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The facilities planning process should also be well defined as to how each function fits, interacts, and integrates. Otherwise, critical information will be lost or an important link will be missing, and all will be lost. The facilities planning process should be integrated and not allow selfishness. This includes eliminating silos and focusing all functions on customer satisfaction.

To eliminate silos, we synthesize the whole supply chain from its origination point to the ultimate customer. The result is a focus on continuous improvement. In the facilities planning process, everyone involved should understand the en- ergy of change and have a desire to harness this energy for the competitive advantage of the total pipeline.

This involves courage and innovation. By harnessing change, we can turn it into an asset. It requires true partnerships and an integration of information.

Communication is critical, robust, and simultaneous. Facilities planning should be a continuous improvement process focused on achieving total performance excellence with the objectives presented earlier.

Be- cause all parties involved in the plan focus on these objectives, facilities planning excellence will be achieved. A number of internal functional areas tend to have a significant impact on fa- cilities planning, including supply chain marketing, product development, manufac- turing, production and inventory control, human resources, and finance.

For example, facility location will be impacted by the sourcing decision of materials, and material handling will be affected by decisions related to unit volume, product mix, packaging, service levels for spares, and delivery times. Product development and design decisions affect processing and materials re- quirements, which in turn affect layout and material handling. Changes in materials, component shapes, product complexity, number of new part numbers and package sizes introduced due to a lack of standardization in design , stability of product de- sign, and the number of products introduced will affect the handling, storage, and control of materials.

Decisions concerning the global supply chain, the degree of vertical integration, the types and levels of automation, the types and levels of con- trol over tooling and work-in-process, plant sizes, and general-purpose versus spe- cial-purpose equipment can affect the location and design of facilities. Planning and inventory control decisions affect the layout and handling sys- tem.

Lot size decisions, scheduling, in-process inventory requirements, inventory turnover goals, inventory storage location in the supply chain, and approaches used to deal with seasonal demand affect the facilities plan. Human resources and finance decisions related to capital availability, labor skills and stability, staffing levels, inventory investment levels, organizational design, and employee services and benefits will impact the size and design of facilities, as well as their number and location.

Space and flow requirements will be affected by financial and human resources decisions. In turn, they have an impact on the stor- age, movement, protection, and control of material. For the facilities plan to support the overall strategic plan, it is necessary for fa- cilities planners to participate in the development of the plan. Typically, facilities planners tend to react to the needs defined by others, rather than participate in the decision making that creates the needs.

A proactive rather than a reactive role for fa- cilities planning is recommended. The model of success approach will ensure that facilities planners are on board, focusing on the overall direction of the company. Close coordination is required in developing facilities plans to support the global supply chain. Manufacturing—facilities planning and distribution—facilities plan- ning interfaces are especially important.

Five- and year technology targets should be identified and an implementation plan developed to facilitate the required evolution. By asking such questions, an uncer- tainty envelope can be developed for facility requirements. Also, in translating market projections to requirements for facilities, it is important to consider learn- ing-curve effects, productivity improvements, technological forecasts, and site- capacity limits. The following 10 issues may have a long-range impact on the strategic facili- ties plan: 1.

Centralized versus decentralized storage of supplies, raw materials, work- in-process, and finished goods for single- and multibuilding sites, as well as single- and multisite companies 3. Acquisition of existing facilities versus design of modern factories and distribu- tion centers of the future 4. Flexibility required because of market and technological uncertainties 5. Interface between storage and manufacturing 6. Control systems, including material control and equipment control, as well as level of distributed processing 8.

Movement of material between buildings and between sites, both inbound and outbound 9. Design-to-cost goals for facilities. The following actual situations are presented to illustrate the need for improved planning. The supply chains consisted of duplicate planning functions, execution systems, and facility locations. After poor performance, the manage- ment team soon began to question the rationale of the separate organizations.

Management re- ceived proposals that required approximately equivalent funding for large warehouses at two sites having essentially the same storage and throughput requirements. One system was designed for random storage, the other for dedicated storage.

The storage and through- put requirements were approximately the same for the two systems; however, different suppliers had provided the equipment and software.

Management raised the questions: Why are they different? And which is best? The amount and size of the product to be stored subsequently changed. Other changes in technology were projected. The system became obsolete before it was operational. Decisions had not been made concerning which products would be off-loaded to the new site, nor what effect the off-load would have on requirements for moving, pro- tecting, storing, and controlling material.

A subsequent analysis showed the use of an all-water route from Vietnam through the Panama Canal into the east coast of the United States to provide significant cost savings, thus making the west coast facility obsolete.

The facilities planners and architects were designing the first building for the site. No pro- jections of space and throughput had been developed since decisions had not been made concerning the occupant of the building. The throughput, storage, and control require- ments for the new customers were significantly different from those for which the system was originally designed.

However, no modifications to the system were funded. The manufacturing team designed the layout, and the architect began designing the facility before the movement, protection, storage, and control system was designed. No analyses had been performed to determine queue or flow require- ments. Subsequent analyses showed the manufacturing cells were substantially less efficient as a result of their impact on movement, protection, storage, and control of work-in-process.

