FACILITY AND WORK DESIGN

1. OM2 CHAPTER 8 FACILITY AND WORK DESIGN DAVID A. COLLIER AND JAMES R. EVANS

2. Chapter 8 Learning Outcomes l e a r n i n g o u t c o m e s LO1Describe four layout patterns and when they should be used. LO2Explain how to design product layouts using assembly line balancing. LO3Explain the concepts of process layout. LO4Describe issues related to workplace design. LO5Describe the human issues related to workplace design.

3. Chapter 8 Facility and Work Design rofessor Frey had just taken his operations management class on a tour of Honda’s automobile plant in Marysville, Ohio. During the tour, the students had a chance to see how the facility design helped to improve the efficiency of the assembly processes for the automobilesand motorcycles they manufacture. The students were also very impressed with the level of teamwork among the employees. In the following class debriefing, Steve stated that he didn’t realize how important the design of the facility was in promoting teamwork and assuring quality. Arun couldn’t believe that they could produce so many different models in any order on the same assembly lines. Kate observed that the entire facility shows an image of safety, efficiency, professionalism, cleanliness, quality, and excitement. “In the factory, everything has its correct place. The workers know where everything is. The facility is spotless, a lot different from my dad’s machine shop.” Without hesitation she said, “Wow, I think I’ll buy a Honda!” What do you think? Think of a facility in which you have conducted business – for instance, a restaurant, bank, or automobile dealership. How did the physical environment and layout enhance or degrade your customer experience?

4. Chapter 8 Facility and Work Design • Facility layout refers to the specific arrangement of physical facilities. Facility-layout studies are necessary whenever: • a new facility is constructed, • there is a significant change in demand or throughput volume, • a new good or service is introduced to the customer benefit package, or • different processes, equipment, and/or technology are installed.

5. Chapter 8 Facility and Work Design • Purposes of layout studies are to: • minimize delays in materials handling and customer movement • maintain flexibility • use labor and space effectively • promote high employee morale and customer satisfaction • provide for good housekeeping and maintenance • enhance sales as appropriate in manufacturing and service facilities

6. Chapter 8 Facility and Work Design • Other Facility Layout Issues • Essentially, a good layout should support the ability of operations to accomplish its mission. • If the facility layout is flawed in some way, process efficiency and effectiveness suffers. • In manufacturing, facility layout is generally unique, and changes can be accomplished without much difficulty.

7. Chapter 8 Facility and Work Design • Other Facility Layout Issues • For service firms, however, the facility layout is often duplicated in hundreds or thousands of sites. This makes it extremely important that the layout be designed properly, as changes can be extremely costly. • Also see Supply Chain Design for Multisite Services in Chapter 9.

8. Chapter 8 Facility and Work Design • Types of Facility Layouts • A product layout is an arrangement based on the sequence of operations that are performed during the manufacturing of a good or delivery of a service. • Examples: winemaking industry, credit card processing, Subway sandwich shops, paper manufacturers, insurance policy processing, and automobile assembly lines.

9. Chapter 8 Facility and Work Design • Types of Facility Layouts • Product Layout • Advantages of product layouts include lower work-in-process inventories, shorter processing times, less material handling, lower labor skills, and simple planning and control systems. • Disadvantages include that a breakdown at one workstation can cause the entire process to shut down; a change in product design or the introduction of new products may require major changes in the layout, limiting flexibility.

10. Exhibit 8.1 Product Layout for Wine Manufacturer

11. Chapter 8 Facility and Work Design • Types of Facility Layouts • A process layout consists of a functional grouping of equipment or activities that do similar work. • Examples: legal offices, shoe manufacturing, jet engine turbine blades, and hospitals use a process layout.

12. Chapter 8 Facility and Work Design • Types of Facility Layouts • Process Layout • Advantages of process layouts include a lower investment in equipment, and the diversity of jobs inherent in a process layout can lead to increased worker satisfaction. • Disadvantages include high movement and transportation costs, more complicated planning and control systems, longer total processing time, higher in-process inventory or waiting time, and higher worker-skill requirements.

