Characteristics of a Complete Plant Layout

Hello, Im Juan Emilio Aranda, consultant at ME. Welcome back to the video series!

We’re putting together this short video because we have a growing number of clients that are approaching us with a good problem—which is, they are growing their business.
Perhaps they’re trying to keep up with increased demand for their products, and they have to make more of it with the resources they have in their existing facility and often times they’re running out of space. Like the snail that out-grows its shell, the shop is getting a little cramped.

Their drop in productivity over the years might be from aging equipment, so it’s a little bit harder to achieve the same results as before. And to make things worse, the shop is feeling the accumulation of years of inefficiencies are finally catching up to them. You know, all those little fixes we swear will “temporary” that we quickly learn to live with.

On the flip side other clients are fortunate in being able to buy new equipment, even automating some tasks, but the new equipment still has to work with existing processes to get the maximum benefit.

Some clients are even considering moving to a new and larger location which, by the way, is the ideal time to analyze the facility layout for its optimal efficiency. But we don’t want to just pack up all our old problems and move them to a new building.
There are many variations of this capacity issue, but it almost always boils down to the question of being able to meet your commitments to your clients. As the saying goes “it is not the big that eat the small but the fast that eat the slow”. So we need more than just brute force and long hours to stay competitive.

Luckily, we have tried-and-true methods in the realm of industrial engineering that allows us to be systematic in solving these kinds of productivity problems. But before proposing any solutions, as in any technical problem, we need to understand the situation and the context.

For this, we want to answer at least five major questions. What equipment is needed and how do we do what we do? Who is needed to be able to do all the work? When does the product need to move so it doesn’t accumulate all over the shop? Where are we going to place our raw materials so they are handy? We also want to understand why do people like their workspaces “just so”? And finally, how to pull all this information together to create a workspace that honors the needs of the people working there.
In short, we want to set ourselves up for success in our new facility.

First consideration – Understand how work is interconnected.

We want to understand the current state of the manufacturing and business processes. The tool for this is to create a map.

Mapping exercises are often an eye-opening experience for company leaders. It helps to create a big picture of the operation, “warts and all”, account for money tied up in the form of inventory, and it gives us a chance to finally document long-standing issues that have been preventing the team from performing optimally. Of critical importance, we want to identify all communication barriers between departments and customers so we may create the proper signals for work and establish feedback loops for quality events.

The takeaways that will help us later in planning the facility layout are: Acknowledge all sub-assemblies and special processes required to feed our main assembly. Also, because we took the time to expose our many inefficiencies in the value stream maps, we can identify what investments can be made for automation that will eliminate inefficient tasks that affect productivity. And, sometimes, we even have to admit that the way we do some procedures are not compliant with industry regulations.

At this stage it shouldn’t be too hard to come up with a plan to recover 6 to 7 figures in savings with cost reduction projects. That is money that is best served in investing to implement those desired improvements.

CAPACITY

Our next big question is, What is the true amount of work to be done to make your products? In other words, the shop’s capacity. Capacity is a measure of how much work a facility can achieve. And it starts with PEOPLE. When key people are away there’s a tendency for the less experienced workers to cut corners and then quality suffers, or work stops altogether. There are plenty of hidden activities that management is not aware of, that somebody is doing (not for free!) and it’s best to find out who does it, and when it gets done. Finding those under-staffed activities and reallocating resources to alleviate the workload is one of many ways to show respect for people. But we don’t need to stop here at the current state. By calculating the future capacity needs we can work backward to create a scaling plan that triggers capital equipment purchases and hiring of new team members based on customer demand.

The capacity model does not need to be fancy or complicated. The math itself is simple, though the devil is in the details. We basically need to understand how much work there is to be done daily, and then allocate the right number of resources needed to complete the work in the time available.

We go through the trouble of doing these calculations because we want to have a scaling plan to use internally or to present to investors. We want to calculate, and not guess, how much equipment and people are truly needed to meet our obligations today, but also later as demand increases we will have reserved the space to receive new equipment, and be prepared for those future needs of a larger workforce.

This model also gives us insight into the labor cost for each product family to allocate resources proportionally. This can come in the form of a staffing playbook for who goes where when there are absences without the need for direction from supervisors. Don’t you wish you had that during the pandemic?

FLOW

The next consideration to facility design is flow. No doubt you’ve heard of the concept of PULL in manufacturing.

What does an operator work on in a classic ‘pull’ system? The answer, Whatever is in front of you! So we want to make sure that work shows up in the right sequence and not pile up so everybody is working on the right things. The map of the logic flow might look like this.

The objective is to design the physical flow of work to ensure that product is always moving and keeping up with the takt time (the pace of work needed to meet demand). For this, we want every station to have approximately the same duration of work. This is called balancing.

Long processes may need to be broken up into multiple stations, in equally divided task duration. Fast and slow products need to be sequenced optimally so operators don’t get stuck with too many “difficult” products in a row, but a clever way to overcome this is to implement parallel stations. Some products may need to wait for specific components (aka “subassemblies”) before they can be called ‘finished’ and may need have an allocated space be staged temporarily or even stored until everything is ready. We don’t want to squirrel things away and get lost “out of sight, out of mind”.

