fp planning 1

8/3/2019 FP Planning 1

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OP02 - Facilities Planning

Prof. A. D. Raoot, NITIE


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What is a facility?

Organization, part of supply chain,remain competitive in global market

Something that facilitates an action or

a process Something created to serve a

particular function

Dynamic entity flexible andadaptable to changed requirements

Achieve supply chain excellence


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Supply Chain Excellence

Business as usual

Link excellence

Visibility Collaboration

Synthesis

Velocity


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Business as Usual- Organization works hard to maximize individual functions- Each function tries to perform well within its individual silo

Link Excellence- Remove functional boundaries- Process orientation- Begin journey of continuous improvement

Visibility

- Organizations need to work together- Visibility minimizes supply chain surprises- Provides information links needed to understand ongoing order status


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Collaboration- SC works as a whole to maximize customer satisfaction &minimize inventory.

- Collaboration is achieved through application of technology and

true partnership.

Synthesis- Unification of supply chain to form a whole, which creates acomplete pipe line from customer perspective

- Results of synthesis : Increased ROA, Increased customersatisfaction, Reduced cost, an integrated SC

Velocity- Business environment demands speed


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Facilities critical components of multilevel networks for supply chainexcellence

Each organization in supply chain should plan facilities with theirsupply chain partners in mind

Facilities in SC with following characteristics:1. Flexibility Handle variety of requirements

2. Modularity Cooperate efficiently over wide range of operatingrates

3. Upgradability Incorporate advances in equipments and technology

4. Adaptability Accommodate changes in facility usage

5. Selective Operability Understanding how each facility segmentworks and allows contingency plans to be put in place


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Definition of Facility Planning

Facility Planning determines how an activitystangible fixed assets best support achieving theactivitys objectives.

Examples:

a. In manufacturing, the objective is to support production. b. In an airport, the objective is to support the passenger

airplane interface.

c. In a hospital, the objective is to provide medical care topatients.

Continuous Improvement for Supply ChainExcellence must be an integral element ofFacilities Planning cycle


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Hierarchy of Facility Planning

Location: is the placement of a facility withrespect to customers, suppliers, and otherfacilities with which it interfaces.

Structure: consists of the building and services(e.g., gas, water, power, heat, light, air, sewage).

Layout: consists of all equipment, machinery,and furnishings within the structure.

Handling System: consists of the mechanismby which all interactions required by the layoutare satisfied (e.g., materials, personnel,

information, and equipment handling systems).


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Facility Planning

The capital investment in land, buildings,technology, and machinery is enormous

A firm must live with its facility planningdecisions for a long time, and thesedecisions affect: Operating efficiency

Economy of scale Ease of scheduling

Maintenance costs

Profitability!


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Importance of Facilities Planning

Majority of an organization's capital investment is infacilities - 8% of GNP spent annually on facilities

1999: $320 billion on structures ($297 billion on newstructures) Single most important cause of high material

handling costs : lack of strategic facilities planning

Material handling accounts for 20 - 50% ofoperating costs in manufacturing Effective material handling can reduce costs by

10 -30%


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Facility Planning

HOW MUCH long range capacity is needed

WHEN additional capacity is needed

WHERE the production facilities should belocated

WHAT the layout and characteristics of thefacilities should be


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WHY PLAN FACILITIES?

Expanding production/ services

Replacement of obsolete/ inadequate facilities

Relocation of facilities

Business Process Reengineering

Economic considerations force constantreevaluation and reorganization of existing

facilities, systems, equipments and personnel Employee health, safety, environmental factors,

community considerations


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PHYSICAL COMPONENTS

OF FACILITIES BUILDING : Structures which house the facilities

LAYOUT : Physical arrangement of the facilties

MATERIALS HANDLING : Way materials are moved withinthe facilities

COMMUNICATIONS : Systems that transmit information

UTILITIES : Distribution of heat, light , power, waste etc.

RELATIVE IMPORTANCE OF EACH COMPONENT VARIESFROM ONE FACILITY TO ANOTHER


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PLANNING FUNDAMENTALS

BUILDINGS : Form, Materials, Design

LAYOUT : Relationships, Space, Adustments

MATERIALS HANDLING : Materials, Move, Methods

COMMUNICATION : Information, Transmission, Means

UTILITIES : Substances, Distribution, Conductors

INTEGRATIONof PHYSICAL COMPONENTSand FUNDAMENTALSis basic to developingEFFECTIVE FACILITY PLANS.


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Engineering Design Process

Typically, design problems do not have well-defined, unique, optimum solutions.

General Procedure for Solving Engineering

Design Problems1. Formulate the problem.

2. Analyze the problem.

3. Search for alternative solutions.4. Evaluate the design alternatives.

5. Select the preferred design.

6. Implement the design.


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Facilities Planning Process

ProblemSymptoms

New

Needs

1. ProblemDefinition

2. Analysis

3. Synthesis

4. Evaluation

Design 1 Design 2 Design n

5. Selection 6. Implementation


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Application of the EngineeringDesign Process to Facility Planning1. Define (or redefine) the objective of the facility:

Specify quantitatively the products to be producedor service to be provided.

2. Specify the primary and support activities to beperformed in accomplishing the objective:Requirements for primary activities includeoperations, equipment, personnel, and materialflows.

3. Determine the interrelationships among all activities:

Both qualitative and quantitative relationshipsshould be defined.4. Determine the space requirements for all activities:

These are determined considering the equipment,materials, and personnel requirements.


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Application of the EngineeringDesign Process to Facility Planning5. Generate alternative facility plans:

Including alternative facility locations andalternative designs for the facility.

