Rationalizing your plant layout

If your company is experiencing healthy growth of revenues and profits, you may be attending IWF 2018 to purchase new process machinery. In that case you should be completing a study that justifies the prospective investment. That analysis should go well beyond machinery selection to determine where it best fits in your operation to maximize the benefits.

Too many machines are simply installed in a convenient spot rather than the most effective location. Doing so often fails to capture the full range of benefits that should accrue from the equipment’s purchase. Over time as more machinery is installed, that practice results in poor flow plus excessive costs particularly for overhead and materials handling.

To combat such a consequence requires continuous attention to improvement of your plant layout. After significant additions of new products and equipment, the plant layout must be refreshed. In the halcyon days of the auto industry, plants would be shutdown annually, stripped to the floor, and a new layout installed to produce the latest model. Few in our industry can follow that extreme solution. A workable alternative is to assemble a phased plan for improving the plant layout over time.

To develop such a plan you first must evaluate the existing operation to identify weaknesses and opportunities for improvement. Based on a career spent improving furniture, cabinet, and other value-added wood products plants, the following three editions of FDMC present a simple approach to layout planning.

Chapter 1 outlines methods for collecting critical product and process information. The subsequent two chapters introduce simple tools useful in identifying improvement opportunities. Whether you are improving an existing plant or designing a new one, following these steps will prepare you for designing the operation’s floor plan.

Document your product mix

All facility planning begins with a set of annual revenue targets covering the foreseeable future with the most recent period as the baseline. For use in planning, a dollar-denominated budget must be sub-divided into categories of like products and converted to physical unit volumes. A category is usually defined by the materials and processes required to manufacture its items. A simple example is the typical wood bedroom plant with two categories: casegoods and beds. Cabinet plants often divide their products into separate categories for wall, base, and tall cabinets as well as specials such as corner and angle cabinets.

The idea is to have each category consist of items with similar material and processing requirements. Further differentiation may require sub-categories. For example, many cabinet product lines have both face frame and frameless varieties of the same item configuration.

Two other criterion are low volume/high variety and high volume/low variety.

Following this segregation each category’s dollar total must be converted into physical unit volumes. At least one representative item must be selected for each category; and its material and labor content, process requirements, and average selling price FOB plant must be documented. The projected dollar volume of each category divided by the average price of that item determines the quantity of each category to be produced per period.

A tool useful in selecting items is the Product/Quantity Chart (see first image). To produce this chart you plot the percent of total unit volume for every product in a category moving from highest to lowest. Usually your representative items should be chosen from the high volume/low variety group that generates 70 to 80 percent of sales. However if the process demands of the slower selling/high variety products in the category differ from the high volume items, you should also create a separate category representing items on the right hand side of the chart.

Adding representative items and categories will enhance your understanding of the required processes and resources. As noted above your plant may have separate processes for high and low volume items within a category. For example, if 80 percent of a category is finished on a mechanized line with the balance finished in off-line spray booths, you should create a high and low volume category to represent those products.

In summary the more categories you document, the better you can evaluate and fine tune the plant’s process design. Don’t forget to create categories for any new products that require new processes and materials.

Once you have assembled your representative product line into categories, document each item’s description, price, annual unit volume, bill of materials, typical order size, and an annual production budget.

Document your flow

Evaluating a layout requires knowledge of material flow from one process step to the next. Using a Process Sequence Chart (see Figure 2) you can visually document the routing of every component on your representative item’s bill of materials.

The processes required for the item’s production are listed down the left side of Figure 2. These activities are arranged in their basic sequence starting with Receiving, moving through the various machines, and ending with Shipping.

To the right you create columns for each component part in its bill of materials. Figure 2 is completed by entering the process route for every required component. For example, the second process required to produce the shelves in Figure 2 is a Panel Saw followed by the third process, an Edgebander.

If you are proposing new machinery, remember to create a chart that reflects the modified flow that is created with its installation.

Figure 2



Since the processes were listed in Figure 2 based on their current order along the general path through the plant, the chart reveals backtracking of Tops/Bottoms from the Edgebander to the Drill & Dowel machine.

Note that the word process in this context can mean department, machine, work center, function, activity, and element. In large plants with complex processing and support requirements, versions of this chart should be created to cover plant-wide movements at the departmental level as well as flow within departments and multi-process work centers.

Milestone: Confirm the logic and accuracy of the product budget, item descriptions, and process sequences with the project leader. You are now ready for Chapter 2 to produce an early improvement plus prepare a current layout CAD file and process element descriptions.    

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