OPERATIONS MANAGEMENT

AGENDA
A. Learning Outcomes
B. Rules of Engagement
C. Discussion of the Lesson
D. Deepening
E. Synthesis
F. Task Analysis
 LEARNING OUTCOMES
At the end of this lesson, the students
should be able to:
 Differentiate the various types of layout.
 Choose the appropriate layout for a
workplace.
 Explain how to achieve a good layout.
 RULES OF ENGAGEMENT
▪ Read the textbook and the assigned
article
▪ Active participation in class
▪ Respect each other
▪ Listen to the person who is sharing
his/her ideas during the class discussion
 TOPICS

FACILITY LAYOUT

 Strategic Importance of Layout Decisions

 Types of Layout
 Assembly-Line Balancing
 THE STRATEGIC IMPORTANCE
OF LAYOUT DECISIONS
1. It determines the long-run efficiency of
operations.
2. It establishes an organization’s competitive
priorities in regard to capacity, processes,
flexibility, and cost, as well as quality of work
life, customer contact, and image.
3. An effective layout can help an organization
achieve a strategy that supports
differentiation, low cost, or response.
 THE MAIN OBJECTIVE
OF LAYOUT STRATEGY

To develop an effective and efficient

layout that will meet the firm’s
competitive requirements.
 Layout design must achieve the
following:
1. Higher utilization of space, equipment,
and people
2. Improved flow of information, materials,
and people
3. Improved employee morale and safer
working conditions
4. Improved customer/ client interaction
5. Flexibility (whatever the layout is now, it
will need to change)
 TYPES OF LAYOUT
1. Office layout: Positions workers, their
equipment, and spaces / offices to
provide for movement of information.
2. Retail layout: Allocates display space
and responds to customer behavior.
3. Warehouse layout: Addresses trade-
offs between space and material
handling.
4. Fixed-position layout: Addresses the
layout requirements of large, bulky
projects such as ships and buildings.
 TYPES OF LAYOUT
5. Process-oriented layout: Deals with
low-volume, high variety production
(also called “job shop’” or intermittent
production)
6. Work-cell layout: Arranges machinery
and equipment to focus on production
of a single product or group of related
products.
7. Product-oriented layout: Seeks the
best personnel and machine utilization in
repetitive or continuous production.
 OFFICE LAYOUT
 It requires the grouping of workers, their
equipment, and spaces to provide for
comfort, safety, and movement of
information.
 The main distinction of office layouts is
the importance placed on the flow of
information.
 OFFICE LAYOUT
Relatonship Chart – also known as
“Muther Grid”
- It was developed by Richard Muther
- a format for displaying manager
preferences for departmental locations
OFFICE RELATIONSHIP CHART: The
Muther Grid for a software firm
 OFFICE LAYOUT
1. Proximity: Spaces should naturally bring
people together
2. Privacy: People must be able to control
access to their conversations
3. Permission: The culture should signal
that non-work interactions are
encouraged
 OFFICE LAYOUT
2 MAJOR TRENDS:
1. Technology (e.g. laptops, gadgets, mobile
phones, tablets, etc) allows increasing
layout flexibility by moving information
electronically and allowing employees to
work offsite.
2. Modern firms create dynamic needs for
space and services.
 RETAIL LAYOUT
 These are layouts based on the idea that
sales and profitability vary directly with
customer exposure to products.
 Retail operations manager try to expose
customers to as many products as
possible.
 The greater the rate of exposure, the
greater the sales and the higher the
return on investment.
 SLOTTING FEES
 These are fees
manufacturers
pay to get shelf
space for their
products.
SERVICESCAPES
 It is a model developed
by Booms and Bitner
that describes the
physical surroundings in
which the service is
delivered and how the
surroundings have a
humanistic effect on
customers and
employees.
3 ELEMENTS OF SERVICESCAPES
1. AMBIENT CONDITIONS
- these are background characteristics
such as lighting, sound, smell, and
temperature.
- all these affect workers and customers
and can affect how much is spent and
how long a person stays in the building.
 3 ELEMENTS OF SERVICESCAPES
1. AMBIENT CONDITIONS
e.g. Fine dining restaurants with
linen tablecloths and candlelit
atmosphere
 3 ELEMENTS OF SERVICESCAPES
2. SPATIAL LAYOUT AND
FUNCTIONALITY
- These involve customer circulation
path planning, aisle characteristics such
as width, direction, angle, and shelf
spacing, and product grouping.
 3 ELEMENTS OF SERVICESCAPES
2. SPATIAL LAYOUT AND
FUNCTIONALITY
e.g. Kroger’s long aisles and high shelves
or Best Buy’s wide center aisle.
 3 ELEMENTS OF SERVICESCAPES
3. SIGNS, SYMBOLS, AND ARTIFACTS
- These are characteristics of building design
that carry social significance such as
carpeted areas of a department store that
encourage shoppers to slow down and
browse.
 3 ELEMENTS OF SERVICESCAPES
3. SIGNS, SYMBOLS, AND ARTIFACTS
e.g. Walmart’s greeter at the door or
Hard Rock Café’s wall of guitars
WAREHOUSE AND STORAGE LAYOUTS

 The objective of warehouse layout

is to find the optimum trade-off
between handling cost and costs
associated with warehouse space.
WAREHOUSE AND STORAGE LAYOUTS

 Effective warehouse layout minimize

the damage and spoilage of material
within the warehouse.
 MATERIAL HANDLING COSTS

 It is defined as all costs

related to the
transaction such as
storage, incoming and
outcoming
transportation of goods.
 These costs include equipment, people,
material, supervision, insurance, and
depreciation.
 CROSS-DOCKING
 It means to avoid placing materials or
supplies in storage by processing them as
they are received.