13. Exhibit 8.2 Process Layout for a Machine Shop

14. Chapter 8 Facility and Work Design • Cellular Layout • In a cellular layout the design is not according to the functional characteristics of equipment, but rather by self-contained groups of equipment (called cells), needed for producing a particular set of goods or services. • Group technology, or cellular manufacturing, classifies parts into families so that efficient mass-production-type layouts can be designed for the families of goods or services.

15. Chapter 8 Facility and Work Design • Cellular Layout • Cellular layouts are used to centralize people expertise and equipment capability. • Examples: groups of different equipment (called cells) needed for producing families of goods or services, group legal (labor law, bankruptcy, divorce, etc.), or medical specialties (maternity, oncology, surgery, etc.).

16. Exhibit 8.3 Cellular Manufacturing Layout Source: J. T. Black, “Cellular Manufacturing Systems Reduce Set Up time, Make Small-Lot Production Economical,” Industrial Engineering Magazine, Nov. 1983. Used with permission from the author.

17. Chapter 8 Facility and Work Design • A fixed-position layout consolidates the resources necessary to manufacture a good or deliver a service, such as people, materials, and equipment, in one physical location. • The production of large items such as heavy machine tools, airplanes, buildings, locomotives, and ships is usually accomplished in a fixed-position layout. Fixed-Position Layout

18. Chapter 8 Facility and Work Design • Fixed-Position Layout • This fixed-position layout is synonymous with the "project" classification of processes presented in Chapter 7. • Service-providing firms also use fixed-position layouts; examples include major hardware and software installations, sporting events, and concerts.

19. Exhibit 8.4 Comparison of Basic Layout Patterns

20. Chapter 8 Facility and Work Design Facility Design in Service Organizations Service organizations use product, process, cellular, and fixed-position layouts to organize different types of work. Process Layout Examples Libraries place reference materials, serials, and microfilms into separate areas; hospitals group services by function also, such as maternity, oncology, surgery, and X-ray; and insurance companies have office layouts in which claims, underwriting, and filing are individual departments.

21. Chapter 8 Facility and Work Design Facility Design in Service Organizations Product Layout Examples Service organizations that provide highly standardized services tend to use product layouts. For example, Exhibit 8.5 shows the layout of the kitchen at a small pizza restaurant that has both dine-in and delivery. Lenscrafters Uses Both Process and Product Layouts In Exhibit 6.10, we saw the customer contact area arranged in a process layout. In the lab area, however, where lenses are manufactured, a group layout is used.

22. Exhibit 8.5 Product Layout for a Pizza Kitchen

23. Chapter 8 Facility and Work Design • Designing Product Layouts • Flow-blocking delay occurs when a work center completes a unit but cannot release it because the in-process storage at the next stage is full. The worker must remain idle until storage space becomes available. • Lack-of-work delayoccurs whenever one stage completes work and no units from the previous stage are awaiting processing.

24. Exhibit 8.6 A Typical Manufacturing Workstation Layout

25. Chapter 8 Facility and Work Design • Assembly-Line Balancing • An assembly line isa product layout dedicated to combining the components of a good or service that has been created previously. • Assembly line balancing is a technique to group tasks among workstations so that each workstation has—in the ideal case—the same amount of work. • Examples: winemaking industry, credit card processing, Subway sandwich shops, paper manufacturers, insurance policy processing, and automobile assembly lines.

26. Assembly-Line Balancing To begin, we need to know three types of information to balance an assembly line: the set of tasks to be performed and the time required to perform each task, 2. the precedence relations among the tasks—that is, the sequence in which tasks must be performed, and 3. the desired output rate or forecast of demand for the assembly line. Chapter 8 Facility and Work Design

27. Exhibit 8.7 A Three-Task Assembly Line

28. Cycle timeis the interval between successive outputs coming off the assembly line. In the three-operation example shown in Exhibit 8.7, if we use only one workstation, the cycle time is 1 minute; that is, one completed assembly is produced every minute. If two workstations are used, the cycle time is 0.5 minute/unit. If three workstations are used, the cycle time is still 0.5 minute/unit, because task A is the bottleneck, or slowest operation. The line can produce only one assembly every 0.5 minute. Chapter 8 Facility and Work Design

