2. Operations
Management
LESSON 4 –
LESSON 4 –
Layout Strategies
Layout Strategies
PowerPoint presentation to accompany
PowerPoint presentation to accompany
Heizer/Render
Heizer/Render
Principles of Operations Management, 7e
Principles of Operations Management, 7e
Operations Management, 9e
Operations Management, 9e
3. Innovations at McDonald’s
Innovations at McDonald’s
Indoor seating (1950s)
Indoor seating (1950s)
Drive-thru window (1970s)
Drive-thru window (1970s)
Adding breakfast to the menu (1980s)
Adding breakfast to the menu (1980s)
Adding play areas (late 1980s)
Adding play areas (late 1980s)
Redesign of the kitchens (1990s)
Redesign of the kitchens (1990s)
Self-service kiosk (2004)
Self-service kiosk (2004)
Now three separate dining sections
Now three separate dining sections
4. Innovations at McDonald’s
Innovations at McDonald’s
Indoor seating (1950s)
Indoor seating (1950s)
Drive-through window (1970s)
Drive-through window (1970s)
Adding breakfast to the menu (1980s)
Adding breakfast to the menu (1980s)
Adding play areas (late 1980s)
Adding play areas (late 1980s)
Redesign of the kitchens (1990s)
Redesign of the kitchens (1990s)
Self-service kiosk (2004)
Self-service kiosk (2004)
Now three separate dining sections
Now three separate dining sections
Six out of the
Six out of the
seven are layout
seven are layout
decisions!
decisions!
5. McDonald’s New Layout
McDonald’s New Layout
Seventh major innovation
Redesigning all 38,000 outlets in over
100 countries.
Three separate dining areas
Linger zone with comfortable chairs and
Wi-Fi connections
Grab and go zone with tall counters
Flexible zone for kids and families
Facility layout is a source of
competitive advantage
P3
6. Strategic Importance of
Strategic Importance of
Layout Decisions
Layout Decisions
The objective of layout strategy is to
The objective of layout strategy is to
develop a cost-effective layout that
develop a cost-effective layout that
will meet a firm’s competitive needs
will meet a firm’s competitive needs
7. Good Layouts Considerations
Good Layouts Considerations
1.
1. Material handling equipment
Material handling equipment
2.
2. Capacity and space requirements
Capacity and space requirements
3.
3. Environment and aesthetics
Environment and aesthetics
4.
4. Flows of information
Flows of information
5.
5. Cost of moving between various
Cost of moving between various
work areas
work areas
9. 1. Office Layout
1. Office Layout
Grouping of workers, their equipment,
Grouping of workers, their equipment,
and spaces to provide comfort, safety,
and spaces to provide comfort, safety,
and movement of information.
and movement of information.
11. 2. Retail Layout
2. Retail Layout
Allocates shelf space and responds
Allocates shelf space and responds
to customer behavior
to customer behavior
Objective is to maximize
Objective is to maximize
profitability per square foot of floor
profitability per square foot of floor
space
space
Sales and profitability vary directly
Sales and profitability vary directly
with customer exposure
with customer exposure
13. Retail Slotting
Retail Slotting
Manufacturers pay fees to retailers to
Manufacturers pay fees to retailers to
get the retailers to display (slot) their
get the retailers to display (slot) their
product
product
14. Retail Store Shelf Space
Retail Store Shelf Space
Planogram
Planogram
Computerized tool
Computerized tool
for shelf-space
for shelf-space
management
management
Generated from
Generated from
store’s scanner
store’s scanner
data on sales
data on sales
Often supplied by
Often supplied by
manufacturer
manufacturer
5 facings
5 facings
Shampoo
Shampoo
Shampoo
Shampoo
Shampoo
Conditioner
Conditioner
Shampoo
Shampoo
Shampoo
Shampoo
Conditioner
2 ft.
2 ft.
