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Factory planning
Chapter 2
Factory planning Chapter takeaways After completion of this chapter the reader would be able to 1. Appreciate, with the help of case studies, the significance of factory planning as an initial step for all startups. 2. Appreciate several characteristics of factory planning. 3. Understand and practice several tools involved in factory planning. 4. Distinguish clearly between systems engineering and factory planning.
2.1 Factory management According to Edward Buffa, factory management is a process of planning, organizing, directing, and controlling the activities of the production functions. It deals with decision making related to production processes so that the resulting goods or services are produced according to specifications in the required quantities at the scheduled times and at a minimum cost.
2.2 Factory planning Production process is the chief function of a factory, so whatever planning is required to be done in a factory before commencing the production is generally attributed as factory planning, as detailed next. Factory planning is the formulation of complete plans for the creation of goods or services. It involves the planning and determination of: 1. 2. 3. 4.
Location of the factory or the service center Design, selection, and erection of the required machinery and equipment Production processes Control systems such as G Production control G Material control
Production Planning and Control. DOI: https://doi.org/10.1016/B978-0-12-818364-9.00002-0 Copyright © 2019 BSP Books Pvt. Ltd. Published by Elsevier Inc. All rights reserved.
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Production Planning and Control
Quality control Labor control G Financial control 5. Plant layout, which involves G Layout plan of the production plant indicating the different sections of the factory G Physical arrangement of the equipment G Storage space G Supporting activities like maintenance, quality, and planning G General offices G Transport and logistic facilities G Employee facilities. G G
2.3 Characteristics of factory planning 2.3.1
Forecasting
According to Fayol, plans are the synthesis of various forecasts, whether short or long, synthetic, special or otherwise. We should adhere to prevoyance, the French word meaning foresight, forethought, providence, sight, and vision. According to a Chinese proverb, make your plans in the spring of the day (meaning early in the morning). In other words, plan early.
2.3.2
Definite purposes and goals
Every plan must be linked to the goals and must contribute in some positive way. As Goetz puts it, plans can focus attention on objectives. They can forecast which action will tend toward the ultimate objective. Managerial planning seeks to achieve a consistent coordinated structure of operations focusing on the desired ends.
2.3.3
An optimal choice among alternatives
The planning process starts and ends with selection among alternatives. Absence of alternatives results in decision making under uncertainty, in which case there is little to plan.
2.3.4
Continuous and flexible process
Planning is a continuous process. The presence of uncertainties necessitates the planner to be alert and adapt to the changing circumstances, and the plans should be provided with some form of flexibility. As Koontz and O’Donnell put it, effective planning requires continual checking on events
Factory planning Chapter | 2
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and forecasts as well as redrawing the plans to maintain a course toward the desired goal.
2.3.5
Pervasive
Planning is done by all personnel at all levels in an organization, whatever their field of activity may be. However the nature and the breadth of planning may vary depending upon the level at which the planning is done.
2.3.6
Interdependent and consistent
Planning is an interdependent and consistent process. The individual plans have considerable effect on the plans made at different fields of activity and at different levels. An optimal integration of these plans constitutes the organizational plan.
2.3.7
Time dependent
Each plan has a dimension of time, that is, it depends on the time factor as stated earlier.
2.4 The two aspects of factory planning During the World Congress on Engineering and Computer Science 2010, Benjamin Hirsch and Peter Nyhuis emphasized that “In addition to the different planning cases (new planning, rescheduling, expansion, dismantling, and revitalization), the discipline of factory planning is also implemented in the several life cycle phases of a factory (factory planning, implementation, operation, and dismantling).” There are basically two aspects of factory planning: the planning of the structural units and planning of the functional units. In the structural aspect, besides location, size, and construction factors, for example, the link to transportation, logistics, and traffic routes are the essential components. In the functional aspect, the functional relationship with other connected production facilities, employees, and resources and the engaged machinery, vehicles, and work tools as well as aspects including security, waste disposal, and environment protection are the major factors to be considered.
2.5 Definitions for factory planning Factory planning is a systematic, target-oriented process for configuring a factory, from the formulation of the targets to the ramp-up of the production. . . . The Association of German Engineers (VDI)
24
Production Planning and Control
An extensive expansion process usually necessitates relocating, redesigning or enlarging already existing factory or plant departments and areas. The special challenge in this case is that ongoing production operations have to be maintained without any interruption. To accomplish this, we develop detailed plans for the successive redesign stages and the order in which operations are moved, and undertake the planning, supervision, monitoring and project management for the relocation. . . . http://www.metroplan.com//plant_and_factory_planning.
