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Heavy manufacturing
auto plants, steel mills, chemical plants small components mfg, assembly
Light industry
I G Perera
MBA (Uni of W.Sydney) BA, MISMM, ISO 9000 Consultant and Auditor
Construction costs Land costs Raw material & finished goods shipment modes Proximity to raw materials Utilities Labor availability
3
Construction costs Land costs Easily accessible geographic region Education & training capabilities
3. Suitability of demand 4. Closeness to markets 5. Availability of communication facilities 6. Availability of major modes of transportation 7. Availability of infrastructure facilities 8. Disposal of waste 9. Govt Govt; ; support and taxes & investment encouragement 10. Housing and recreational facilities 11. Security, culture and society 12. skilled labour labour, , population etc 13. Availability of essential services
16 May 2013
Evaluation of Locations
There are several evaluation techniques which include:
Factor
Weighting
Market/Customer (40) Proximity of Market Customer base Com petitors Suppliers (25) P i it of Proximity fS Suppliers li Transport Costs
10 20 10
Weighted score (or Multiple Factor Rating) method Location Cost / Volume analysis Centre-of-Gravity method The Load-Distance method Geographic Information Systems
15 10
3 3
4 2
4 3
Environment (15) Energy Costs Water Site (10) te construction costs Labour cost Local Government (10) Rates/Taxes Incentives
10 5
3 5
4 4
4 5
Si
5 5
3 3
5 5
4 4
5 5 100
3 2
4 5
5 3
Total
BreakBreak -even analysis Locations X,Y and Z have the cost structures given in the chart below for manufacturing a product, which is expected to sell for Rs. Rs.7000 per unit. unit. Find the most economical location for an expected volume of 2000 units. units.
Location
X Y Z
FC/year
6,000,000 7,000,000 5,000,000
VC/unit
1,500 500 4,000
BreakBreak -even analysis Locations X,Y and Z have the cost structures given in the chart below for manufacturing a product, which is expected to sell for Rs. Rs.7000 per unit. unit. Find the most economical location for an expected volume of 2000 units. units.
Location
X Y Z
FC/year
6,000,000 7,000,000 5 000 000 5,000,000
VC/unit
1,500 500 4 000 4,000
Location
X Y Z
FC/year
6,000,000 7,000,000 5,000,000
VC/unit
1,500 500 4,000 Total cost = VC + FC For X, TC = 6,000 000, ,000 + 1500 x 2000 = 9,000 000, ,000 For Y, For Z,
Z X Y
Total co ost
70 60 50
400
1000
Volume
C t Cost
C t Cost
Volume
Volume
Center-of-Gravity Technique
Weighted Center of Gravity Method
Weighted center of gravity method A g decision modeling g technique q logistics that attempts to identify the best location for a single warehouse, store, or plant given multiple demand points that differ in location and importance.
Locate facility at center of geographic area Based on weight g & distance traveled Establish grid-map of area Identify coordinates & weights shipped for each location
24
2 (x2, y2), W2 y2
x=
n xiWi y=
i=1 n Wi
n yiWi
A X Y
Center
i=1 n Wi
1 (x1, y1), W1 y1
i=1
200 100 250 500 200 500 600 300 75 105 135 60
i=1
where,
500 400
3 (x3, y3), W3 y3
Wt
D
x, y = coordinates of the new facility at center of gravity xi, yi = coordinates of existing facility i
x1 x2 x3 x
Calculating Center-of-Gravity
y=
i=1 n Wi
i=1
27
Example
Current location and population of the three towns to be served by the warehouse
Figure8.7
Load-Distance Technique
Load-Distance Calculations
Compute Load x Distance for each site Choose site with lowest Load x Distance Distance can be actual or straight-line
LD =
n li di
i=1
the load expressed as a weight, number of trips or units being shipped from the proposed site and location i the distance between the proposed site and location i = (xi - x)2 + (yi - y)2
where, (x,y) = coordinates of proposed site (xi , yi) = coordinates of existing facility
31
32
Load-Distance Example