15. Servicescapes
Servicescapes
Ambient conditions - background
Ambient conditions - background
characteristics such as lighting, sound,
characteristics such as lighting, sound,
smell, and temperature
smell, and temperature
Spatial layout and functionality - which
Spatial layout and functionality - which
involve customer
involve customer
circulation path planning,
circulation path planning,
aisle characteristics, and
aisle characteristics, and
product grouping
product grouping
Signs, symbols, and
Signs, symbols, and
artifacts - characteristics
artifacts - characteristics
of building design that
of building design that
carry social significance.
carry social significance.
16. 3. Warehouse Layout
3. Warehouse Layout
Objective is to optimize trade-offs
Objective is to optimize trade-offs
between handling costs and costs
between handling costs and costs
associated with warehouse space
associated with warehouse space
Maximize the total “cube” of the
Maximize the total “cube” of the
warehouse – utilize its full volume
warehouse – utilize its full volume
while maintaining low material
while maintaining low material
handling costs
handling costs
17. Shipping and receiving docks
Office
Customization
Conveyor
Storage racks
Staging
Warehouse Layout.
Warehouse Layout.
Traditional Layout
Traditional Layout
18. Warehouse Layouts
Warehouse Layouts
Warehouse density tends to vary inversely
Warehouse density tends to vary inversely
with the number of different items stored
with the number of different items stored
Automated Storage and
Automated Storage and
Retrieval Systems (ASRSs)
Retrieval Systems (ASRSs)
can significantly improve
can significantly improve
warehouse productivity by
warehouse productivity by
an estimated 500%
an estimated 500%
Dock location is a key
Dock location is a key
design element
design element
19. Cross-Docking
Cross-Docking
Materials are moved directly from
Materials are moved directly from
receiving to shipping and are not placed
receiving to shipping and are not placed
in storage
in storage
in the warehouse
in the warehouse
Requires tight
Requires tight
scheduling and
scheduling and
accurate shipments,
accurate shipments,
bar code or RFID
bar code or RFID
identification used for
identification used for
advanced shipment
advanced shipment
notification as materials
notification as materials
are unloaded.
are unloaded.
21. Customizing
Customizing
Value-added activities performed at the
Value-added activities performed at the
warehouse
warehouse
Enable low cost and rapid response
Enable low cost and rapid response
strategies
strategies
22. 4. Fixed-position layout
4. Fixed-position layout
Addresses the layout requirements of
Addresses the layout requirements of
large, bulky projects such as ships and
large, bulky projects such as ships and
buildings.
buildings.
23. Fixed-Position Layout
Fixed-Position Layout
Product remains in one place
Product remains in one place
Workers and equipment come to site
Workers and equipment come to site
Complicating factors
Complicating factors
Limited space at site
Limited space at site
Different materials
Different materials
required at different
required at different
stages of the project
stages of the project
Volume of materials
Volume of materials
needed is dynamic.
needed is dynamic.
24. Alternative Strategy
Alternative Strategy
As much of the project as possible is
As much of the project as possible is
completed off-site in a product-oriented
completed off-site in a product-oriented
facility
facility
This can
This can
significantly
significantly
improve efficiency
improve efficiency
but is only
but is only
possible when
possible when
multiple similar
multiple similar
units need to be created.
units need to be created.
25. 5.Process-Oriented Layout
5.Process-Oriented Layout
Arrange work centers so as to minimize
Arrange work centers so as to minimize
the costs of material handling
the costs of material handling
Deals with low-volume, high-variety
Deals with low-volume, high-variety
production (also called job shop or
production (also called job shop or
intermittent production)
intermittent production)
Basic cost elements are
Basic cost elements are
Number of loads (or people) moving
Number of loads (or people) moving
between centers
between centers
Distance loads (or people) move
Distance loads (or people) move
between centers.
between centers.
26. Process-Oriented Layout
Process-Oriented Layout
Like machines and equipment are
Like machines and equipment are
grouped together
grouped together
Flexible and capable of handling a
Flexible and capable of handling a
wide variety of products or services
wide variety of products or services
Scheduling can be difficult and setup,
Scheduling can be difficult and setup,
material handling, and labor costs
material handling, and labor costs
can be high.
can be high.
