Chapter 4: Rationalizing your plant layout

Space is a key asset in any manufacturing operation. It’s typically a scarce resource: not enough in the right places, too much in the wrong places, and often of poor quality i.e., the wrong shape, inadequate clear height, insufficient access, and obstructions such as structural columns, load-bearing walls, mechanical/ electrical equipment, etc. (See Chapter 3 here.)

To repurpose an existing building the layout planning team is always challenged to install the required Elements without sacrificing intended capacity and capability. Only through the correct allocation, positioning, and configuration of space can permanent inefficiency be avoided.

Successful space planning begins with the Process & Support Element Summary file introduced in Chapter 2. Along with other important information each Summary should contain (a) the Element’s current capacity; (b) its existing space usage taken from the current CAD layout file; and (c) any adjustments for tight or excessive space usage. The space information in the Summaries establishes the project baseline and should be documented in a Space Planning Worksheet like Figure 1.


Space Planning Worksheet



Project your total space needs

The tough part comes next: Estimating the space needed to support the proposed growth of capacity and capability over time. The task of projecting space requirements for industrial operations is highly subjective, a mix of science and educated guess. Several techniques can be employed to create an accurate allocation.

The simplest estimating method utilizes historic operating ratios such as Revenue $ per Square Foot and Square Feet per Production Employee. Graphing these ratios over time will illustrate how the plant performed at different points of the business cycle.

Any seasonality that exists will also be revealed. The key is to establish levels of the selected ratios that are achievable and to use those data to calculate space needs as volume grows. This method is simple to utilize and accurate enough to project total facility space needed for each phase of revenue growth.


Allocate space to the Elements

More accurate estimation demands drilling further into the data. At any given time a plant typically has a single bottleneck Element that limits output. Variations in equipment utilization, product mix, employment, overtime, and capital investments can cause bottlenecks to shift. The layout team’s job is to determine each Element’s current maximum capacity given the proposed product mix and operational policy.

The Element with the lowest maximum capacity is the first bottleneck. The team then develops an action plan for breaking that bottleneck and meeting the first phase’s capacity target. If that Element requires more area, the addition is recorded in a new column for phase 1 in the Space Planning Worksheet. Note that growth may require more than one Element to achieve a phase’s capacity target.

If so, those affected Summaries must also be updated to document the necessary space and equipment additions. That exercise is repeated as growth encounters bottlenecks one by one. The needs of each bottlenecked Element are re-evaluated, and the layout team formulates an action plan for each phase. In all cases, the new requirements are recorded on the relevant Process & Support Element Summaries, and the new space need is noted in the rows of a new column of the Space Planning Worksheet. 

Layout textbooks call the above technique converting: Estimating each Element’s resource needs for the plan’s phases, extrapolating the new square footages for each phase, and setting a space budget. If your project envisions new product or process capabilities, new Summaries documenting these additions must be created. In all cases, the space estimates from both the existing and new Summaries should be added to the Space Planning Worksheet.

The initial resource and space projections for each Element should be developed by a small, experienced team including an ad hoc representative of the subject Element. Based primarily on interview and observation, this method is admittedly subjective.

For that reason, the Element team’s work should be reviewed by the layout planning team who can consider all possible improvements in the plant’s processes whose implementation impacts space. Lean manufacturing and execution systems that reduce throughput time are good examples. Installation of racks and narrow-aisle fork lifts that utilize the plant’s clear height is another.

Also remember:

1. When projecting process equipment capacities the team must establish realistic utilization factors. Overestimating a critical machine’s run time percentage can doom a plant to permanent overtime and even financial loss.

2. Increases in capacity and space are rarely a linear function of production volume.    

3. For Elements that contain large, complex equipment such as finishing lines and rough mill systems, space allocation and configuration should be based on first-draft detailed layouts.

Balance existing and projected space

The final Space Planning Worksheet shows the total space estimate required to manufacture the planned products and volumes and the allocations to each Element. Comparing that total with your plant’s existing area under roof tells you if sufficient space is available to achieve your target output.

If not, you must determine whether your site can accommodate one or more expansions that cure the shortage. If so, your choices are to expand or scale back the original capacity target. In either case, you must repeat the analysis presented in this four-part series.

Get it right

Starting with the definition of the products to be made, the analysis outlined in this four-part series provides an in-depth understanding of your production process, its flow intensity, handling cost, the relationships between process steps, and space allocation. Without this information rationalizing your layout becomes simply a drafting exercise. New infrastructure like dust extraction and other utilities as well as necessary building modifications are expensive. You only get one shot at implementing a successful re-layout.   

Bottom Line The unstated motto of every successful layout planning team is “plan your work and work your plan.” Over the course of many projects, the planning process outlined in this series has ensured that the final layout was based on well-founded knowledge rather than pure conjecture. Only through this discipline can you create a layout design that provides a competitive weapon for your company.

As an added benefit, the attention given your existing layout will open your eyes to other plant floor weaknesses beyond the arrangement of your equipment. With rare exception, all sorts of improvement opportunities abound. That’s the next chapter of Raymond’s View

 *For more depth and detail on the entire layout process refer to textbooks like Manufacturing Plant Layout by Edward J. Phillips.

Credit: Every student, teacher, and engineer who has read the late Richard Muther’s Systematic Layout Planning will recognize his fingerprints on this series.

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About the author
Art Raymond

Raymond joined Hooker Furniture in 2010 as VP Casegoods Operations on a three year contract. He continues to consult with the company as it expands its product line and distribution channels.