisions about the production rate are made.

Information Gathering
Information about product :
- Photographs about the product - Exploded drawings - Engineering drawings of individual parts - Parts list

- Bill of materials (structure of product)

- Assembly chart

Gate Valve

Exploded Drawing of the Gate Valve

Engineering Drawing of the Gate Valve

Provide part specifications and dimensions in sufficient detail for manufacturing

Parts List of the Gate Valve

The parts list provides a listing of the component

parts of a product. In
addition to make or buy decisions, a parts list includes part number, part

name, number of parts per

product, and drawing references

Bill of Materials for the Gate Valve

Bill of materials is also

referred to as a structured
parts list since it includes all of the information typically included in the parts list, as well as information concerning the structure of the product.

Assembly Chart I
It is an analog model of the assembly process. Circles with a single link denote basic components, circles with several links denote assembly operations/subassemblies, and squares represent inspection operations.

Assembly Chart II

Information Gathering
Information about process :
- Route sheet (equipment and operation times) - Precedence Diagram (prerequisite assembly steps before new assembly step) - Operation process chart (processing operations, assembly operations, and inspections)

Route Sheet for one Component of the Gate Valve

Route sheet summarizes

whether a part will be

purchased or produced, how the production of a part will be achieved, what equipment will be used, and how long it take to perform each operation.

Precedence Diagram for Assembling the Gate Valve

A precedence diagram establishes the prerequisite assembly steps that must be completed before performing a given assembly step.

Operations Process Chart

By superimposing the route sheets and the assembly chart, a chart results that gives an overview of the flow within the facility. This chart is the operations process chart.

Information Gathering
Information about schedule :
- Production rate - Product mix - Market forecast (it is better to work with tomorrows data than todays data) - Gantt charts

Gantt Project Planning Chart

Gantt project planning chart indicates the weekly operation schedule, the estimated amount of time a particular operation will take, and the actual amount of time that the particular operation has taken. The following chart shows that the project is 1 week behind schedule.

Schedule Design
Schedule design decisions tell us how much to produce and when to
Market Forecast Production Demand Production Rate Number of Machines

Product Mix + Production Rate

Continuos or Intermittent Production

Production schedules can be given in Gantt charts.