2.6 The six stages of factory planning 1. Definition of aims, based on the conditions of the declared vision and mission, the environment, as well as the company policy. 2. Basic evaluation phase, where all the required and available data on all aspects of the production process are analyzed. 3. Concept planning, the creative step where the manufacturing resources, the staff, and the space are specified and approximate layout is conceived and developed. 4. Detailed planning, where the layout as well as all the manufacturing resourced planned in the earlier stage are concretized, that is, a concrete concept to ensure trouble-free production is developed. 5. Supervision and monitoring of execution, where all measures that contribute to stable running of the production on the planned performance level are carried out. 6. The project conclusion, which includes assessment of the factory regarding the targets designated beforehand plus the analysis and evaluation of distinctive events.
2.7 Metroplan production management Metroplan production management proposes the following to be planned in detail for a factory planning project: 1. analysis of the actual situation and development of the planning basis; 2. structuring and dimensioning of machines, systems and equipment, and production logistics; 3. determination of space requirements, personnel, and energy and media requirements; 4. planning of lean production and production logistics concepts; 5. selection of production control and scheduling strategies (pull/push principle); 6. definition of supply concepts (just in time/just in sequence, Kanban, supermarkets);
Factory planning Chapter | 2
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7. layout planning for the department and site layout in the form of an ideal layout and real layout; 8. integration planning across all subsystems and construction tasks of the plant or factory; 9. calculation of the investment requirements; profitability and economic feasibility study; 10. preparation of performance specifications and tender documents; 11. comparison of bids and assistance with the contract awarding process; 12. monitoring the implementation planning by suppliers and implementation companies; 13. implementation controlling for machinery and equipment, construction and building engineering; and 14. planning, monitoring, and controlling of factory/plant relocations and moves.
2.8 Management objectives for factory planning 1. Production objectives a. Lower labor costs, both direct and indirect b. Reduction in work stoppages and downtime c. Reduction of the processing time (the elapsed time between receipt of raw materials and flow of finished goods to the stores) d. Effective utilization of the available resources e. Reduction of inventory of the raw materials, supplies, work in progress, and finished goods f. Greater production capacity with least additional investment on facilities such as equipment, space, and labor g. Simplification of the production and material control problems and bottlenecks h. Increased flexibility in the output in terms of volume and varieties i. Lower materials handling and storage costs j. Lower plant maintenance and engineering costs k. Provision for future expansion or layout changes with minimum cost and least interruption to production 2. Labor objectives a. Better morale and lower employee turnover b. Provision of all employee facilities c. Reduction of employment and training costs 3. Market objectives a. Faster services to customers b. High customer loyalty and low customer attrition c. Adherence to commitments and delivery dates d. Availability of all required finished goods with least inventories e. Quickest communication from sales to production shops
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Production Planning and Control
TABLE 2.1 Systems engineering versus factory planning. Systems engineering
Factory planning
1
Focuses on how a complex project should be designed
Focuses on how a factory should be planned
2
Is an interdisciplinary field
Has different subdomains, such as building, media, and manufacturing system, which need to contribute to the factory planning project
3
Has issues, such as coordination of different teams
Has the role as organizer between different domains, such as production investment and process planning, and within domains, such as building
4
Deals with work processes and tools
Deals with work processes and tools for factory planning
5
Has a holistic and system life cycle view
Has a holistic view, dealing with needs and requirements from an early stage to a realized optimized factory
6
Usually needs to be represented in different models to be better understood, due to its complexity
Needs information representation and management during the whole life cycle stage of the factory to be represented in different models for a better and easier understanding and reuse
2.9 Systems engineering and factory planning To understand more about information management in the domain of factory planning on a general level, it is essential to mention the concept of systems engineering. Systems engineering is an interdisciplinary field of engineering that focuses on how to design and manage complex engineering systems over their life cycles. In this context, we can say that factory planning is a specific domain of system engineering. In Table 2.1 some examples of similarity between systems engineering and factory planning are given. Case study A small unit undertaking the servicing and repair work on screw jockeys belonging to their clients decided to manufacture these items themselves and engaged a consultant to advise them on the various procedures and processes that should be developed for the manufacture of screw jockeys as a medium-sized industry. The following details illustrate several requirements of a medium scale industry manufacturing screw jockeys as proposed and developed by the consultant. (Continued )