 Reduces product
handling,
inventory, and
facility costs
CROSS-DOCKING
 RANDOM STOCKING
 Automatic identification systems
(AISs), usually in the form of bar codes,
allow accurate and rapid item
identification.

 Accurate inventory quantities and

locations mean the potential utilization of
the whole facility because space does not
need to be reserved for certain stock-
keeping units (SKUs) or part families.
 COMPUTERIZED RANDOM
STOCKING:
1. Maintaining a list of “open” locations
2. Maintaining accurate records of existing
inventory and its locations
3. Sequencing items to minimize the travel
time required to “pick” orders
4. Combining orders to reduce picking
time
5. Assigning certain items or classes of
items, to particular warehouse areas so
that the total distance traveled within
the warehouse is minimized.
 CUSTOMIZING
 Related items are put together for easy
access
 Customized labeling and packaging for
retailers so that items arrive ready for
display.
 Warehouses are placed adjacent to major
airports for timely delivery.
 FIXED-POSITION LAYOUT
 The project remains
in one place, and
workers and
equipment come to
one work area.

E.g.
a ship, a highway, a bridge, a house, and an
operating table in a hospital operating room
Why fixed-position layout?
1. There is limited space at virtually all
sites
2. At different stages of a project, diffeent
materials are needed; therefore, items
become critical as the project develops
3. The volume of materials needed is
dynamic
PROCESS-ORIENTED LAYOUT
 This type of layout can simultaneously
handle a wide variety of products or
services.
 Typically, low-volume, high-variety strategy
E.g. hospital or clinic, government offices
such as SSS, Pag-ibig, LTO
Why process-oriented layout?
 Flexibility in equipment and labor
assignments
 Breakdown of one machine need not halt
an entire process
 Work can be transferred to other
machines in the department
 Good for handling the manufacture of
parts in small batches, or job lots, and for
the production of a wide variety of parts
in different sizes or forms
 WORK CELLS
 It is an arrangement of machines and
personnel that focuses on making a single
product or family of related products.
 ADVANTAGES OF WORK-CELLS
1. Reduced work-in-process inventory
2. Less floor space
3. Reduced raw material and finished goods
inventories
4. Reduced direct labor cost
5. Heightened sense of employee
participation
6. Increased equipment and machinery
utilization
 ADVANTAGES OF WORK-CELLS
7. Reduced investment in machinery and
equipment
8. Inspection is immediate
9. Fewer workers are needed
10. Workers can reach more of the work
area
11. The work area can be more efficiently
balanced
12. Communication is enhanced
REQUIREMENT OF WORK CELLS
1. Identification of families of products,
often through the use of group
technology codes or equivalents
2. A high level of training, flexibility, and
empowerment of employees
3. Being self-contained, with its own
equipment and resources
4. Testing (poka-yoke) at each station in
the cell
 PRODUCT-ORIENTED LAYOUT
 This type of layout is organized around
products or families of similar high-volume,
low-variety products
 ADVANATAGES OF
PRODUCT-ORIENTED LAYOUT

1. The low variable cost per unit usually

associated with high-volume,
standardized products
2. Low material-handling costs
3. Reduced work-in-process inventories
4. Easier training and supervision
5. Rapid throughput
 DISADVANATAGES OF
PRODUCT-ORIENTED LAYOUT

1. The high volume required because of

the large investment needed to establish
the process
2. Work stoppage at any one point can tie
up the whole operation
3. The process flexibility necessary for a
variety of products and production rates
can be a challenge
ASSEMBLY-LINE BALANCING
 It is usually undertaken to minimize
imbalance between machines or
personnel, while meeting a required
output from the line.
 Management need to know the
precedence relationship among the
activities – that is, the sequence in which
various tasks must be performed.
 CYCLE TIME
 It is the maximum time that a product is
allowed at each workstation.

Cycle time = Production time available per day

Units required per day

Minimum number = Time for task

Of workstations Cycle time
 EFFICIENCY

Efficiency = Task times

(Actual number of workstations) x
(Largest assigned cycle time)

Idle Time = (Actual number of workstations x

Largest assigned cycle time) - Task times
 Layout Heuristics That May Be Used to Assign
Tasks to Workstations in Assembly-Line Balancing

1. Longest task (operation) From the available tasks, choose the task with the largest
time (longest) time.

2. Most following tasks From the available tasks, choose the task with the largest
number of following tasks.

3. Ranked position weight From the available tasks, choose the task for which the
sum of the times for each following task is longest.

4. Shortest task (operations) From the available tasks, choose the task with the
time shortest task time.

5. Least number of following From the available tasks, choose the task with the least
tasks number of subsequent tasks.
 DEEPENING
Make a research on the seven types of
layout by collating the following details of
each type:
1. Description
2. Illustration
3. Factors to consideration in using this
type of layout.
 SYNTHESIS

How does layout affects the

operation of a business?
 TASK ANALYSIS

 In continuation of the vicinity map

project you are currently making to
illustrate your ideal plant location, kindly
incorporate your business’ ideal layout
into your project, by making a floor plan
to illustrate your ideal office/workspace
setup.
Thank you!