Factory Layout - Is your factory costing you money?

Factory layout

One thing that manufacturers often do not appreciate is how much the physical layout of their factory influences the way their operation works and the cost of production. Some factory layouts seem to be designed to add both time to the processing of the product and cost to the product.

The table below shows most of the operations involved in manufacturing:

Only two operations add value to the product and these are machining and assembling - so why do we spend so much time carrying out other activities that add no value and only cost to the item?

Consider the following random points:

• Time and cost spent moving things add no value to the product.
• If distances are great and movement is frequent, batch sizes will tend to be large. Nobody moves things frequently and over long distances one at a time.
• Large batches give increased WIP (Work in Progress), tie up critical resources for long periods of time and lead to a reduced ability to meet customer requirements.
• Final inspection doesn't work and yet we spend time carrying out inspection after inspection.

In many processes the primary activity is waste and this is not unusual in manufacturing. Before the paper pushers gloat it should be noted that manufacturing processes are generally better controlled than paperwork processes. It is not unusual to find that the paperwork to plan to manufacture a product takes more time to process than the manufacture of the product itself.

How to carry out a factory layout or process audit

• List the steps taken in your manufacturing process in the order that they take place.
• Draw your factory layout on an A3 sheet of paper (identify each machine and area).
• Draw the steps taken in the manufacturing process flow on the sheet of paper
• Measure the distance a product (and all the associated parts) travels in the process. You will be surprised at the total distance travelled.
• Look for non value added activities moving, storing, counting, inspecting, scrapping re-working and sorting. These are all adding cost but not adding value. They can be reduced or eliminated without affecting the process and eliminating them will reduce cost.
• Examine the process flow to reduce the distance travelled.
• Ask how long it normally takes to complete the manufacturing process. Then ask how long it would take in an emergency if it were 'walked through' the process. For most window manufacturers in the UK the residence time is about 24 hours (3 x 8 hours) and the 'walk through time' is about 2 hours - the process spends 22 hours (91.5% of the time) adding cost and only 2 hours (8.5% of the time) adding value. If the 'paper processing' time is added then the average UK numbers change to: adding cost for 78 hours (97.5% of the time) and adding value for 2 hours (2.5% of the time). Surely you can get better than that!
• Look for the step in the process that has the largest backlog of work. Measure the throughput of that operation (pieces/hour, for example). The step with the largest backlog will usually be the bottleneck in the process and will determine the capacity of the whole system. With window manufacture look at the movement of the bottlenecks as the product mix changes. They will move by the minute but some will stand out.

This works just as well for your paper processes as for your materials processes. In fact if you have ISO 9002 then this is one of the first steps you should have done as part of getting certification.

Tangram Technology Ltd. has produced a longer workbook on factory layout for window manufacturers. This is available at a cost of £35 (inclusive of VAT and postage) from Tangram. See our Contact Details for mail address.

Last edited: 24/03/04

 © Tangram Technology Ltd. 2000

Our standard disclaimer regarding Internet data applies.