Submitted To: Submitted BY:
Prof. Subir Guha Kapil Vardani
PGDM (MKT)
R.NO- 10008
Accman Institute of Management
Acknowledgement Letter
Dear Sir/Madam,
Subject: Project on Inventory Management,
I deeply acknowledge the support of Prof. Subir Guha who initially helped and motivated us to
embark on this strenuous .I would like to give thanks to providing me an opportunity to make
this project.
Name & Title of Authorised Representative:
Signature:
College Name and Address:
Telephone number:
Introduction :
Facility Layout means planning:
a. For the location of all machine, utilities, employees, workstations, customer
service areas, material storage areas, aisles, restrooms, lunchrooms, internet walls,
offices and computer rooms.
b. For the flow of patterns of materials and people around, into, and within building.
c. Infrastructure services such as the delivery of line communications, energy and
water and the removal of waste water all make up basic utilities.
Characteristic of facility layout decision:
a. Location of these various areas impacts the flow through the system.
b. The layout can affect productivity and costs generated by the system.
c. Layout alternatives are limited by
the amount and type of space required for
the various areas.
the amount and type of space available.
the operations strategy.
Objective of layout Strategy:
Develop an economic layout which will meet the requirements of:
a. Product design and volume (product strategy)
b. Process equipment and capacity (process strategy)
c. Quality of work life (human resource strategy)
d. Building and site constraints (location strategy)
Basic layout forms:
a. Process Layout
b. Product Layout
c. Combination Layout
d. Fixed position Layout
Process Layout
Used when the operations system must handle a wide variety of products in
relatively small volumes (i.e., flexibility is necessary).
The layouts include departments or other functional groupings in which similar
kinds of activities are performed.
A manufacturing example of a process layout is the machine shop, which has
separate departments for milling, grinding, drilling, and so on.
Product Layout
Product layout is used to achieve a smooth and rapid flow of large volumes of
products or customers through a system.
For instance, if a portion of a manufacturing operation required the sequence of
cutting, sanding, and painting, the appropriate pieces of equipment would be
arranged in that same sequence.
Combination Layout
It is a type of layout in which a process layout is combined with a product layout.
For instance, supermarket layouts are fundamentally of a process nature, and
however we find most use fixed-path material-handling devices such as roller-
type conveyors both in the stockroom and at checkouts, and belt-type conveyors
at the cash registers.
Fixed-Position layout
In fixed-position layouts, the item being worked on remains stationary, and
workers, materials, and equipment are moved as needed.
Fixed-position layouts are widely used for farming, firefighting, road building,
home building, remodeling and repair, and drilling for oil,buildings, ships,
aircrafts.
Factors in Determining Layout and Design:
Small business owners need to consider many operational factors when building or renovating a
facility for maximum layout effectiveness. These criteria include the following:
1. Ease of future expansion or change —Facilities should be designed so that they
can be easily expanded or adjusted to meet changing production needs. "Although
redesigning a facility is a major, expensive undertaking not to be done lightly, there is
always the possibility that a redesign will be necessary. Therefore, any design should be
flexible.… Flexible manufacturing systems most often are highly automated facilities
having intermediate-volume production of a variety of products. Their goal is to
minimize change over or setup times for producing the different products while still
achieving close to assembly line (single-product) production rates."
2. Flow of movement—The facility design should reflect a recognition of the
importance of smooth process flow. In the case of factory facilities, the plan will show
the raw materials entering your plant at one end and the finished product emerging at the
other. The flow need not be a straight line. Parallel flows, U-shaped patterns, or even a
zig-zag that ends up with the finished product back at the shipping and receiving bays can
be functional. However, backtracking is to be avoided in whatever pattern is chosen.
When parts and materials move against or across the overall flow, personnel and paper
work become confused, parts become lost, and the attainment of coordination becomes
complicated."
3. Materials handling—Small business owners should make certain that the facility
layout makes it possible to handle materials (products, equipment, containers, etc.) In an
orderly, efficient—and preferably simple—manner.
4. Output needs—The facility should be laid out in a way that is conducive to helping
the business meet its production needs.
5. Space utilization—This aspect of facility design includes everything from making
sure that traffic lanes are wide enough to making certain that inventory storage
warehouses or rooms utilize as much vertical space as possible.
6. Shipping and receiving— small business owners to leave ample room for this aspect
of operations. "While space does tend to fill itself up, receiving and shipping rarely get
enough space for the work to be done effectively," it said in How to Run a Small
Business.
7. Ease of communication and support—Facilities should be laid out so that
communication within various areas of the business and interactions with vendors and
customers can be done in an easy and effective manner. Similarly, support areas should
be stationed in areas that help them to serve operating areas.
8. Impact on employee morale and job satisfaction—Since countless studies
have indicated that employee morale has a major impact on productivity. Some ways
layout design can increase morale are obvious, such as providing for light-colored walls,
windows, space. Other ways are less obvious and not directly related to the production
process.
