Page 148 - DMGT501_OPERATIONS_MANAGEMENT

Operations Management

Notes Good micro level planning can affect an organization and determine how well it meets its
competitive priorities by:
1. Facilitating the easy flow of materials and information,

2. Increasing the efficiency in the utilization of labour and equipment,
3. Increasing convenience of customers and thereby sales at a retail store,
4. Improving working conditions and decreasing hazards to workers,
5. Improving employee morale, and

6. Improving communication.
Facility planning at the micro level involves decisions about the functional layout and physical
arrangement of economic activity centers. Economic activity centers are work related places
that consume space: it could be a teller window in a bank or the space for customers to wait for
their turns; it could be a machine, a work-bench or work-station; it could be a stairway or an
aisle; it could be a cafeteria or storage space. These have many practical and strategic implications.
The goal of functional layout is to allow workers and equipment to operate as effectively as
possible. In order to do so, the following questions need to be addressed:
1. What should the layout include for each economic activity center? The economic activity
center should reflect decisions that maximize productivity. For example, a central tool
room is often efficient for most processes, but keeping tools at individual work-stations
makes more sense for many processes.

2. How much space and capacity does each economic activity center need? Space is a cost but
inadequate space can reduce productivity and even create safety and health hazards.
3. How should each economic activity center's space be configured? The space, its shape, and
the elements need to be interrelated.

Example: In a store the placement of the show windows, spaces planned so that products
are visible and providing a pleasing atmosphere are necessary parts of the layout configuration
decisions.
The location of an economic activity center has two dimensions that affect a center's
performance:

(a) Relative location, or the placement of a center relative to other centers, and
(b) Absolute location or the particular space that the center occupies within the facility,
both.

Where should each economic activity center be located? Location can significantly affect
productivity. Employees who must frequently interact with one another should be placed close
together so that interaction becomes easier; sections or departments should be planned to reduce
time lost in moving material or traveling of personnel back and forth.

Task Interview any one businessman in your locality who owns either a production
outlet or a large service outlet. Ask what all factors he kept in mind while
choosing his site of operation.

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