Factory planning Chapter | 2
27
(Continued) 1. National Small Industries Corporation (NSIC) and Small Industries Development Corporations (SIDCO) applications 2. Organizational planning 3. Selection and recruitment of personnel 4. Counseling in labor management relations 5. Plant layout for the factory a. In the existing factory b. In the new building (600 3 400 shed) to be allotted by SIDCO 6. Project planning and execution by program evaluation review technique for the new factory up to pilot production 7. Process planning for each of the 10 products, each with about four sizes 8. Design of operations 9. Machinery selection 10. Routing 11. Preparation of operation process charts 12. Preparation of process planning layouts 13. Setting up of quality standards 14. Design of gauges 15. Selection and specification of standard tooling 16. Design of jigs and special tooling 17. Establishment of production procedure and production planning and control systems and formats 18. Setting up of stores and inventory control systems, including fixation of stock levels 19. Value analysis and methods improvement studies on the existing processes 20. Setting up of standard times of all operations and production targets 21. Systems manual for the whole organization
2.10 Conclusion Factory and production planning form an integral part of a company’s added value process. If a company wants to stay ahead of the competition, its factories and production facilities should be well planned to operate at maximum technical, logistical, and organizational performance levels. This fact is emphasized in this chapter along with case studies to illustrate the significance of factory planning as an initial step for all startups.
Further reading 1. Proceedings of the World Congress on Engineering and Computer Science, Chennai, India, 2010. 2. Consultancy Project Report by the author to M/s Vanjax, an Indian Startup Company Based in Chennai, India, 1986.
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Production Planning and Control
Criteria questions (The figures in the bracket provide a clue to the answer.) 1. What is the context of factory planning? (2.2) 2. What are the activities in the context of factory planning? (2.3) 3. Discuss the six stages of factory planning. (2.6) 4. What is the information needed in the activities? Which data and what representation is required for this information? (2.8) 5. How should factory planning data be represented, applied, managed, and exchanged? (2.9)
Factory planning Chapter takeaways After completion of this chapter the reader would be able to 1. Appreciate, with the help of case studies, the significance of factory planning as an initial step for all startups. 2. Appreciate several characteristics of factory planning. 3. Understand and practice several tools involved in factory planning. 4. Distinguish clearly between systems engineering and factory planning.
2.1 Factory management According to Edward Buffa, factory management is a process of planning, organizing, directing, and controlling the activities of the production functions. It deals with decision making related to production processes so that the resulting goods or services are produced according to specifications in the required quantities at the scheduled times and at a minimum cost.
2.2 Factory planning Production process is the chief function of a factory, so whatever planning is required to be done in a factory before commencing the production is generally attributed as factory planning, as detailed next. Factory planning is the formulation of complete plans for the creation of goods or services. It involves the planning and determination of: 1. 2. 3. 4.
Location of the factory or the service center Design, selection, and erection of the required machinery and equipment Production processes Control systems such as G Production control G Material control
Production Planning and Control. DOI: https://doi.org/10.1016/B978-0-12-818364-9.00002-0 Copyright © 2019 BSP Books Pvt. Ltd. Published by Elsevier Inc. All rights reserved.
21
22
Production Planning and Control
Quality control Labor control G Financial control 5. Plant layout, which involves G Layout plan of the production plant indicating the different sections of the factory G Physical arrangement of the equipment G Storage space G Supporting activities like maintenance, quality, and planning G General offices G Transport and logistic facilities G Employee facilities. G G
2.3 Characteristics of factory planning 2.3.1
Forecasting
According to Fayol, plans are the synthesis of various forecasts, whether short or long, synthetic, special or otherwise. We should adhere to prevoyance, the French word meaning foresight, forethought, providence, sight, and vision. According to a Chinese proverb, make your plans in the spring of the day (meaning early in the morning). In other words, plan early.
2.3.2
Definite purposes and goals
Every plan must be linked to the goals and must contribute in some positive way. As Goetz puts it, plans can focus attention on objectives. They can forecast which action will tend toward the ultimate objective. Managerial planning seeks to achieve a consistent coordinated structure of operations focusing on the desired ends.
