BSC BUSINESS STUDIES

Operations ManagementSESSION EIGHT

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Operations management

The learning objectives of this lesson are as follows:

• What is layout?

• What are the basic layout types used in operations?

• What type of layout should an operation choose?

• What is the impact of layout on flow through the process?

The layout of an operation is concerned with the physical location of its transforming resources:

o Facilities

o Machines

o Equipment

o Staff

Layout involves the relative positioning of transforming resources within operations and the allocation of tasks, which together dictate the flow of transformed resources

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LAYOUT AND FLOW

What is layout?

The flow of transformed resources

Layout is difficult and expensive and therefore hard to change

Getting layout wrong can result in:

o Overly-long or confused flow patterns

o Customer queues

o Long process times

o Inflexible operations

o Unpredictable flow

o High costs

Class activity : Bar layout

Answer the questions below:

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Which layout is better?Does the type of bar matter? (customers, what is sold)

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What makes a good layout?

1. Inherent safety

2. Length of flow

3. Clarity of flow

4. Staff conditions

5. Management coordination

6. Accessibility

7. Use of space

8. Long-term flexibility

Most practical layouts are derived from only four basic types:

1. Fixed-position

2. Functional

3. Cell

4. Product

Volume and variety characteristics of layout types

Layout is influenced by process types

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Product layout

The Basic Layout Types

Advantages and disadvantages of fixed position layout

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Several processes can be performed simultaneously

Scheduling space and activities can be difficult

Instead of materials, information or customers flowing through the operation, it is the equipment, machinery, equipment or people that do the moving

Fixed-position layout

It is difficult to design the layoute.g. safety, length of flow, clarity of flow,

coordination, accessibility, use of space

Short case: Layout of a Wood Processing Facility

Functional layout – it conforms to the needs and convenience if the functions performed by the transforming resources within the processes.

In functional layout similar resources or processes are located together. This may be because it is convenient to group them together, or that the utilization of transforming resources is improved.

Example: Functional layout in a library – the path of one customer

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Flow in each function is in one direction from start to finish

Instead of materials, information or customers flowing through the operation, it is the equipment, machinery, equipment or people that do the moving

Functional Layout

It is difficult to design the layoute.g. safety, length of flow, clarity of flow,

coordination, accessibility, use of space

Advantages and disadvantages of functional layout

• A hybrid layout of facilities, equipment or machinery combining some principles of fixed position and functional layouts

Example: U-shaped cell layout

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Note that the flow is random: this is not true for manufacturing functional layouts

Complex flow

Cell Layout

Department store with sports goods concession’

Advantages and disadvantages of cell layout

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- dissimilar machines or processes are grouped together according to the design of the product being made

(similar to functional layout) The sports shop is

a cell layout within a functional layout

- the operation sequence and flow direction can be varied (similar to fixed-position layout)

Layout is determined by the design of the product Usually take the form of lines with uni-directional flow

Two types of product layout:

Example: An innovative layout in a surgery improves its efficiency

(Assembly line surgery)

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Can need more plant

1. Assembly type – materials added & resources applied at each stage to produce an end product

Product Layout

1. Assembly type – materials added & resources applied at each stage to produce an end product

Example: A product layout in a paper manufacturing operation

Advantages and disadvantages of product layout

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Work can be very repetitive

1. Assembly type – materials added & resources applied at each stage to produce an end product

1. Assembly type – materials added & resources applied at each stage to produce an end product

Many operations either design themselves hybrid layouts which combine elements of some or all the basic layout types, or use the ‘pure’ basic layout types in different parts of the operation.

Example: A restaurant complex with all four basic layout types

The volume-variety process position of an operation influences its layout and, in turn, the flow of transformed resources.

Volume and variety characteristics of layout types

The relationship between process types and layout types

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Flow is intermittent

WHAT TYPE OF LAYOUT SHOULD AN OPERATION CHOOSE?

Selecting a layout type

Basic layout types have different fixed and variable costs that seem to determine which one to use

Detailed Design Techniques

Detailed design is the act of operationalizing the broad principles which were implicit in the choice of the basic layout type.

Fixed position – resource location analysis

Functional layout – flow charts and relationship charts (steps)

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Project processes

Product

DETAILED DESIGN OF THE LAYOUT

Cell layout – product flow analysis

Product layout – assembly line balancing techniques

Balancing loss is that proportion of the time invested in processing the product or service which is not used productively

• But if work is not equally allocated, the cycle time will increase and ‘balancing losses’ willoccur

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An ideal ‘balance’ where work is allocated equally between the stages

Calculating balancing loss:Idle time every cycle

= (3.0 – 2.3) + (3.0 – 2.5) + (3.0 – 2.2)= 2.0 mins

Balancing loss = 2.0

4 × 3.0

In product layout, the transforming resources are located in sequence specifically for the convenience of products or product types. The detailed design of product layouts includes a number of decisions, such as the cycle time to which the deign must conform, the number of stages in the operation, the way tasks are allocated to the stages in the line, and the arrangement of the stages in the line. The cycle time of each part of the design, together with the number of stages, is a function of where the design lies on the ‘long thin’ to ‘short fat’ spectrum of arrangements. This position affects costs, flexibility, robustness and staff attitude to work.

The arrangement of stages in product analysis can be described on a spectrum from ‘long thin’ to ‘short fat’.

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Long-thin pr

ocess

‘Long Thin to Short Fat’

= 0.1667= 16.67%

The cycle time- is the time between completed products, pieces of information or customers emerging from the process. Cycle time is a vital factor in the design of product layouts and has a significant influence on most of the other detailed design decisions.

It is calculated by considering the likely demand for the products or services over a period and the amount of production time available in that period.

• Calculating the required cycle time

• Forecast Demands During the Period (A)

• Availability of Productive Time (B)

• Cycle Time (C=B/A)

• Deciding how many staff are needed

• Work Content of the Task (D)

• Cycle Time Required (C)

• Number of Staff (D/C)

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Fat and thin describes the amount of work at each stage

Calculating the required cycle

Case study: IKEA

http://www.dailymotion.com/video/xjknh8_how-to-shop-at- ikea_school

Consider the design of IKEA in terms of:

• Product

• Process

• Queuing

Assessing Layout - IKEA

Good Design Bad Design

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11.46 (12)

The product from a customer perspective

The product from an operations perspective

The process from a customer perspective

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IKEA

The process from an operations perspective

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IKEA

process:

stock-outs (even between a telephone stock-check and arriving at store)

returns procedure

must be physically fit to enter process!

must have a car

its usually best to go as a couple ... which often means bringing the whole family

The queues from a customer perspective

The queues from a marketing perspective

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IKEA

The queues from an operations perspective

The queues from an operations perspective

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