Changing the layout of the plant is frequently considered as the best solution to operational problems. However, often it is not the solution, and other improvement projects, if properly selected, bring a higher return for the effort. Therefore, before going to the expense and interruption of a layout changeover, look around the organization and ask yourself some questions.
1 Sales and marketing
Is distribution appropriate and is marketing in line with overall goals?
Since this column focuses more on operational issues we will go no further on this point, other than to point out that shortcomings in this area cannot be compensated for even with the best layout. If major changes are expected on the sales side of the organisation, they should be at least defined before changing the layout. Operations should follow sales.
2 Management team
Is the management team complete? Does it have the required competence and the right motivation
Having gaps in this most important category has a much bigger impact on the bottom line and the long-term survival of the company than, for example, reducing the transport distance between machines. Of course if you have a bad layout and material flow, as well as big gaps in your management team, you should address both. In the case of smaller, owner-operated companies where you cannot do both at the same time, addressing the gaps in the management team should be addressed first.
3 Procurement
Is your procurement strategy coordinated?
Efficient procurement is more than ‘a dollar saved is a dollar earned.’ All the savings go right to the bottom line, so your procurement strategy needs to be in line with your overall operations strategy. In a time of ever-increasing outsourcing, you need to pick the right items to outsource. Having an efficient costing model and accurate costing data will guide you into the right decision-making.
4 Product engineering
Are your products engineered for ease of manufacturing?
It is not enough to have a product developed for marketing and sales. It also needs to fit into the process chain and organization of your factory. Products with no commonality to the rest of the product offering might cause unexpected problems and extra cost. Producing products with significantly different quality requirements in the same production facility will cause confusion and additional costs. Increasing the raw material variety or increasing design details might not show up in the standard product costing, however it will create additional ‘headaches.’ I am not saying that you should produce only what is simple to achieve. I am saying that you should be aware of the potential impact these changes and variations may have. If the plant can master it, but not the competition, you have the advantage.
5 Support systems
Are you bringing the right information efficiently and quickly to the right place?
Too often we see the order book sufficiently full, but there are no orders ready for manufacturing. The orders have been accepted, however, operationally and technically they are incomplete. They are stuck in engineering. Improving the layout in such a company would not provide real benefit. The work would be done quicker and the ‘waiting-for- information-time’ would increase. Cleaning up the front-end processes and implementing or fine-tuning order entry software are the types of projects with a high potential return and impact. Sometimes, relatively simple projects such as fixing inaccurate bill of materials can make the operation run much smoother.
6 Manufacturing model
Do you use the appropriate manufacturing model?
Not having the parts ready for assembly/packing when required is a typical symptom of using the wrong model. For example, orders are of ten grouped in batches for higher machine efficiency. If the batches are too big (and too big could mean one week or twice per week batches, depending on your facility), the parts will not be arriving in time in the pre-assembly buffer. Then rush orders for late and missed parts will be interrupting the planned sequence and adding to the storage at the assembly/packing process. The productivity gains possible by having all parts available, on time and at the right place are, in most cases, much higher than a layout change could bring.
7 Technology
Are there gaps in the currently installed technology?
Would one or a few simple specific machines have a positive impact on the overall performance?
Based on our experience, some equipment increasing the flexibility on the shop floor often has a significant overall impact. Asking the machine suppliers to propose improvements, visiting tradeshows or networking with friendly industry colleges may provide you with solutions.
8 Machine maintenance
Is the machine up-time at an acceptable level?
We are all striving toward lower inventory levels and less work-in- process. However, as we fine-tune, some of the operations become more sensitive to machine breakdowns. A systematic approach to preventative maintenance, predictive maintenance or total equipment maintenance will have a big influence on the operations performance. The investment strategy needs to include securing machine up-time.
9 Workplace design
Are the individual work- places trimmed for efficiency and safety?
Even when it is not time for a major overhaul of the plant layout, a number of details can be improved at any time. This point extends from such ergonomic workplace dimensions as table height to the availability of tools and set-up plans to scissor lifts and in-feed tables.
10 Human capital
Are we using all existing employees to the fullest possible extent?
The lean manufacturing philosophy, continuous improvement method, such quality systems as ISO 9000, WoodMark, Six Sigma, and my favorite, 5S, are all methods to use existing resources within the operation and to bring positive change. The 5S method, for example, is a systematic approach to housekeeping and, in my opinion, a prerequisite to any higher level of change. You do not need capital or extensive training for your staff to clean up. What is needed is management commitment and discipline. Once the organization realizes how much easier everything goes with management commitment and discipline, every other improvement project will flow more easily. There are many improvement projects available in each operation. In a world of limited resources you need to select the most urgent ones and the ones with highest impact (Theory of Constraints), and then somewhere in the list of priories there might also be a layout change.
Layout change
If you have looked at the 10 questions above and you are comfortable that the layout change will give you the best return, I will not hold you back. For designing the right layout you should not just look at the immediate needs, but also consider the strategic needs for the future. To build more flexibility for product variation, ability to run smaller batch sizes and aiming for faster production throughput time have proven save bets in many cases.