6. Evaluate alternative facility plans:Determine the important factors .For eachcandidate plan, evaluate if and how thosefactors will affect the facility and its operations.

7. Select a facility plan:Cost may not be the only major consideration.

Pair wise comparison is a good rankingprocedure.


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Application of the EngineeringDesign Process to Facility Planning

8. Implement the facility plan:

Considerable amount of planning must precede theconstruction of a facility or the layout of an area.

9. Maintain and adapt the facility plan:The facility plan must be modified as newrequirements are placed, e.g., new energy savingmeasures, changes in product design may require

different flow pattern or handling equipment, etc.10. Redefine the objective of the facility:

Changes in product design and/or quantitiesmay require changes into the layout plan.


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Cost of Design Change

Planning Designing Building Installing Commissioning

Amount ($)


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Important Factors to

Evaluate Facility PlansIn developing well-thought facilities design

alternatives it is important to look into issuessuch as:a) Layout characteristics

- total distance traveled, manufacturing floorvisibility, overall aesthetics of the layout, ease ofadding future businessb) Material handling requirements

- use for the current material handlingequipment, investment requirements on newequipment, space and people requirements


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Important Factors to

Evaluate Facility Plansc) Unit load implied

- impact on WIP levels, space requirements,impact on material handling equipment

d) Storage strategies- space and people requirements, impact on

material handling equipment, human factorsrisks

e) Overall building impact- estimated cost of the alternatives,

opportunities for new business


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Strategies for Facility Planning


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Business Strategy

The art and science of employing the resourcesof a firm to achieve its business objectives.

Resources:

Marketing Resources

Manufacturing ResourcesDistribution Resources.


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Strategic Facilities Plan

Facilities requirements to support thereceipt, storage, manufacture, assemblyand distribution of products

Layout of manufacturing facility, storageand warehouses

Materials handling at site, including to,

from and within manufacturing


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LEVELS OF FACILITIES PLANNING

CAPACITY : Rate of output, make or buy,amount of space, own or lease

LOCATIONS : Number of sites, geographiclocations

SITES : Access, traffic patterns, future growth

BUILDING : Size, orientation, type of structure

DEPARTMENTS : Effective use of space,

flexibility WORK AREAS : Individual work space

productivity

IMPLEMENTATION : Budget, sequencing time


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Facility Strategies

Facility Planning

To determine how the firms resources (fixed asset)

best support achieving the business objectives.

Interacts directly with Marketing Strategies.

Manufacturing Strategies

Distribution Strategies.


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Marketing decisions

Unit volume

Product Mix

Packaging

Service level

Affect:

Location of facilities

Handling system design


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Product decisions

Materials

Processing methods

Component shapes

Product complexity Package sizes, stability of product design

Affects Layout Handling


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Manufacturing

Vertical Integration

Type and level of automation

General purpose/Specialized equipment

Affects

location

Design of facilities


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Production Planning andInventory Control

Lot size

Schedule

In-process inventory

In-process turnover

Affect

facilities design

Handling


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Human resources and finance

Capital availability

Labor skill and stability

Staffing level

Employee service and benefits

Affect

Size and design of facilities

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Strategic Facilities PlanningIssues

1. Number, location, and sizes of warehousesand/or distribution centers.

2. Centralized versus decentralized storagesupplies, raw materials, work-in-process, and

finished goods for single- and multi-building sites,as well as single- and multi-site companies.

3. Acquisition of existing facilities versus designof model factories and distribution centers of thefuture.

4. Flexibility required because of market andtechnological uncertainties.

5. Interface between storage and manufacturing

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Strategic Facilities PlanningIssues

6. Level of vertical integration, including

"subcontract versus manufacture" decisions.

7. Control systems, including materials control andequipment control.

8. Movement of materials between buildings,between sites.

9. Changes in customers' and suppliers' technologyas well as firm's own manufacturing technology

and materials handling, storage, and controltechnology.

10. Design-to-cost goals for facilities.


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Strategic Facilities Plan

Strategic facilities plan facilities acquisition,new construction, integration and improvementof operations of exiting facilities.

Overall plan must support manufacturing,distribution, and marketing plans and includefunctions receiving, inspection, storage,production, assembly, maintenance, WIP,

materials control, packaging, warehousing, anddispatching.


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Strategic facilities Plan

Strategic facilities plan input requiredfrom marketing, product development,product design, process design,

production planning & control, utilities,maintenance, quality control, purchasing,inventory control, packaging, warehousing,

distribution, personnel requirements,information systems and management.


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S P I F Planning Model INVESTIGATE inputs and influences and clarify

parameters

INTERACT major elements and establishconceptual plan for the lead component

INTEGRATE conceptual plan of lead componentinto plans for each component and developpreliminary plans

MODIFY preliminary plans into specificalternative plans

EVALUATE alternatives and select a plan


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FACILITIES PLANNING PHASES ORIENTATIONLocation of the area to be plannedExternal handling integrationExternal communications/ controls tie-in

External utilities/ auxiliary accessSite characteristics

OVERALL PLANOverall (block) layout

Overall handling planOverall communication planOverall utilities planOverall building plan


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FACILITIES PLANNING PHASES DETAIL PLANSDetailed machinery and equipment layouts

Detailed handling plans

Detailed communications / control plans

Detailed utilities distribution plans

Detailed building plans

IMPLEMENTATION

Building constructionManufacturing machinery procurement / installation

Utilities / auxiliaries procurement/ installation

Handling equipment procurement / installation

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