Some examples are including a cafeteria or even a gymnasium in the facility design.
Again, though, there are costs to be traded off. That is, does the increase in morale due to
a cafeteria increase productivity to the extent that the increased productivity covers the
cost of building and staffing the cafeteria."
9. Promotional value—If the business commonly receives visitors in the form of
customers, vendors, investors, etc., the small business owner may want to make sure that
the facility layout is an attractive one that further burnishes the company's reputation.
Design factors that can influence the degree of attractiveness of a facility include not only
the design of the production area itself, but the impact that it has on, for instance, ease of
fulfilling maintenance/cleaning tasks.
10. Safety—The facility layout should enable the business to effectively operate in
accordance with Occupational Safety and Health Association guidelines and other legal
restrictions.
Difference between office and factory Layout
Factory layout
Offices and manufacturing facilities are typically designed in much different ways—a reflection
of the disparate products that the two entities make. "A factory produces things. These things are
moved with conveyors and lift trucks; factory utilities include gas, water, compressed air, waste
disposal, and large amounts of power as well as telephones and computer networks. A layout
criterion is minimization of transportation cost.
However, that the mandate of business offices is to produce information, whether disseminated
in physical (reports, memos, and other documents), electronic (computer files), or oral
(telephone, face-to-face encounters) form. "Office layout criteria, although hard to quantify, are
minimization of communication cost and maximization of employee productivity.
Layout requirements can also differ dramatically by industry
Service oriented :
The needs of service-oriented businesses, for instance, are often predicated on whether
customers receive their services at the physical location of the business (such as at a bank
or pet grooming shop, for instance) or whether the business goes to the customer's home
or place of business to provide the service (as with exterminators, home repair
businesses, plumbing services, etc.) In the latter instances, these businesses will likely
have facility layouts that emphasize storage space for equipment, chemicals, and
paperwork rather than spacious customer waiting areas.
Manufacturer industry:
. Manufacturers may also have significantly different facility layouts, depending on the
unique needs that they have. After all, the production challenges associated with
producing jars of varnish or mountaineering equipment are apt to be considerably
different than those of making truck chassis or foam beach toys.
Retail Industry:
Retail outlets comprise yet another business sector that have unique facility layout needs.
Such establishments typically emphasize sales floor space, inventory logistics, foot traffic
issues, and overall store attractiveness when studying facility layout issues.
Example
One example of facility layout that I have been involved in was to do with check-in desk
allocation in Terminal 3 (usually referred to as T3) at Heathrow airport for British Airports
Authority (BAA), the operators of Heathrow. T3 is used solely for international (mostly long-
haul) flights.
At the time of this study T3 had 134 check-in desks arranged in 5 cul-de-sacs (denoted by A to E
respectively). A diagrammatic representation of the check-in area is given below.
--------------------------------------------------------
xd dxd dxd dxd dxd dx
xd dxd dxd dxd dxd dx
xd dxd dxd dxd dxd dx
xd dxd dxd dxd dxd dx
xd dxd dxd dxd dxd dx
xd A dxd B dxd C dxd D dxd E dx
d is a check-in desk area, x a baggage conveyor area
Cul-de-sac's A and E had 28 check-in desks, cul-de-sacs B, C and D had 26 check-in desks. For
various reasons too complex to explain here the desks were effectively allocated to a single
airline (or handling agent). For example cul-de-sac A was allocated to American Airlines (AA)
and Saudi Airlines (SV). This meant that, even when these airlines had no flights scheduled, the
check-in desks were not available to be used by other airlines.
Now from the airport operators point of view check-in is not where they make money from
passengers, that occurs after they check-in, in the duty-free area, the restaurants and shops. Also
many of the problems of operating an airport come down to managing fixed capacity well. There
are only so many check-in desks, only so many terminals, only so many runways, etc.
The point of this study was to see what could be gained if BAA effectively took control of the
desks and allocated them to airlines on a time basis (the allocation changing every half-hour).
Effectively the flight schedule repeats on a weekly basis so BAA needed an algorithm that would
allocate each of the 134 check-in desks, seven days a week, by half-hour periods.
The key question that needs to be answered before attempting to allocate desks is: How many
desks does each airline actually need? Obviously an airline would like as many desks as possible
- this gives them maximum flexibility and also means their competitors cannot have the desks!
To answer this question logically we need to consider factors like:
flight schedule
size (capacity) of the plane used for each flight
load factor for a flight (percentage full)
arrival pattern for check-in (i.e. the statistical distribution of how passengers turn up for a
flight)
queueing time at check-in.
Airports are data-rich environments and data was not a problem in this study.