29. Cycle time (CT) is related to the output (R) by the following equation: CT = A/R [8.2] A = available time to produce the output. The output (R) is normally the demand forecast in units, adjusted for on-hand inventory if appropriate, or orders released to the factory. Both A and R must have the same time units of measure (hour, day, week, month, and so on). Chapter 8 Facility and Work Design

30. Chapter 8 Facility and Work Design Minimum number of workstations required = Sum of task times/Cycle time = t/CT [8.3] Total Time Available = (Number of work stations)(Cycle Time) = (N)(CT) [8.4] Total Idle Time = (N)(CT) − t [8.5] Assembly Line Efficiency = t/(N)(CT) [8.6] Balance Delay = 1 − Assembly Line Efficiency [8.7]

31. Exhibit 8.8 A Typical In-Line Skate

32. Exhibit 8.9 Precedence Network for In-Line Skate

33. Chapter 8 Facility and Work Design Assembly Line Balance for In-Line Skate WorkstationTasks Total TimeIdle Time A 1, 2, 5 5.7 0.3 B 3, 4, 6, 7, 8 3.7 2.3 Total 9.4 2.6 Using equations [8.4] to [8.6] we may compute the following: Total Time Available = (Number workstations)(Cycle Time) = (N)(CT) = (2)(6) = 12 minutes Total Idle Time = (N)(CT) − t = (2)(6) - 9.4 = 2.6 minutes Assembly Line Efficiency =  t/(N)(CT) = 9.4/(2)(6) = 78.3%

34. Chapter 8 Facility and Work Design CycleTimes Respond to Economic Cycles With the global economic crisis, demand for automobiles has fallen. As a result, automobile manufacturers have needed to reduce production. One way to do this is to change the cycle time for their auto assembly plants. For example, General Motors announced that the factory making the Chevrolet Silverado and GMC Sierra pickup trucks will operate only one shift and change its line speed from 55 to 24 trucks per hour. “We don’t need excess inventory out there,” GM spokesman Chris Lee said. “We adjust up and down to the market.”

35. Chapter 8 Facility and Work Design • Workplace Design • Example questions that must be addressed at the workstation level include: • Who will use the workplace? Will the workstation be shared? How much space is required? • How will the work be performed? What tasks are required? How much time does each task take? How much time is required to setup for the workday or for a particular job? How might the tasks be grouped into work activities most effectively?

36. What technology is needed? Employees may need a computer or access to customer records and files, special equipment, intercoms, and other forms of technology. What must the employee be able to see? What must the employee be able to hear? What environmental and safety issues need to be addressed? Chapter 8 Facility and Work Design

37. Exhibit 8.10 Pizza Preparation Workplace Design

38. Ergonomicsis concerned with improving productivity and safety by designing workplaces, equipment, instruments, computers, workstations, and so on that take into account the physical capabilities of people. A job is the set of tasks an individual performs. Job design involves determining the specific job tasks and responsibilities, the work environment, and the methods by which the tasks will be carried out to meet the goals of operations. Chapter 8 Facility and Work Design

39. Job enlargementis the horizontal expansion of the job to give the worker more variety—although not necessarily more responsibility. Job enrichmentis vertical expansion of job duties to give the worker more responsibility. A team is a small number of people with complementary skills who are committed to a common purpose, set of performance goals, and approach for which they hold themselves mutually accountable. Chapter 8 Facility and Work Design

40. Virtual Workplaces About two-thirds of the U.S. workforce collects, organizes, analyses, and disseminates information. Physical assets, such as paper and offices, are being replaced by virtual projects, offices, and workplaces. Check out Officescape: (www.officescape.com). Chapter 8 Workplace Design

41. Exhibit 8.11 Precedence Diagram for Problem 8

42. Exhibit 8.12 Precedence Diagram for Problem 10

43. BankUSA: Cash Movement Case Study What is the best way to group the work represented by the 16 work groups for an average demand of 306 outgoing wires per day? What is your line balance if peak demand is 450 wires per day? What is assembly-line efficiency for each line balance solution? How many people are needed for outgoing wires using assembly line balancing methods versus the current staffing level of 11 full-time equivalent employees? How many staff members do you need for the outgoing wire process if you eliminate all rework? What are your final recommendations? Chapter 8 Facility and Work Design