The supporting distribution cen- ters required major renovation that was not considered when the shift to Thailand was made. The volume of orders received during the holiday season peak could not be processed by its distribution center. In practically every case, the projects were interrupted and significant delays were incurred because proper facilities planning had not been performed. These examples emphasize once more the importance of providing adequate lead times for planning.

The previous list of examples of inadequate facilities planning could possibly create a false impression that no one is doing an adequate planning job. Such is not the case; several firms have recognized the need for strategic facilities planning and are doing it.

A major U. Maintenance and support facilities re- quirements were analyzed for wide-body and mid-sized aircraft. The impact of route planning, mergers and acquisitions, and changes in market regions to include international flights were considered in developing the plan. The airline industry operates in a dynamic environment. Governmental regu- lations and attitudes toward business are changeable, energy costs and inflationary effects are significant, and long lead times are required for aircraft procurement.

For new-generation aircraft, an airline company might negotiate procurement condi- tions, including options, eight years before taking delivery of the airplane. The methodology contin- ues to change as technology evolves and new approaches are developed. The focus at the current time is on the customer and the view that all components of a supply chain must band together to plan the facilities that will successfully support all of the activities of the supply chain.

No longer is the focus of strategic facil- ities planning only internal. The focus now is on how our facilities planning process supports the entire supply chain from basic raw materials to the final customer. If the facilities planning process does not support the entire supply chain, it is at a dis- advantage. Other supply chains may be able to leverage themselves into an advan- tage by focusing on the customer and on the big picture, rather than simply one location or one company.

Moving forward, this focus on the entire supply chain will grow even stronger, and those companies and those supply chains that do not real- ize this fact will no longer exist. Cullinane, T. Ganster, S. Goren, W. Haselbach, L. Radford, K. Rothschild, W. Tompkins, J. Tyndall, G. White, J. Consider baseball, football, soccer, and track and field. The firm where you are interviewing is a consulting firm that specializes in problem solving for transportation, communication, and the service in- dustries.

Why would you consider these? Why or why not? Discuss the extent to which the definition applies to facilities planning. There are more critical short-term problems to be solved. The right people internally are too busy to be involved in the project. The future is too hard to predict, and it will probably change anyway.

Nobody really knows what alternatives are available and which ones might apply. Technology is developing very rapidly; any decisions we make will be obsolete before they can be implemented. The return on investment in strategic planning is hard to measure.

What are the cost and customer services implications? Determine the interrelationships among all activities. Generate alternative facilities plans. Evaluate the alternative facilities plans. Select the preferred facilities plan. Implement the facilities plan. Maintain and adapt the facilities plan.

The facilities planning process will be greatly impacted by the business strategic plan and the concepts, techniques, and technologies to be considered in the manu- facturing and assembly strategy. Among the questions to be answered before alternative facility plans can be generated are the following: 1. What is to be produced?

How are the products to be produced? When are the products to be produced? How much of each product will be produced? For how long will the products be produced?

Where are the products to be produced? The answers to the first five questions are obtained from product design, process design, and schedule design.

The sixth question might be answered by fa- cilities location determination, or it might be answered by schedule design when production is to be allocated among several existing factories. Many firms have global production strategies and utilize com- binations of contract manufacturing and contract assembly. As an example, the tex- tile industry has undergone tremendous change, with global sourcing occurring for yarn and textile production as well as for garment assembly.

Few domestic sewing operations currently exist in the United States. The automobile is another example of global sourcing, resulting in the final product being called a world car; engines, power trains, bodies, electronic assem- blies, seating, and tires are manufactured in different countries. Similar conditions exist for the production of home appliances, computers, and televisions, with sub- assemblies and components being produced around the world.

Product designers specify what the end product is to be in terms of dimen- sions, material composition, and perhaps packaging. The process planner deter- mines how the product will be produced. The production planner specifies the production quantities and schedules the production equipment. The facilities plan- ner is dependent on timely and accurate input from product, process, and schedule designers.

The success of a firm is dependent on having an efficient production system. Hence, it is essential that product designs, process selections, production schedules, and facilities plans be mutually support- ive. Figure 2. Frequently, organizations create teams with product, process, scheduling, and facilities design planners and with personnel from marketing, purchasing, and ac- counting to address the design process in an integrated, simultaneous, or concur- rent way.

Customer and supplier representatives are often involved in this process. These teams are referred to as concurrent or simultaneous engineering teams. The team approach reduces the design cycle time, improves the design process, and minimizes engineering changes. Product design. Facilities design. Process Schedule design design. Product, process, schedule, and facilities design decisions are not made inde- pendently and sequentially.

A clear vision is needed of what to do and how to do it including concepts, techniques, and technologies to consider. For example, man- agement commitment to the use of multiple receiving docks, smaller lot sizes, de- centralized storage areas, open offices, decentralized cafeterias, self-managing teams, and focused factories will guide the design team in the generation of the best alternatives to satisfy business objectives and goals and make the organization more competitive.

