Chapter 1

Introduction
• Your name
• College Year
• Why you chose IE
• You favorite hobby or activity
 Facilities Planning Defined

• Facilities planning is a complex and broad subject that cuts across

several specialized disciplines. (civil, electrical, industrial,
mechanical, etc)

• A facility could be:

● new factory
● new hospital
● School
● Bank
● Store
● existing warehouse
● assembly department
● office
● baggage department of an airport.
● Etc.

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 Facility Management:

• Coordinating the physical workplace with the people

and work of the organization integrating the
principles of business administration, architecture,
and the behavioral sciences.

• Facility management encompasses multiple

disciplines to ensure functionality of the built
environment by integrating people, place, processes
and technology.
 Facility Planning:

• the tactical day-to-day issues and not the more

macro topics addressed in SFP. It solves
problems related to specifics, such as where
individuals sit or the type of equipment
required accommodating a specific situation.
 Strategic facility Planning :

• A long-term process that can lead to better,

more proactive delivery of services from a
facility management organization to its
stakeholders.
 Manufacturing Complex

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 Manufacturing Facility layout

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 Manufacturing Facility layout
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 Manufacturing Facility layout (Food industry)
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Cultural
Center
layout

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 Office Layout

Parking Layout

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 Facilities Planning Defined (contd.)

• Facilities planning determines how an activity’s tangible fixed

assets best support achieving the activity’s objective.

• Examples:
● Manufacturing facility: how the manufacturing facility best
support production
● Airport: how the airport facility supports the passenger-
airport interface
● Hospital: how the hospital facility supports providing
medical care to patients

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 Fixed Tangible Assets

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 Facilities Planning Hierarchy

• Facilities planning:
● Facilities location
● Facilities design
● Facilities systems design
● Layout design
● Handling systems design

• Facilities planning combines the efforts to determine location

of a facility and design of it

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Facilities Planning Hierarchy (contd.)

Facilities
Location
Facility
System
Facilities Design
Planning

Facilities Layout
Design Design

Handling
Systems
Design

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 Facilities Planning Hierarchy (contd.)

• Facilities design: consists of the facility systems, the layout,

and the handling system

o Facility system – structural systems, the atmospheric systems, the

enclosure system, the lighting/electrical/communication systems, the
life safety system and the sanitation system.

o Layout – consists of all equipment, machinery, and furnishings

within the building envelope.

o Handling system – consists of the mechanisms needed to satisfy the

required facility interactions.
Material handling is very important to the facility design activity. The
choice of material handling equipment will greatly effect the
appropriateness of the facility design.

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 Facilities Planning Hierarchy (contd.)

• Which comes first, the material handling system or the

facility layout?

• BOTH! The layout and the handling system should be

designed simultaneously

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 Facilities Planning Hierarchy (contd.)
Facilities location: placement with
respect to customer, suppliers,
and other facilities with which it
interfaces.
Influences of Plant location:
● Proximity to raw material
● Markets
● Transportation systems
● Economic development programs
(financial incentives)
● Environmental consideration
● Climate
● President’s home town
● Etc.
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Significant of Facilities Planning

• The size of investment in new facilities each year.

● 8% of gross national product (GNP) in USA has been spent
annually on new facilities.

• Economic considerations
● One of the most effective methods for increasing plant
productivity and reducing cost is to reduce or eliminate all
activities that are unnecessary or wasteful.
● A facilities design should accomplish this goal in terms of
material handling, personnel and equipment utilization, reduced
inventories, and increased quality.

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 Significant of Facilities Planning (contd.)

• Employee health and safety

● Occupational Safety and Health Act: redesign facilities to
consider health and safety and to eliminate possible hazardous
conditions

2. Energy conservation
● Energy has become an important and expensive raw material

3. Community considerations:
● Fire protection, security, air pollution, noise, and the ADA
(Americans with Disabilities Act) of 1989

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Objectives of Facilities Planning

• Improve customer satisfaction by being easy to do business

with, conforming to customer promises, and responding to
customer needs.
• Increase return on assets (ROA) by maximizing inventory
turns, minimizing obsolete inventory, maximizing
employee participation, and maximizing continuous
improvement.
• Maximize speed for quick customer response.
• Reduced costs and grow the supply chain profitability

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Objectives of Facilities Planning (contd.)

• Integrate the supply chain through partnership and

communication.
• Support the organization’s vision through improved
material handling, material control, and good
housekeeping.
• Effectively utilize people, equipment, space, and energy.
• Maximize return on investment (ROI) on all capital
expenditures
• Be adaptable and promote ease of maintenance.
• Provide for employee safety and job satisfaction.

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Main Features of Successful Facilities Plan

• Flexibility:
● Flexible facilities are able to handle a variety of requirements
without being altered

• Modularity:
● Modular facilities include systems that cooperate efficiently over a
wide range of operating rates

• Upgradeability
● Upgraded facilities easily incorporate advances in equipment
systems and technology

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Main Features of Successful Facilities Plan (contd.)