2.3.3
An optimal choice among alternatives
The planning process starts and ends with selection among alternatives. Absence of alternatives results in decision making under uncertainty, in which case there is little to plan.
2.3.4
Continuous and flexible process
Planning is a continuous process. The presence of uncertainties necessitates the planner to be alert and adapt to the changing circumstances, and the plans should be provided with some form of flexibility. As Koontz and O’Donnell put it, effective planning requires continual checking on events
Factory planning Chapter | 2
23
and forecasts as well as redrawing the plans to maintain a course toward the desired goal.
2.3.5
Pervasive
Planning is done by all personnel at all levels in an organization, whatever their field of activity may be. However the nature and the breadth of planning may vary depending upon the level at which the planning is done.
2.3.6
Interdependent and consistent
Planning is an interdependent and consistent process. The individual plans have considerable effect on the plans made at different fields of activity and at different levels. An optimal integration of these plans constitutes the organizational plan.
2.3.7
Time dependent
Each plan has a dimension of time, that is, it depends on the time factor as stated earlier.
2.4 The two aspects of factory planning During the World Congress on Engineering and Computer Science 2010, Benjamin Hirsch and Peter Nyhuis emphasized that “In addition to the different planning cases (new planning, rescheduling, expansion, dismantling, and revitalization), the discipline of factory planning is also implemented in the several life cycle phases of a factory (factory planning, implementation, operation, and dismantling).” There are basically two aspects of factory planning: the planning of the structural units and planning of the functional units. In the structural aspect, besides location, size, and construction factors, for example, the link to transportation, logistics, and traffic routes are the essential components. In the functional aspect, the functional relationship with other connected production facilities, employees, and resources and the engaged machinery, vehicles, and work tools as well as aspects including security, waste disposal, and environment protection are the major factors to be considered.
2.5 Definitions for factory planning Factory planning is a systematic, target-oriented process for configuring a factory, from the formulation of the targets to the ramp-up of the production. . . . The Association of German Engineers (VDI)
24
Production Planning and Control
An extensive expansion process usually necessitates relocating, redesigning or enlarging already existing factory or plant departments and areas. The special challenge in this case is that ongoing production operations have to be maintained without any interruption. To accomplish this, we develop detailed plans for the successive redesign stages and the order in which operations are moved, and undertake the planning, supervision, monitoring and project management for the relocation. . . . http://www.metroplan.com//plant_and_factory_planning.
2.6 The six stages of factory planning 1. Definition of aims, based on the conditions of the declared vision and mission, the environment, as well as the company policy. 2. Basic evaluation phase, where all the required and available data on all aspects of the production process are analyzed. 3. Concept planning, the creative step where the manufacturing resources, the staff, and the space are specified and approximate layout is conceived and developed. 4. Detailed planning, where the layout as well as all the manufacturing resourced planned in the earlier stage are concretized, that is, a concrete concept to ensure trouble-free production is developed. 5. Supervision and monitoring of execution, where all measures that contribute to stable running of the production on the planned performance level are carried out. 6. The project conclusion, which includes assessment of the factory regarding the targets designated beforehand plus the analysis and evaluation of distinctive events.
2.7 Metroplan production management Metroplan production management proposes the following to be planned in detail for a factory planning project: 1. analysis of the actual situation and development of the planning basis; 2. structuring and dimensioning of machines, systems and equipment, and production logistics; 3. determination of space requirements, personnel, and energy and media requirements; 4. planning of lean production and production logistics concepts; 5. selection of production control and scheduling strategies (pull/push principle); 6. definition of supply concepts (just in time/just in sequence, Kanban, supermarkets);
Factory planning Chapter | 2
25
7. layout planning for the department and site layout in the form of an ideal layout and real layout; 8. integration planning across all subsystems and construction tasks of the plant or factory; 9. calculation of the investment requirements; profitability and economic feasibility study; 10. preparation of performance specifications and tender documents; 11. comparison of bids and assistance with the contract awarding process; 12. monitoring the implementation planning by suppliers and implementation companies; 13. implementation controlling for machinery and equipment, construction and building engineering; and 14. planning, monitoring, and controlling of factory/plant relocations and moves.