In the case of an existing facility with ongoing production operations, a change in the design of a product, the introduction of a new product, changes in the processing of products, and modifications to the production schedule can occur without influencing the location or design of the facility. The seven management and planning tools methodology presented in Section 2. Decisions regarding the products to be produced are generally made by upper-level management based on input from mar- keting, manufacturing, and finance concerning projected economic performance.

The facilities planner must be aware of the degree of uncertainty that exists concerning the mission of the facility being planned, the specific activities to be per- formed, and the direction of those activities [19]. As an illustration, a major electronics firm initially designed a facility for semi- conductor manufacture. Before the facility was occupied, changes occurred in space requirements and another division of the company was assigned to the facility; the new occupant of the site used the space for manufacturing and assembling con- sumer electronic products.

As the division grew in size, many of the manufacturing and assembly operations were off-loaded to newly developed sites, and the original facility was converted to predominantly an administrative and engineering site. Depending on the type of products being produced, the business philosophy concerning facilities, and such external factors as the economy, labor availability and attitudes, and competition, the occupants of a facility might change frequently or never change at all.

Decisions must be made very early in the facilities planning process regarding the assumptions concerning the objectives of the facility. If it is decided that the facility is to be designed to accommodate changes in occupants and mission, then a highly flexible design is required and very general space will be planned.

On the other hand, if it is determined that the products to be produced can be stated with a high degree of confidence, then the facility can be designed to optimize the production of those particular products. Minor changes in product design and the addition of similar products to the product family would be included in this scenario.

The design of a product is influenced by aesthetics, function, materials, and manufacturing considerations. Marketing, purchasing, industrial engineering, manu- facturing engineering, product engineering, and quality control, among other fac- tors, will influence the design of the product.

In the final analysis, the product must meet the needs of the customer. This challenge can be accomplished through the use of quality function de- ployment QFD [1].

QFD is an organized planning approach to identify customer needs and to translate the needs to product characteristics, process design, and tol- erance requirements. Benchmarking can also be used to identify what the competition is doing to satisfy the needs of customers or to exceed customer expectations [7]. It can also be used to identify best practices from the most successful organizations.

Through QFD and benchmarking, product designers can focus their work on customer needs being met marginally or not at all compared to the competition and to the best organizations.

Detailed operational specifications, pictorial representations, and prototypes of the product are important inputs for the facilities planner.

Exploded assembly drawings, such as that given in Figure 2. These drawings generally omit specifications and dimensions, al- though they are drawn to scale. As an alternative to the exploded assembly drawing, a photograph can be used to show the parts properly oriented. Such a photograph is given in Figure 2. B 11 1 — Part no. B 2 — Part no. B 3 — Part no. A 4 — Part no. A 5 — Part no. B 6 — Part no. B 7 — Part no. A 8 — Part no. A 9 — Part no. A 10 — Part no.

B 11 — Part no. Crosshatching shows portion of stock allowed for cutting. A shows part placement Material in relation to Aluminum bar stock stock cut. Detailed component part drawings are needed for each component part. The drawings should provide part specifications and dimensions in sufficient detail to al- low part fabrication. Examples of component part drawings are given in Figures 2.

The combination of exploded assembly drawings and component part drawings fully documents the design of the products. The drawings can be prepared and analyzed with computer-aided design CAD systems. CAD is the creation and manipulation of design prototypes on a computer to assist the design process of the product.

A CAD system consists of a collection of many application modules under a common database and graphics ed- itor. The blending of computers and the human ability to make decisions enables the use of CAD systems in design, analysis, and manufacturing [8].

The CAD system also can be used for area measurement, building and interior. In addition to CAD, concurrent engineering CE can be used to improve the relationship between the function of a component or product and its cost.

Concur- rent engineering provides a simultaneous consideration in the design phase of life- cycle factors such as product, function, design, materials, manufacturing processes, testability, serviceability, quality, and reliability. As a result of this analysis, a less ex- pensive but functionally equivalent product design might be identified. Concurrent engineering is important because it is at the design stage that many of the costs of a product are specified.

As a part of that determination, the process planner ad- dresses who should do the processing; namely, should a particular product, sub- assembly, or part be produced in-house or subcontracted to an outside supplier or contractor? In addition to determining whether a part will be purchased or produced, the process designer must determine how the part will be produced, which equipment will be used, and how long it will take to perform the operation.

The final process design is dependent on both the product and schedule designs. The excluded services, although needed by the community, may not be feasible for a particular hospital.

Patients requiring care provided elsewhere would be referred to other hospitals. Similarly, the scope of a manufacturing facility must be established by determining the processes that are to be included within the facility. The extremes for a manufacturing facility may range from a vertically integrated firm that purchases raw materials and pro- ceeds through a multitude of refining, processing, and assembly steps to obtain a finished product, to another firm that purchases components and assembles fin- ished products.

It is obvious that the scope and magnitude of activities within a manufacturing facility are dependent on the decisions concerning the level of ver- tical integration. Large corporations have downsized large facilities and broken them into small business units that keep only economically feasible processes that are within their core competencies. Small business units operate with low overhead, low manage- ment levels, and frequently with self-managing operator teams.

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