By Dave Hall

Imagine this scenario:  XYZ Widget Manufacturers, founded 20 years ago, operates out of rented warehouse space in a large industrial complex.  Business is good and XYZ expands, hiring more people, renting additional space, adding new products, and using new technologies.  Rather than reorganizing space to incorporate each new operational segment, however, the plant layout evolves irrationally as the company grows.  Top management realizes it's got a problem, but the cost of removing walls and moving equipment inhibits the adoption of a more rational plant layout.  Sound familiar?
Despite facing such problems, small manufacturers won't bother making any changes or so-called improvements unless they are fairly well assured that it will increase productivity or at least profits.  In other words, the bottom line is king.  Manufacturers may look at plant layout for any number of reasons -- new products or increased volumes leading to a need for more floor space, cost of bricks and mortar, new EPA or OSHA codes, trying to improve material flow.  But the reason for all of these comes down to increasing productivity and profits, or why bother?
You can make sense of your plant layout problems and redesign cost-effective solutions.  The key word is flow.  You start by looking at the flow of materials and determining where the flow stops and why.  Typically this means changing from a traditional batch and queue environment to one of continuous flow.  The objective is to have your plant set up to allow for continuous (or one-piece) flow and to use pull systems where one-piece flow is not possible.
On the shop floor, the flow and distance that materials must travel should be considered.  In other words, you want receiving docks at one-end and shipping docks at the other, with materials flowing from one end to the other in a straight line.  You want to avoid moving materials from functional department to functional department and looping back around to the shipping/receiving department.  Inventory storage size and locations should also be considered, as well as what type of material handling equipment will be needed, such as cranes, conveyors, and so on.
Hundreds of companies have benefited from plant layout services offered by Manufacturing Extension Partnership (MEP) centers and dozens of examples may be reviewed on the NIST-MEP web-site (see http://www.mep.nist.gov). For example, the Michigan Manufacturing Technology Center (MMTC) was able to help World Clock, a Flint, Michigan, manufacturer of decorative wall clocks and mirrors.  The company, which generates about $5 million in annual sales and employs between 100 and 150 people depending on seasonal buying trends, has grown dramatically since its founding in 1990.  As often happens, the demands of day-to-day operations were making it impossible for staff to devote time to systems updates.  After observing operations and consulting with World Clock top management, MMTC redesigned the plant layout, focusing particular attention on stock flow and inventory location.  The assembly line process flow was improved, and several new pieces of equipment were introduced along with several new product modifications.
The bottom line: production capability increased by nearly 100 percent, and floor space requirements were cut in half, with subsequent reduction in overhead.  World Clock saw a significant drop in manufacturing costs, overall improvement in production quality, with reduction in rework and decreases in inventory adjustments and lost parts.
Basically, businesses are now looking to their local MEP office to help them improve the cost effectiveness of manufacturing, warehousing, and inventory systems, etc.  The affordable manufacturing assessment evaluation proved to be extremely useful and the level of satisfaction with the MEP's work is very high.  World Clock is especially pleased with the new, more efficient plant layout and improvements they are seeing in inventory control.

A Role for Employees
While top management has the responsibility of determining the overall big pictures of how the shop floor will operate (flow), all employees should understand the concepts used to create the new layout and why they were used.  Employees on the shop floor are valuable resources for input on improvements at the work area level: parts flow, ergonomic issues, and process improvement.
This is particularly true when it comes to the basic principles of just-in-time and cellular manufacturing.  Just-in-time means getting your customer what they want when they want it.  This applies to co-workers (next process down the line), as well as external customers.  Instead of thinking of it in terms of strictly just-in-time delivery, expand your thinking to just-in-time manufacturing or make one, move one.
To accomplish this, manufacturing cells are often formed to facilitate the one-piece flow. In other words, you would use group technology, grouping together machines that make a family of similar parts.  In addition to offering smaller units of employees who can work and cross-train on different operations, manufacturing cells lower inventory levels, which decrease lead times and improve quality.  A common mistake manufacturers make is simply moving operations closer together without regard to actually establishing a one-piece flow by synchronizing the operations. Inventory between operations is still allowed to build up and any benefits of continuous-flow production are lost. Even though operations are closer in proximity to one another, they still function as isolated islands. Encouraging employee input can help avoid this problem.

Minimizing the Cost
Any business should examine carefully the costs involved in upgrading or changing operations. If you're looking at a major facility redesign, project the increase in business and revenues due to the improved ability to service customers (shorter lead times).  You also want to look at the cost savings from reduction in work-in-process inventory and quality defects caught sooner.  It's best to try to avoid a total production shut down or at least pre-plan and schedule it during customers' slow times or shut down.
Reducing batch size and making each product more frequently are low-cost changes that can yield significant benefits.  This may require moving equipment to allow for a one-piece flow between operations and reducing changeover time. Where this is not possible, consider a pull system with some type of visual signal to control production upstream. The immediate significant benefit is a decrease in lead-time.  Here's a rule of thumb: batch size is directly proportional to lead time, so cutting the batch size in half will decrease the lead time by half.  Of course you could find that you need to decrease set-up times if that was the reason batches were larger in the first place. This is where debugging and improving a process comes in.
Finally, implement changes one area at a time so you can learn and improve as you go.  Keep it simple and inexpensive until you have some successes.  Don't invest in technology unless it supports a one-piece flow environment.  Super machines can screw things up.  Some of the most powerful tools for plant layouts are not computerized and do not have bells and whistles.
For more information , contact David Hall, Manufacturing Specialist at Oregon MEP, White City Office, call (541) 826-7555 or 1-800-MEP-4MFG. Oregon Manufacturing Extension Partnership (OMEP) is a not-for-profit organization that assists small and medium-sized manu-facturers. It is affiliated with the national NIST Manufacturing Extension Partnership and Oregon Advanced Technology Consortium (OATC).