2.8 Management objectives for factory planning 1. Production objectives a. Lower labor costs, both direct and indirect b. Reduction in work stoppages and downtime c. Reduction of the processing time (the elapsed time between receipt of raw materials and flow of finished goods to the stores) d. Effective utilization of the available resources e. Reduction of inventory of the raw materials, supplies, work in progress, and finished goods f. Greater production capacity with least additional investment on facilities such as equipment, space, and labor g. Simplification of the production and material control problems and bottlenecks h. Increased flexibility in the output in terms of volume and varieties i. Lower materials handling and storage costs j. Lower plant maintenance and engineering costs k. Provision for future expansion or layout changes with minimum cost and least interruption to production 2. Labor objectives a. Better morale and lower employee turnover b. Provision of all employee facilities c. Reduction of employment and training costs 3. Market objectives a. Faster services to customers b. High customer loyalty and low customer attrition c. Adherence to commitments and delivery dates d. Availability of all required finished goods with least inventories e. Quickest communication from sales to production shops
26
Production Planning and Control
TABLE 2.1 Systems engineering versus factory planning. Systems engineering
Factory planning
1
Focuses on how a complex project should be designed
Focuses on how a factory should be planned
2
Is an interdisciplinary field
Has different subdomains, such as building, media, and manufacturing system, which need to contribute to the factory planning project
3
Has issues, such as coordination of different teams
Has the role as organizer between different domains, such as production investment and process planning, and within domains, such as building
4
Deals with work processes and tools
Deals with work processes and tools for factory planning
5
Has a holistic and system life cycle view
Has a holistic view, dealing with needs and requirements from an early stage to a realized optimized factory
6
Usually needs to be represented in different models to be better understood, due to its complexity
Needs information representation and management during the whole life cycle stage of the factory to be represented in different models for a better and easier understanding and reuse
2.9 Systems engineering and factory planning To understand more about information management in the domain of factory planning on a general level, it is essential to mention the concept of systems engineering. Systems engineering is an interdisciplinary field of engineering that focuses on how to design and manage complex engineering systems over their life cycles. In this context, we can say that factory planning is a specific domain of system engineering. In Table 2.1 some examples of similarity between systems engineering and factory planning are given. Case study A small unit undertaking the servicing and repair work on screw jockeys belonging to their clients decided to manufacture these items themselves and engaged a consultant to advise them on the various procedures and processes that should be developed for the manufacture of screw jockeys as a medium-sized industry. The following details illustrate several requirements of a medium scale industry manufacturing screw jockeys as proposed and developed by the consultant. (Continued )
Factory planning Chapter | 2
27
(Continued) 1. National Small Industries Corporation (NSIC) and Small Industries Development Corporations (SIDCO) applications 2. Organizational planning 3. Selection and recruitment of personnel 4. Counseling in labor management relations 5. Plant layout for the factory a. In the existing factory b. In the new building (600 3 400 shed) to be allotted by SIDCO 6. Project planning and execution by program evaluation review technique for the new factory up to pilot production 7. Process planning for each of the 10 products, each with about four sizes 8. Design of operations 9. Machinery selection 10. Routing 11. Preparation of operation process charts 12. Preparation of process planning layouts 13. Setting up of quality standards 14. Design of gauges 15. Selection and specification of standard tooling 16. Design of jigs and special tooling 17. Establishment of production procedure and production planning and control systems and formats 18. Setting up of stores and inventory control systems, including fixation of stock levels 19. Value analysis and methods improvement studies on the existing processes 20. Setting up of standard times of all operations and production targets 21. Systems manual for the whole organization
2.10 Conclusion Factory and production planning form an integral part of a company’s added value process. If a company wants to stay ahead of the competition, its factories and production facilities should be well planned to operate at maximum technical, logistical, and organizational performance levels. This fact is emphasized in this chapter along with case studies to illustrate the significance of factory planning as an initial step for all startups.
Further reading 1. Proceedings of the World Congress on Engineering and Computer Science, Chennai, India, 2010. 2. Consultancy Project Report by the author to M/s Vanjax, an Indian Startup Company Based in Chennai, India, 1986.
28
Production Planning and Control
Criteria questions (The figures in the bracket provide a clue to the answer.) 1. What is the context of factory planning? (2.2) 2. What are the activities in the context of factory planning? (2.3) 3. Discuss the six stages of factory planning. (2.6) 4. What is the information needed in the activities? Which data and what representation is required for this information? (2.8) 5. How should factory planning data be represented, applied, managed, and exchanged? (2.9)