28. Layout at Arnold Palmer Hospital.
Layout at Arnold Palmer Hospital.
Central break and
Central break and
medical supply
medical supply
rooms
rooms
Local linen
Local linen
supply
supply
Local nursing
Local nursing
pod
pod
Pie-shaped
Pie-shaped
rooms
rooms
Central nurses
Central nurses
station
station
29. 6. Work cell layout:
6. Work cell layout:
Arranges machinery and equipment to
Arranges machinery and equipment to
focus on production of a single product
focus on production of a single product
or group of related products
or group of related products
30. Work Cells
Work Cells
Reorganizes people and machines
Reorganizes people and machines
into groups to focus on single products
into groups to focus on single products
or product groups
or product groups
Group technology identifies products
Group technology identifies products
that have similar characteristics for
that have similar characteristics for
particular cells
particular cells
Volume must justify cells
Volume must justify cells
Cells can be reconfigured as designs
Cells can be reconfigured as designs
or volume changes.
or volume changes.
31. Current layout - workers in
Current layout - workers in
small closed areas. Cannot
small closed areas. Cannot
increase output without a
increase output without a
third worker and third set of
third worker and third set of
equipment.
equipment. Improved layout - cross-trained
Improved layout - cross-trained
workers can assist each other. May
workers can assist each other. May
be able to add a third worker as
be able to add a third worker as
additional output is needed.
additional output is needed.
Figure 9.10 (a)
Figure 9.10 (a)
32. Current layout - straight lines
Current layout - straight lines
make it hard to balance tasks
make it hard to balance tasks
because work may not be
because work may not be
divided evenly
divided evenly
Improved layout - in U shape,
Improved layout - in U shape,
workers have better access.
workers have better access.
Four cross-trained workers
Four cross-trained workers
were reduced.
were reduced.
Figure 9.10 (b)
Figure 9.10 (b)
U-shaped line may reduce employee movement
and space requirements while enhancing
communication, reducing the number of workers,
and facilitating inspection
33. Focused Work Center and
Focused Work Center and
Focused Factory
Focused Factory
Focused Work Center
Focused Work Center
Identify a large family of similar products that have a
Identify a large family of similar products that have a
large and stable demand
large and stable demand
Moves production from a general-purpose, process-
Moves production from a general-purpose, process-
oriented facility to a large work cell
oriented facility to a large work cell
Focused Factory
Focused Factory
A focused work cell in a separate facility
A focused work cell in a separate facility
May be focused by product line, layout, quality, new
May be focused by product line, layout, quality, new
product introduction, flexibility, or other requirements
product introduction, flexibility, or other requirements
34. 7. Product-oriented layout:
7. Product-oriented layout:
Seeks the best personnel and machine
Seeks the best personnel and machine
utilizations in repetitive or continuous
utilizations in repetitive or continuous
production
production
36. Disassembly Lines
Disassembly Lines
Disassembly is being considered in new product
designs
“Green” issues and recycling standards are
important consideration
Automotive
disassembly is
the 16th
largest
industry in
the US
37. Assembly-Line Balancing
Assembly-Line Balancing
Objective is to minimize the imbalance
Objective is to minimize the imbalance
between machines or personnel while
between machines or personnel while
meeting required output
meeting required output
Starts with the precedence relationships
Starts with the precedence relationships
1.
1. Determine cycle time
Determine cycle time
2.
2. Calculate theoretical
Calculate theoretical
minimum number of
minimum number of
workstations
workstations
3.
3. Balance the line by
Balance the line by
assigning specific
assigning specific
tasks to workstations
tasks to workstations
38. A restaurant complex with all four basic
layout types.
Fixed-position layout
service restaurant
Cell layout buffet
Line layout cafeteria
Cool room
Freezer Vegetable prep Grill
Preparation
Oven
Process layout kitchen
Main course
buffet
Starter
buffet
Desert
buffet
Service line