Potential Sites Site 1 2 3 X 360 420 250 Y 180 450 400 X Y Wt A 200 200 75 B 100 500 105 Suppliers C 250 600 135 D 500 300 60
Site 2 Site 3 dA = 333 dB = 323.9 dC = 226.7 dD = 170 dD = 269.3 dA = 206.2 dB = 180.4 dC = 200
Compute load-distance
LD =
li di
i=1
Compute distance from each site to each supplier Site 1 dA = dB = (xA - x1)2 + (yA - y1)2 (xB - x1)2 + (yB - y1)2 = = (200-360)2 + (200-180)2 = 161.2 (100-360)2 + (500-180)2 = 412.3
Site 1 = (75)(161.2) + (105)(412.3) + (135)(434.2) + (60)(434.4) = 125,063 Site 2 = (75)(333) + (105)(323.9) + (135)(226.7) + (60)(170) = 99,789 Site 3 = (75)(206.2) + (105)(180.3) + (135)(200) + (60)(269.3) = 77,555*
* Choose site 3
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dC = 434.2
dD = 184.4
1. Availability and cost of land 2. Availability of inputs 3. Suitability of demand 4. Closeness to markets 5. Availability of communication facilities 6. Availability of major modes of transportation 7. Availability of infrastructure facilities 8. Disposal of waste 9. Govt Govt; ; support and taxes 10. Housing and recreational facilities 11. Security, culture and society 12. skilled labour labour, , population etc
Classification of layouts
Advantages:
1. 2. 3. 4.
1. Process layout Similar machine and services are located together eg, welding area, x-ray machines Machines are better utilized, fewer machines are required High degree of flexibility Low investment in machines Diversity of tasks for the operator
Classification of layouts
2. Product layout Machine and services are located in line with the sequence of the processes processes. . When volumes are high high. .
Classification of layouts
2. Product layout
Disadvantages:
1. A machine breakdown will cause downtime 2. Change over will cause higher downtime 3. The line output will decide by the bottleneck item 4. Higher capital investment is required
Advantages:
1. The flow of product will be logical and smooth 2. Minimum in in-process inventory 3. Less through put time 4. Minimum material handling cost 5. Operators need not be highly skilled 6. Production planning and control is easier 7. Maximum utilization of space
Classification of layouts
3. Group technology layout A combination of product and process layouts. layouts . No of machines and components will be divided into cells. cells . Each cell will produce the total component or the product product. . A multimulti-objective layout layout. . Maternity ward,
Classification of layouts
4. Fixed position layout: layout: Physical chs of the product decide the operators and machinery required required. . Eg Eg: : shipbuilding yard, a construction site Enough space for storage of materials and machinery Movements can be accommodated Coordination with different parties re required Interaction amongst different contractors
Fixed-position layout
Varie ety
Total co ost
Process layout
Low Low
Use process
Use Cell
Use Product
Volume High
Volume
Step - 2
St - 3 Step Step - 4
Adjust the schematic layout fit into geographic area. area. Draw up the actual layout layout. . Calculate the distances of travelling and the costs involved. involved. Try to reduce the distance by exchanging the work centers. centers.
Step - 5
A-2.5
B-1.5
G-1.5
H-1.3
C-3.75
D-1.7
E-1
F-1.5
Task C gives the cycle time of the line line. . That decides the max rate of production
3.5
No of work stations =
ws1
A-2.5 B-1.5 G-1.5 H-3
Task
A C D
Follower s
6 4 3 2 2 1 1 0
Time
2.5 3.75 1.7 1.5 1 1.5 1.5 3.5
ws2
C-3.75 D-1.7 E-1
Followers
6 4 3 2 2 1 1 0
Time
2.5 3.75 1.7 1.5 1 1.5 1.5 3.5
WS3 WS-1
5.6 2.5 = 3.1 3.1 1.5 = 1.6 1.6 1.5 = .1
F1.5
B E F G H
WS-2
5.6 3.75 = 1.85
WS-2
5.6 1.7 = 3.9 3.9 1 = 2.9 2.9 1.5 = 1.4 1.4-1.3 = 0.1
Idle time
Efficiency =
Thank you !
I G Perera
Tel: 0344285500 Ext 1800 Direct: 0344285533 Mobile : 0777367753 E-mail : PereraIG@masholdings.com