Location & Layout designs (4)

Importance of location

Helps manage changes in supply and demand

Big investment decision financially to expand capacity so its inflexibile in the short-term

Expanding too quickly or wrong location creates big financial burdens to the business

Physical infleunce

access to resources upstream (to transform) and downstream (to customers), raw materials, energy, utilities e.g. water

Transport infrastructure infleunce

Midstream (moving the resources along)

Communication links influences

Information spread across tiers

Avaliability of land property influence

Legality

Socioeconomic infleunce

local labour supply, access to market/customers, proximity to competition (unliekly needed), business environment, political dimnesions (policies)

Competitive clustering

(counter conventional infleunce) - co-locating for synergy/increase customer attraction

Pre-emptive development oppotunities

(counter conventional infleunce) - sell almost identical complimentry goals e.g. sell phones accessories near Apple store

Business relationship oppotunities

(counter conventional infleunce)

Purpose of process layouts

Help match capacity to short, mid and long-term demand

Servicescape

Environment effect on customer experience. Influences how customers behave. Position of equipment in layout, all about good flow, need space for capacity too

Fixed postion layout

Stationary, resoruces, plant and people go to the service e.g. construction site.

MPO: Project + Job

CPO: Professional services

Pros/cons of Fixed postion

Pro: high product, mixed flexibility, product/customer not moved, lots of job variety.

Cons: high unit costs, scheduling spcae/acitivities can be hard

Functional or process layout

Similar products and process needs to be grouped together, materials and custoemrs travel between resources, specialised stages and sections e.g. X-ray department

MPO: Job + Batch

CPO: Professional service + service shop

Pros/Cons to Functional layout

Pros: high product, mix flexibility, relatively robust in case of disruption, easy to supervise

Cons: low utilization (doesnt encourage customers to use all of the layout), can have high work-in-progress, complex flow.

Cell layout

Self-contained areas contain all processes to complete certain operation or service e.g. meal deal section supermarket

MPO: Batch + Mass

CPO: Service shop + mass service

Pros/Cons to Cell

Pro: can give good compromise, fast throughout, group work = good motivation.

Cons: can be costly to rearrange exisiting layout, can need more plant

Product (line) layout

all operations (MPO/CPO/IPO) follow same sequence of processes (linear) e.g. self-service cafe

MPO: Mass + continuous

CPO: SErvice shop + mass service

Pros/Cons of Line

Pros: low unit costs for high volume, oppotunities for specialization of equipment

Cons: can have low mix flexibility, not very robust in case of disruption, work is repetitive

Mixed (complex) layout

Combination of the layouts

e.g. Restaurants: fixed seating, functional kitchen, cell buffet, line self-service

Bitner 1992 - Servicescape

Ambient conditions - temp, aroma, lighting

Spatial layout and functionality

Signs, symbols and artefacts