• Adaptability:
● Considering the
● Calendar
● Cycles
● Peaks

• Selective operability
● Understanding how each facility segment operates
● Allows contingency plans to be put in place

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 Facilities Planning Process

• Must start at the beginning of the project

• Even though facilities planning is not an exact science, it
can be approached in an organized, systematic way.

• Types and Sources of Manufacturing Facilities Design

Projects
● New facility -
● New product -
● Design changes - of the product
● Cost reduction - better layout for better productivity and cost
reduction (Lean Thinking)

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Quiz 1

• What are the factors that help

decide the facility location?

• List
• 5 minutes
• 30 students
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 Facilities Planning Process

By applying the engineering design approach, a systematic

approach can be developed
• Define the problem
● Define (or redefine) the objective of the facility (products and
productivity levels)
● Specify the primary and support activities to be performed in
accomplishing the objective

• Analyze the problem

● Determine the interrelationships among all activities

• Determine the space requirements for all activities

● Generate alternative facilities plans

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 Facilities planning process

• Evaluate the alternatives

● Evaluate alternative facilities plans on the basis of accepted
criteria.

• Select the preferred design

● Select a facilities plan

• Implement the design

● Implement the facilities plan
● Maintain and adapt the facilities plan
● Redefine the objective of the facility

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Facilities Planning Process
Lean Thinking and Lean Manufacturing

• Lean manufacturing - a concept by which all people

work together to eliminate waste
· Overproduction
· Waiting
· Transportation
· Processing
· Inventory
· Motion
· Rework
· Poor people utilization

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 The Seven Types of Wastes
The Waste Definition
Over Production Producing more than needed or Producing faster than needed (need
storage place, can be damaged, lost, no sale)
Over processing Effort Which Adds No Value to a Product or Service. (Customers
not welling to pay for these efforts)

Inventory Any Supply in Excess. (money tied up in inventory, holding costs,

may damage or lost)
Waiting Idle Time, including man wait time and machine wait time.

Motion Any Movement of People Which Does Not Contribute Added

Value to the Product or Service.

Transportation Any Material Movement That Does Not Directly Support a Lean
Manufacturing System, or achieve direct value. (a risk of damaged,
lost, delayed, Also need assets to move such as equipments and/or
workers ).
Rework Repair of a Product or Service To Fulfill Customer requirements
(rework costs, rescheduling production)
Other Types of Wastes

The Waste Definition

Breakdown Poor maintenance
Lake of skill Unskilled workers

Unsafe work Causes lost work hours

Poor information Poor Information system, poor communication

Loss of Material If expensive

Unused Capacity (unused spaces, unused machines)

Strategic Facilities Planning

• Facilities planning is a strategic process

● Must be an integrated part of overall corporate strategy
● Every element of the organization must support the objectives of
the firm.

• Previously, strategies was restricted to marketing and

finance without clear understanding of the impact on
manufacturing or on support functions such as material
handling, information system, facilities, etc.

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Cost of design changes during a project

• Planning is a vital process

• Where in the process should we make changes?

A
m Cost of making
ou design changes
nt(
$)

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Developing Facilities Planning Strategies

• The facilities planning process can be improved in three

potential dimensions:
● Physical aspects: building, equipment, and people
● Control: material control, space control, productivity measures
● Time: for planning (sufficient lead time is needed to do it right)

• The objective is to improve on these three levels

Physical aspects

Control
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 Developing Facilities Planning Strategies

• Facilities planning should also be well defined as to how each

function fits, interacts and integrate

• Customer satisfaction

• Team work: everyone involved

• Should not accept information delays (true partnership)

• Facilities planner should be proactive, and participate in the

decision making that create the needs.
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 Quiz 2 Oct 31st

• What are the sources of information for the Facility planner?

• You have 5 minutes

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 Sources Of Information For Manufacturing Facilities
Design

• Product and process design

• Marketing
• Management policy

• Product design
● blueprints
● bill of material (part list)
● indented BOM
● buyouts/fabricate
● assembly drawings
● Part and assembly drawings are especially helpful in
visualization of how parts will fit together
● model shop samples (prototypes)
• Relationship between FD and product design is important

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Quiz 1

• mention at least three types of Waste.

Provide at least one example.

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Sources Of Information For Manufacturing Facilities
Design

• Marketing
● Volume, how many can we sell?
● Seasonality, summer or winter product
● Selling price
● Replacement parts, older products

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Sources Of Information For Manufacturing Facilities
Design

• Management policy - refers to the upper-level employees

● inventory policy (Just in Time, Kanban, WIP)
● lean thinking
● investment policy (ROI)
● startup schedule
● make or buy decision
● feasibility studies (what product or process proposal is the most
profitable for the company

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