Facility Layout and Design

Encyclopedia of Small Business, 2nd ed., (2002)

FACILITY LAYOUT AND DESIGN

Facility layout and design is an important component of a business's overall operations, both in terms of maximizing the effectiveness of production processes and meeting employee needs and/or desires. Writing in Production and Operations Management, Howard J. Weiss and Mark E. Gershon defined facility layout as "the physical arrangement of everything needed for the product or service, including machines, personnel, raw materials, and finished goods. The criteria for a good layout necessarily relate to people (personnel and customers), materials (raw, finished, and in process), machines, and their interactions."

FACTORS IN DETERMINING LAYOUT AND DESIGN

Small business owners need to consider many operational factors when building or renovating a facility for maximum layout effectiveness. These criteria include the following:

Ease of future expansion or change—Facilities should be designed so that they can be easily expanded or adjusted to meet changing production needs. "Although redesigning a facility is a major, expensive undertaking not to be done lightly, there is always the possibility that a redesign will be necessary," said Weiss and Gershon. "Therefore, any design should be flexible.… Flexible manufacturing systems most often are highly automated facilities having intermediate-volume production of a variety of products. Their goal is to minimize changeover or setup times for producing the different products while still achieving close to assembly line (single-product) production rates." Flow of movement—The facility design should reflect a recognition of the importance of smooth process flow. In the case of factory facilities, the editors of How to Run a Small Business state that "ideally, the plan will show the raw materials entering your plant at one end and the finished product emerging at the other. The flow need not be a straight line. Parallel flows, U-shaped patterns, or even a zig-zag that ends up with the finished product back at the shipping and receiving bays can be functional. However, backtracking is to be avoided in whatever pattern is chosen. When parts and materials move against or across the overall flow, personnel and paperwork become confused, parts become lost, and the attainment of coordination becomes complicated." Materials handling—Small business owners should make certain that the facility layout makes it possible to handle materials (products, equipment, containers, etc.) In an orderly, efficient—and preferably simple—manner. Output needs—The facility should be laid out in a way that is conducive to helping the business meet its production needs. Space utilization—This aspect of facility design includes everything from making sure that traffic lanes are wide enough to making certain that inventory storage warehouses or rooms utilize as much vertical space as possible. Shipping and receiving—The J.K. Lasser Institute counseled small business owners to leave ample room for this aspect of operations. "While space does tend to fill itself up, receiving and shipping rarely get enough space for the work to be done effectively," it said in How to Run a Small Business. Ease of communication and support—Facilities should be laid out so that communication within various areas of the business and interactions with vendors and customers can be done in an easy and effective manner. Similarly, support areas should be stationed in areas that help them to serve operating areas. Impact on employee morale and job satisfaction—Since countless studies have indicated that employee morale has a major impact on productivity, Weiss and Gershon counsel owners and managers to heed this factor when pondering facility design alternatives: "Some ways layout design can increase morale are obvious, such as providing for light-colored walls, windows, space. Other ways are less obvious and not directly related to the production process. Some examples are including a cafeteria or even a gymnasium in the facility design. Again, though, there are costs to be traded off. That is, does the increase in morale due to a cafeteria increase productivity to the extent that the increased productivity covers the cost of building and staffing the cafeteria." Promotional value—If the business commonly receives visitors in the form of customers, vendors, investors, etc., the small business owner may want to make sure that the facility layout is an attractive one that further burnishes the company's reputation. Design factors that can influence the degree of attractiveness of a facility include not only the design of the production area itself, but the impact that it has on, for instance, ease of fulfilling maintenance/cleaning tasks. Safety—The facility layout should enable the business to effectively operate in accordance with Occupational Safety and Health Assocation guideliness and other legal restrictions.