In this stage, we want to establish visual communication between stations by purposefully allocating drop-off and pick-up spots for each process. We already mentioned breaking up large tasks, but here we add the possibility of designing specialty workstations with their own tools. We may even decide to add stations, especially parallel lanes to balance out the line even better. And finally, we want to identify the bottlenecks to add more resources or inventory staging as needed to make sure those constrained processes can stay busy.

Here’s an example of how we can apply this logic flow to decide how to layout a facility. In red, we have a so-called “monument” in the shop — equipment that cannot easily be relocated. This forces the rest of the shop to adapt to it, but we still place the workstations in a way that respects the logical flow.

If we have a different set of constraints in our building, like utilities and structural considerations, we need to reconfigure the layout but the logical flow can still be maintained. Same flow, different layout.

CELL DESIGN

OK, so far we’ve identified which processes need to exist, calculated how many of each we need, and designed the logical flow that keeps everybody equally busy. Now we get to step into the work cell to study its internal requirements.
Designing a manufacturing cell that considers the needs of the people who will be using it is crucial to ensure efficient and safe operations.

By considering factors such as product drop off and pick up points, material placement, and ergonomics, you can create a safe working space that shows respect for people and meets the needs of the customers in the shortest lead time.

We can also analyze the cell’s activities by the “seven flows” of manufacturing – the flow of raw materials and waste in-and-out of the cell, the movement of product and finished goods during the process, the motion by people and equipment as work gets done, how we receive-and-give out information, and how we deal with change management.

A standardized cell layout helps to overcome differences between the way people do things, leading to more consistent quality and predictable labor times.

Some of the goals in this phase is to avoid hours of redrawing in CAD Because we will come armed with considerations such as equipment selection, automation, needed jigs and fixtures, footprints for furniture, raw material shelving, and tool storage.
Another design goal is to make the workstation small enough that nothing ends up on the floor, everything has a designated space, we reduce operator motion and maximize their safety with ergonomics and eliminate forklift traffic.

INVENTORY

Inventory management is not glamorous like the other phases we’ve talked about so far. It requires tedious concentration and discipline, and unfortunately it quickly becomes an afterthought.

Effective inventory management tracks and controls goods and materials held available in stock and Work in Progress (WIP), thus optimizing your productivity and profits.

Going thru the trouble of making inventory calculations will help you understand what the optimum level of inventory is needed to keep production running without outages.

One overriding principle in this phase is to ensure the Seven Rights of the supply chain: Have the right materials, at the right time, in the right place, in the right quantities, in the right container, the right frequency, and sequence, all resulting in the right cost of ownership.

We want to layout our shop and workstations so that we’re not moving materials and product more than necessary. This might include creating collection spots for empty bins, decide on racking for parts kits, and define locations for staging of subassemblies. We want to decide, as a company, what our reordering signals need to be (whether kanban cards, empty bins, refilling parts to a line or weight).

At this point we also take time to decide on policies and rules for inventory to keep costs down.

In short, we want to design an inventory system with checks and balances. A system that is engineered. One of my favorite sayings is “you are always one part away from shutting down the line.” So we don’t want to leave things to chance, and we will need to create the discipline to adjust to the supply chain disruptions and avert disasters of our own doing.

Some of the many benefits?

Carve out areas for racks of raw materials and subassemblies
Create paths for conveyance devices and establish delivery routes without obstacles
Understand the height requirements for material handling
Come up with inventory systems that prevent loss from theft, spoilage, and returns
Even get new quotes for reduced insurance costs because of the improved safety

LAYOUT

As you can see, you will be well served by taking all these considerations into account before spending time and money into moving your equipment, or finding a new building, or hiring contractors.

The goal of this final stage is to incorporate all the previous discoveries and to lay out the facility in support of high quality and efficient operations.

This is the time to consider safety and communications, utility availability, floor strength, access to doors and docks, spot the conflicts among utilities and services (like gas, water, power, heat, light, air, sewage, HVAC, and exhausts) before any physical equipment is bought or brought into the building.

Last but not least, if your industry requires it, identify where to locate secure storage, and clearly mark any testing & quarantine areas.

And there it is, a systematic methodology that will help you avoid mistakes that will be much more expensive to correct later. By dotting the I’s and crossing the T’s before you pour any the concrete or tear down walls, you can be much more confident going into a facility layout project.

Thank you for listening! As always manufacturers edge is here to assist you with this and many other projects so your company grows to its full potential.

Juan Emilio Aranda
Client Services Consultant
Manufacturer’s Edge

Juan Emilio brings over twenty years of high-tech manufacturing and management experience from the semiconductor industry. He led teams to over 4000 hours of labor reduction from Kaizen activities, model-based problem solving, designing IT solutions, driving knowledge capture, and work standardization.

Juan Emilio is known as a skilled facilitator and project manager, passionate about listening to the needs and ideas of workers on the shop floor, and an advocate of promoting a safe, standardized, and creative learning environment for the scalability of complex operations.

Juan Emilio was raised in Mexico City, enriched by the benefits of a bilingual and bicultural upbringing. He holds an Electrical Engineering degree from the University of New Mexico and a Professional Certification in the Theory of Inventive Problem Solving (TRIZ). When he is not ramping up factory operations, he can be found learning about permaculture and trying his hand at urban farming.

Education/Professional Certifications:
Electrical Engineering, University of New Mexico
Professional Certification, Theory of Inventive Problem Solving (TRIZ)