MIDTERM REVIEW
CHAPTER 1
INTRODUCTION
The facilities planning is to help organization achieve supply chain (SC) excellence.
Facilities planning determines how an activity's tangible fixed assets best support achieving the activity's
objective.
For a manufacturing firm, facilities planning involves the determination of how the
manufacturing facility best supports production.
For an airport, facilities planning involves determining how the airport facility is to support the
passenger-airplane interface.
For a hospital: How the hospital facility supports providing medical care to patients
1. Facilities Location
Determining how the location of a facility supports meeting the facility's objective
Its placement with respect to customer, suppliers, and other facilities with which it interfaces.
Its orientation on a specific plot of land
• Facilities Design
The determination of how the design components of a facility support achieving the facility's objectives
• Facility Systems
Structural and enclosure systems
Lighting, electrical, communication systems
Life safety systems
Sanitation systems
For a plant: Power, light, gas, heat, ventilation, air conditioning, water, sewage needs
2. Facilities Layout
Equipment
Machinery
Furnishings
For a manufacturing facility:
Production areas
Support areas
Personnel areas within the building
Handling System
• Mechanisms needed to satisfy the required facility interactions
For a Manufacturing Facility: Materials, personnel, information, and equipment-handling systems required to
support production
3. Objectives of facilities planning
• Customer satisfaction
• Return on assets (ROA)
Maximize inventory turns
Minimize obsolete inventory
Maximize employee participation
Maximize continuous improvement
• Speed for quick customer response
• Costs and supply chain profitability
• Supply chain through partnerships and communication
, • Organization’s vision
• Utilizations of people, equipment, space, energy.
• Return on investment (ROI) on all capital expenditures
• Adaptability and ease of maintenance
• Employee safety and job satisfaction
4. Facilities planning process
1. DEFINE THE PROBLEM
• The objective of the facility
• Products/Volumes/Role in the SC
• The primary and support activities
• Operations, equipment, personnel, material flows
• Maintenance
2. ANALYZE THE PROBLEM
• The interrelationships among all activities
(Qualitative and quantitative)
3. DETERMINE THE SPACE REQUIREMENTS FOR ALL ACTIVITIES
For all equipment, material, and personnel
Alternative designs
Alternative facilities plans
4. EVALUATE THE ALTERNATIVES
5. SELECT THE PREFERRED DESIGN
6. IMPLEMENT THE DESIGN
Implement the plan
Maintain and adapt the plan
Redefine the objective of the facility
5. Strategic Facilities Planning
• 1. Number, location, and sizes of warehouses and/or distribution centers.
• 2. Centralized versus decentralized storage supplies, raw materials, work-in-process, and
finished goods for single- and multi-building sites, as well as single- and multi-site companies.
• 3. Acquisition of existing facilities versus design of model factories and distribution centers of
the future.
• 4. Flexibility required because of market and technological uncertainties.
• 5. Interface between storage and manufacturing.
• 6. Level of vertical integration, including "subcontract versus manufacture" decisions.
• 7. Control systems, including materials control and equipment control.
• 8. Movement of materials between buildings, between sites.
• 9. Changes in customers' and suppliers' technology as well as firm's own manufacturing
technology and materials handling, storage, and control technology.
• 10. Design-to-cost goals for facilities
PROBLEMS
1) What criterion should be utilized to determine the optimal facilities plan?
2) Chart the facilities planning process for a company
3) Is facilities planning ever completed for enterprise? Why or why not?
CHAPTER 1
INTRODUCTION
The facilities planning is to help organization achieve supply chain (SC) excellence.
Facilities planning determines how an activity's tangible fixed assets best support achieving the activity's
objective.
For a manufacturing firm, facilities planning involves the determination of how the
manufacturing facility best supports production.
For an airport, facilities planning involves determining how the airport facility is to support the
passenger-airplane interface.
For a hospital: How the hospital facility supports providing medical care to patients
1. Facilities Location
Determining how the location of a facility supports meeting the facility's objective
Its placement with respect to customer, suppliers, and other facilities with which it interfaces.
Its orientation on a specific plot of land
• Facilities Design
The determination of how the design components of a facility support achieving the facility's objectives
• Facility Systems
Structural and enclosure systems
Lighting, electrical, communication systems
Life safety systems
Sanitation systems
For a plant: Power, light, gas, heat, ventilation, air conditioning, water, sewage needs
2. Facilities Layout
Equipment
Machinery
Furnishings
For a manufacturing facility:
Production areas
Support areas
Personnel areas within the building
Handling System
• Mechanisms needed to satisfy the required facility interactions
For a Manufacturing Facility: Materials, personnel, information, and equipment-handling systems required to
support production
3. Objectives of facilities planning
• Customer satisfaction
• Return on assets (ROA)
Maximize inventory turns
Minimize obsolete inventory
Maximize employee participation
Maximize continuous improvement
• Speed for quick customer response
• Costs and supply chain profitability
• Supply chain through partnerships and communication
, • Organization’s vision
• Utilizations of people, equipment, space, energy.
• Return on investment (ROI) on all capital expenditures
• Adaptability and ease of maintenance
• Employee safety and job satisfaction
4. Facilities planning process
1. DEFINE THE PROBLEM
• The objective of the facility
• Products/Volumes/Role in the SC
• The primary and support activities
• Operations, equipment, personnel, material flows
• Maintenance
2. ANALYZE THE PROBLEM
• The interrelationships among all activities
(Qualitative and quantitative)
3. DETERMINE THE SPACE REQUIREMENTS FOR ALL ACTIVITIES
For all equipment, material, and personnel
Alternative designs
Alternative facilities plans
4. EVALUATE THE ALTERNATIVES
5. SELECT THE PREFERRED DESIGN
6. IMPLEMENT THE DESIGN
Implement the plan
Maintain and adapt the plan
Redefine the objective of the facility
5. Strategic Facilities Planning
• 1. Number, location, and sizes of warehouses and/or distribution centers.
• 2. Centralized versus decentralized storage supplies, raw materials, work-in-process, and
finished goods for single- and multi-building sites, as well as single- and multi-site companies.
• 3. Acquisition of existing facilities versus design of model factories and distribution centers of
the future.
• 4. Flexibility required because of market and technological uncertainties.
• 5. Interface between storage and manufacturing.
• 6. Level of vertical integration, including "subcontract versus manufacture" decisions.
• 7. Control systems, including materials control and equipment control.
• 8. Movement of materials between buildings, between sites.
• 9. Changes in customers' and suppliers' technology as well as firm's own manufacturing
technology and materials handling, storage, and control technology.
• 10. Design-to-cost goals for facilities
PROBLEMS
1) What criterion should be utilized to determine the optimal facilities plan?
2) Chart the facilities planning process for a company
3) Is facilities planning ever completed for enterprise? Why or why not?
