The objective of layout strategy is to

develop an effective and efficient layout

Layout that will meet the firm’s competitive
strategy requirements
 Higher utilization of space, equipment,
and people
Improved flow of information,
materials, and people
Layout design
must achieve Improved employee morale and safer
the following: working conditions
Improved customer/client interaction
Flexibility
 (1) Office layout
(2) Retail layout
(3) Warehouse layout
Types of
(4) Fixed-position layout
layout
(5) Process-oriented layout
(6) Work-cell layout
(7) Product-oriented layout
 This requires the grouping of workers,
their equipment, and spaces to provide
for comfort, safety, and movement of
information
Office layout
Relationship
chart
 VALUE CLOSENESS
A Absolutely necessary
E Especially important
I Important
Relationship O Ordinarily important
chart U Unimportant
X Not desirable
 Proximity – spaces should naturally
bring people together
Privacy – people must be able to
control access to their conversations
Physical and
Permission – the culture should signal
social aspects
that non-work interactions are
encouraged
 Based on the idea that sales and
profitability vary directly with customer
exposure to products

Retail layout The objective is to maximize

profitability per square foot of floor
space
 1) Locate the high-draw items around
the periphery of the store
2) Use prominent locations for high-
impulse and high-margin items
Retail layout 3) Distribute what are known in the
trade as “power items” to both
sides of an aisle and disperse them
to increase the viewing of other
items
 4) Use end-aisle locations because
they have a very high exposure rate
5) Convey the mission of the store by
carefully selecting the position of
Retail layout the lead-off department
 Servicescapes describes the physical
surroundings in which the service is
delivered and how the surroundings
have a humanistic effect on customers
and employees
Retail layout
a) Ambient conditions
b) Spatial layout and functionality
c) Signs, symbols, and artifacts
Abaca
Restaurant
Lantaw
SaveMore
McDonald’s
 Servicescapes describes the physical
surroundings in which the service is
delivered and how the surroundings
have a humanistic effect on customers
Warehouse and employees
layouts a) Ambient conditions
b) Spatial layout and functionality
c) Signs, symbols, and artifacts
 a) Cross-docking
b) Random stocking
c) Customizing
Warehouse
and storage
layouts
 The project remains in one place and
workers and equipment come to that
one work area

Fixed layouts
 It can simultaneously handle a wide
variety of products or services
Flexible in equipment and labor
Process- assignments
oriented Good for handling the manufacture of
layouts parts in small batches

General-purpose use of equipment

 𝑛 𝑛

𝑚𝑖𝑛𝑖𝑚𝑖𝑧𝑒 = ෍ ෍ 𝑋𝑖𝑗 𝐶𝑖𝑗

𝑖=1 𝑗=1
Designing a
process-
oriented 𝑛 total number of work centers
layouts
𝑖, 𝑗 individual departments

𝑋𝑖𝑗 number of loads moved from

department 𝑖 to department 𝑗
 It reorganizes people and machines that
would ordinarily be dispersed in various
departments into a group so that they
can focus on making a single product or
a group of related products
Work cells
 Walters Company management wants
to arrange the six departments of its
factory in a way that will minimize
interdepartmental material-handling
Sample costs. They make an initial assumption
problem that each department is 20x20 feet and
that the building is 60 feet long and 40
feet wide. Propose a layout solution to
this problem.
 1. Reduced work-in-process inventory
2. Less floor space
3. Reduced raw material and finished
good inventories
Work cells 4. Reduced direct labor cost
5. Heightened sense of employee
participation
6. Increased equipment and
machinery utilization
7. Reduced investment in machinery
and equipment
 Product-oriented layouts are organized
around products or families of similar
high-volume, low-variety products.
Repetitive and Repetitive and continuous productions
product- use product layouts
oriented
The objective is to minimize imbalance
layout
in the fabrication or assembly line
 Assumptions:
Volume is adequate for high
equipment utilization
Repetitive and
Product demand is stable enough to
product-
justify high investment in specialized
oriented
equipment
layout
Product is standardized or
approaching a phase of its life cycle
that justifies investment in specialized
equipment
 Assumptions:
Supplies of raw materials and
components are adequate and of
Repetitive and uniform quality to ensure that they will
product- work with the specialized equipment
oriented
layout
 Fabrication line
A machine-paced, product-oriented
facility for building components
Types of
product-
oriented Assembly line
layout An approach that puts fabricated parts
together at a series of workstations;
used in repetitive processes
 The low variable cost per unit usually
associated with high-volume,
standardized products
Advantages of Low material-handling costs
product-
Reduced work-in-process inventories
oriented
layout Easier training and supervision
Rapid throughput
 The high volume required because of
the large investment needed to
establish the process
Disadvantages Work stoppage at any one point can tie
of product- up the whole operation
oriented
The process flexibility necessary for a
layout
variety of products and production
rates can be a challenge