The last factor queuing time at check-in is a key one. For example suppose airline X is twice as
quick at processing passengers checking in as airline Y. Does this mean that BAA should
allocate X only half as many desks as Y? To do so would be to penalise efficiency and the
solution adopted was to set a standard for queueing time (the same for all airlines) and to allocate
desks based on this standard. As BAA was only concerned with desk allocation (airlines could
choose to man the desks or not!) airlines which were more efficient than the standard could use
less personnel and/or have shorter queueing times, airlines which were less efficient than the
standard would have longer queueing times.
The algorithmic solution I adopted was a heuristic algorithm which built up a check-in desk
allocation pattern over the course of time. It used a number of rules and restrictions not detailed
here.
The diagram below shows example output from that algorithm for cul-de-sac A (desks A1 to
A28) on day 1 (Monday) over 24 hours at half-hour intervals. Recall that cul-de-sac A was
shared between AA and SV. You will see in the diagram below how the desks are allocated over
time to AA and SV. building up as their flights build up and falling off as their flights fall off.
For example at 5am AA is allocated three desks A1 to A3, at 5.30am there are allocated one
more desk (A4), at 6am three more desks (A5 to A7), etc. Note too how some desks (e.g. desk
A23) are allocated to one than one airline.
HOUR 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
22 23 24
A1 -- -- AA AA AA AA AA AA AA AA AA AA AA AA AA AA AA AA AA AA AA AA
AA AA AA AA -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
A2 -- -- AA AA AA AA AA AA AA AA AA AA AA AA AA AA AA AA AA AA AA AA
AA AA AA -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
A3 -- -- AA AA AA AA AA AA AA AA AA AA AA AA AA AA AA -- -- -- AA AA AA
AA AA -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
A4 -- -- -- AA AA AA AA AA AA AA AA AA AA AA AA AA -- -- -- -- -- AA AA AA -- --
-- -- -- -- -- -- -- -- -- -- -- -- -- -- --
A5 -- -- -- -- AA AA AA AA AA AA AA AA AA AA AA AA -- -- -- -- -- -- AA AA -- -- --
-- -- -- -- -- -- -- -- -- -- -- -- -- --
A6 -- -- -- -- AA AA AA AA AA AA AA AA AA -- AA AA -- -- -- -- -- -- AA AA -- -- -- --
-- -- -- -- -- -- -- -- -- -- -- -- --
A7 -- -- -- -- AA AA AA AA AA AA AA AA -- -- AA AA -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- -- -- --
A8 -- -- -- -- -- AA AA AA AA AA AA AA -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
A9 -- -- -- -- -- AA AA AA AA AA AA AA -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
A10 -- -- -- -- -- AA AA AA AA AA AA AA -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
A11 -- -- -- -- -- AA AA AA AA AA AA AA -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
A12 -- -- -- -- -- AA AA AA AA AA AA AA -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
A13 -- -- -- -- -- AA AA AA AA AA AA -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
-- -- -- -- -- -- --
A14 -- -- -- -- -- -- AA AA AA AA AA -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
-- -- -- -- -- --
A15 -- -- -- -- -- -- AA AA AA AA AA -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
-- -- -- -- -- --
A16 -- -- -- -- -- -- AA AA AA AA AA -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
-- -- -- -- -- --
A17 -- -- -- -- -- -- AA AA AA AA AA -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
-- -- -- -- -- --
A18 -- -- -- -- -- -- AA AA AA AA AA -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
-- -- -- -- -- --
A19 -- -- -- -- -- -- AA AA AA AA AA -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
-- -- -- -- -- --
A20 -- -- -- -- -- -- -- AA AA AA -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- SV -- -- -- -- -- -- --
-- -- -- -- --
A21 -- -- -- -- -- -- -- AA AA AA -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- SV SV SV -- -- -- --
-- -- -- -- -- --
A22 -- -- -- -- -- -- -- AA AA AA -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- SV SV SV SV SV -- --
-- -- -- -- -- -- -- --
A23 -- -- -- -- -- -- -- AA AA AA -- -- -- -- -- -- -- -- -- -- -- -- -- -- SV SV SV SV SV SV SV --
-- -- -- -- -- -- -- -- --
A24 -- -- -- -- -- -- -- -- AA -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- SV SV SV SV SV SV SV -- -- --
-- -- -- -- -- -- --
A25 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- SV SV SV SV SV SV SV SV -- --
-- -- -- -- -- -- --
A26 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- SV SV SV SV SV SV SV SV -- --
-- -- -- -- -- -- --
A27 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
-- --
A28 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
-- --
Note the number of times above above when desks are not allocated to an airline. There is a lot
of spare check-in desk capacity in this cul-de-sac on this day. This could potentially be used for
other airlines. More airlines using T3 means more money for BAA and better use of their fixed
capacity.
Conclusion
Facility layout and design is an important component of a business's overall operations,
both in terms of maximizing the effectiveness of production processes and meeting
employee needs and/or desires. The criteria for a good layout necessarily relate to people
(personnel and customers), materials (raw, finished, and in process), machines, and their
interactions."
