Layout Strategy

1. Layout Strategy

2. Shelf before Category Management (CM) Shelf before CM Shelf before CM before 138 SKU on the shelf

3. Shelf after CM present 99 SKU on shelf(30% reduction), apply the “fair share” Sales of the retailer up 20%

4. Comparison before/after CM before Present

5. Importance of Plant Layout • Substantial Investments • - dollars • - effort • long-term Commitments • Impact on Cost and Efficiency

6. Why Changing Layout Inefficient operations Changes in the design of products or services • High Cost • Bottlenecks Accidents The introduction of newproducts or services Safety hazards

7. Why Changing Layout Changes in environmental or other legal requirements Changes in volume of output or mix of products • Changes in methods • and equipment • Provide flexibility • Provide ease of supervision Morale problems

8. Intermittent Operations • Manufacturing of Products with the following characteristics: • interrupted product flow • Low product volume • Labor intensive operations • Frequent schedule changes • Large product mix • Make-to-order products

9. Difficulties of Intermittent Operations • Each type of output needs a special input • Limited resources (input) • Meeting deadlines with frequent schedule changes • Flexible (multi-job) labor • Flexible manufacturing process

10. Advantages of Intermittent Operations • Its fast reaction to market demand • Ability to produce variety of output • Working on different products results • in higher product quality & productivity • Better maintenance • Increased staff responsibility (multiple jobs)

11. Continuous Operations • Higher product volume • Special purpose equipment • Capital-intensive operations • Uninterrupted product flow • Few schedule changes • Small/no work-in-process inventory

12. Disadvantages of Continuous Operations • Inflexibility to change in demand • Repetitive jobs are less incentive & • creates more mistakes • Line problem stops production • Higher initial investment

13. Advantages of Continuous Operations • Higher volume of production • Lower per unit cost • Lower labor rate (labor cost/volume) • Higher volume of purchase--discounts • Efficient facility utilization • Easier scheduling & simpler managerial jobs

14. Basic Layout Design • Product Layouts • Process Layouts • Fixed-Position • Combination Layouts

15. Kawasaki USA Initial Layouts Assemble Polish Mill Grind Drill M o d e l B M o d e l C M o d e l A Capacity: 2/Hrs 2/Hrs 4/Hrs Workers Efficiency: 67% WIP 4 Months

16. Kawasaki USA Modified Layouts Drill Grind Mill Polish C B A A C B Assemble A A Problem: ? Assemble C B A Assemble A Workers Efficiency: 89% WIP 3 Days

17. Kawasaki USA Current Layouts Polish Mill Assemble B A C A A C Grind Assemble A B B A Drill Assemble C A Workers Efficiency: 100% WIP 2 Days

18. A comparison of Product and Process Layouts Product Layout Process Layout 1. Description Sequential arrangement Functional Grouping of activities of activities of activities 2. Type of process Continuous, Intermittent, job shop, mass production, batch production, mainly assembly mainly fabrication 3. Product Standardized, Varied, made to order made to stock 4. Demand Stable Fluctuating 5. Volume High Low Special purpose 6. Equipment General purpose 7. Workers Limited skills Varied skills

19. A comparison of Product and Process Layouts Product Layout Process Layout 8. Inventory Low in-process, High in-process high finished goods low finished goods 9. Storage space Small Large 10. Material handling Fixed path Variable path (conveyor) (forklift) 11. Scheduling Part of balancing Dynamic Line balancing Machine location 12. Layout decision 13. Goal Equalize work at Minimize material each station handling cost 14. Advantage Efficiency Flexibility

20. 5 Quality Control 4 Painting 1 Stamping/ Folding 2 Sub/ Assembly Movers 3 Engine