Page 107 - DMGT501_OPERATIONS_MANAGEMENT

Unit 4: Process Selection and Facility Layout

4.5.1 Process Layout and Material Handling Costs Notes

In process layouts, one of the principles of paramount importance is that centers between which
frequent trips or interactions are required should be placed close to one another.
This has implications in all manner of organizations; in a manufacturing plant, it minimizes
materials handling costs; in a warehouse, stock picking costs can be reduced by storing items
typically needed for the same order next one another; in a retail store, minimizing customer
search and travel time improves customer convenience; in an office where people or departments
must interact frequently are located near one another – both communication and cooperation
often improve and coordination between departments can be less challenging.
There are both quantitative and semi-quantitative methods available for process layouts. Load-
Distance Model is a simple mathematical model that captures costs to identify a location that
minimizes the total weighted loads moving into and out of the facility. Another popular technique
similar to the Load Distance Model for plant layout is the Travel Chart Technique. In this, we
start from an initial layout, which may be the existing layout. The designer concentrates only on
the critical points of the layout. Critical points are generally the areas, which have high volume-
distance movement of materials. The designer attempts to modify the layout so that there is
maximum improvement in the critical points.

Spiral Analysis

In certain types of layout problems, numerical flow of items between departments is either
impractical to obtain or does not reveal the qualitative factors that may be crucial to the placement
decision. In these situations, a semi quantitative technique like the Spiral Analysis can be used.
Spiral Analysis involves:
1. Developing a relationship chart showing the degree of importance of having each
department located adjacent to every other department.
2. From this chart, an activity relationship diagram, similar to the flow graph is obtained,
and is used for illustrating material handling between departments.
The objective of the spiral analysis is to arrange the departments in such a manner that the
transportation costs of material handling are minimized. The analysis tries to find an option
that provides the most direct flow of material between different departments.
Anand Parvat Industries plans to redesign the layout of its factory. The factory produces five
major products. The initial layout plan is shown in Figure 4.2. In addition to incoming and
outgoing stores, the factory has 6 departments. This data with the flow paths and volume for the
different products is captured in Table 4.1.
Table 4.1: Sequence of Processing Departments

Product group Percentage volume Flow path through departments
I. 18.2 Stores, A,B,C,D,E,F, Stock
II. 10.9 Stores, B,D,E,F, Stock
III. 29.3 Stores, A,B,D,C,F, Stock
IV. 24.2 Stores, B,C,D,C,E,F, Stock
V. 8.9 Stores, B,C,D,F, Stock
TOTAL 91.5

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