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LEAN LAYOUT: GETTING IT
By David Dixon (as printed in Fabricating and Metalworking)
Our last three columns have attempted to first convince the job
shop owner that lean principles and techniques do, in fact, have
applications in a low volume, high variety manufacturing environment.
Second, we offered some ideas on how to lead your organization along
the continuous-improvement path. And last month, we suggested an
approach to dealing with the ever-present resistance to change that
accompanies every lean implementation.
With this background, this month's article will take a deeper dive
into the detail of developing world-class/lean capabilities. Specifically,
we will discuss the importance of organizing factory layouts to
support lean objectives and outline an approach to creating an optimal
How Layout Supports Lean
The job-shop owner or manager who embraces lean has learned that
the lean tool kit and culture enables the most effective response
to the growing demand for more frequent deliveries of very small
lots of high-quality parts at lower cost.
The hierarchy the diagram indicates is somewhat (but not exactly)
related to the order in which the tools are applied. Certainly the
identification and mapping of the company's value streams is a vital
first step. Analysis of the value streams helps to identify pockets
of waste and suggests opportunities for focused improvement activities.
And as understanding of all of the value streams, and their interrelationships,
increases, the need to physically reorganize the facility to "lean
out" our processes becomes evident.
At the same time, growth capability will be tied to the capacities
designed into the value streams, as determined by market-driven
takt times. This may require new equipment and space, which must
be strategically located.
Eventually, opportunities to better rationalize process flows and
the need to position new capacity to support growth expectations
compels a rethinking of the macro-layout plan. Only when the layout
is optimized do we see the full benefits of lean—we have to
get it right.
One reason for this is that a properly designed layout is the means
by which we physically isolate our value streams. In other words,
we co-locate elements of a process that allow us to better meet
the demands of a market segment (or customer group). This, in turn,
allows us to focus a group of people on more perfectly meeting the
needs of a sub-set of the customer base. We often refer to this
action as recreating the "Mom and Pop shop" or setting
up the "shop within the shop" with all of their respective
Another benefit of the "shop within the shop" is that
it fosters a climate of high performance and continuous improvement.
People in close proximity to one another are better able to schedule
and balance work loads, measure performance, prevent or solve problems
and make decisions. At its best, this is the epitome of a lean culture.
Finally, a fully rationalized layout, along with an aggressive
5S program, provides the "look and feel" of a world-class
facility. It can be a tremendous marketing tool.
Developing the Lean Layout
Before plunging into the technical aspects of a facilities design,
it is very important to examine and document the strategic needs
of the business. Critical questions will include:
What markets, customer groups or accounts will we sell to? What
services will we sell? What quality, deliver, flexibility and cost
targets will we have to meet? What rate of growth do we expect?
The answers to these questions will precipitate another round of
inquiry: What new process or information technology will we need?
How much capacity must we add and where? What new skill sets will
be required? What will we make and what will we buy?
Documenting the answers to these and probably many other strategic
questions provides the foundation for a successful layout project.
Rearrangement, space additions and relocations entail large capital
investments. Careful attention to the direction given to the layout
team will ensure that the facility supports the needs of the business
while minimizing the cost of implementation.
Layout Approach. Creating the layout is a complex task involving
multiple and often iterative steps. Here, we offer a brief outline
of the approach.
Step 1. Identify and map the value streams. This will involve
an analysis of products, parts, quantities (takt times) and routings.
From this analysis we group parts or products into families that
are similar with respect to the processes that are required to
produce them. Some steps in the manufacturing process may have
to be done on a shared resource, which is considered a part of
multiple value streams. We then map all of the value streams,
including the shared resources, as a primary input to the layout
Step 2. Identify alternative process technologies. At this stage,
we incorporate new process technology or equipment that is required
for added capacity. We also seek "right sized" equipment
alternatives that will make the value streams more independent
or flexible. The value streams are finalized at this point.
Step 3. Develop the block layout. Now, we attach space requirements
to the value streams—cells, shared resources and support
areas (e.g., maintenance, Q.C., shipping and receiving). We then
do a quantitative analysis of material-flow intensity and other
factors that drive "closeness" requirements between
activity areas. We use relationship diagrams and other techniques
to generate multiple alternatives for a block-level (macro) layout
plan. The alternatives are evaluated and the preferred plan is
selected for detailing. All this ensures that the macro-layout
Step 4. Detail the layout. We are now prepared to position equipment,
workstations and other details on the layout. Engaging operators,
lead people and supervisors in this process is important. If we
are just relocating an area, they will help to get everything
in the right place. If we are creating a new process area (e.g.,
a first-time cell), they will come to understand the purpose of
the change and assist in making the experiment a success.
The importance of the layout in achieving lean, small-lot production
cannot be overemphasized. By minimizing transportation and lost
motion, productivity is greatly improved, and we facilitate the
continuous-improvement culture at the same time. But as with many
lean tools, successful application depends on a good understanding
of the techniques and careful use of the layout planning methodology.
Because of the costs involved, we cannot afford to ricochet off
of the layout-planning task.
One final benefit: A well-engineered and well-documented layout
can be a vital part of the future vision for the company.
Posted up for everyone to see, it becomes a guidepost for sequencing
and timing the execution of value-stream implementation and many
associated improvement activities.