10/2/2015
The end goal of every manufacturer is to build a superior product which brings value to the customer at a reasonable cost. But, how this is accomplished relies on having an efficient and effective workflow within the plant. The process of taking in raw materials and transforming them into finished goods can be complicated, but it doesn’t have to be!
Optimizing Your Layout
The optimal layout for manufacturing space is determined by a combination of location, logistics, and product specifications. Consider the following:
· Companies either own their plant or have a long-term lease. Picking up and leaving for a “better space” is not always a viable option. This situation becomes the classic business problem of how to maximize profit under constraints. Your facility is a constraint, but profit can be maximized even with constraints.
· Logistics impact the efficiency of the production space. For instance, when a company needs a rail spur to move products into the marketplace, it usually places the shipping and receiving departments as close as possible to the rail spur for maximum efficiency.
· When product uniformity is required, using a linear or straight-line layout is best because of its simplicity. Goods are received then inventoried in the raw material warehouse. They are moved into work-in-process and upon completion moved into the finished goods warehouse or to shipping. With this set up, management can easily see where the product is in the process.
Information is Key
One overlooked aspect of production space layout relates to information system requirements. The modern business world requires real-time and accurate information. Companies dealing with major retailers and/or organizations within their supply chain are often under pressure to provide real-time order placements and inventory information. At a minimum, the ability to provide this service to a customer can be a major competitive advantage. The inability to provide it can be a death sentence.
Production space should be laid out so information gathering is simple. For example, companies that have an efficient linear floor layout can provide barcoding equipment and readers at natural “choke points” in the production process. The inventory is accounted for as it leaves one space and moves to another in a way that minimizes the amount of time spent on recording the data.
Efficiency Equals Profitability
An efficient production floor layout contributes to profitability since time spent in the production process is minimized. Frustration is reduced for staff because they spend less time searching for inventory and production mistakes and waste are minimized. With physical inventory taking less time, audit and accounting fees are reduced because of better record keeping and warehouse organization.
What Next?
Optimization of floor space utilization can be a complex and seemingly daunting problem. It is a mixture of technical knowledge and experience as the unique needs of the location, logistics and the product are determined. Many tools are available to help determine floor space maximization. To find out more about reducing waste, improving margins, streamlining processes or other business improvements, contact an MMTC business specialist today by calling 888.414.6682 or emailing inquiry@mmtc.org.
Since 1991, MMTC has assisted Michigan’s small and medium-sized businesses compete and grow. Through personalized services fitted to meet the needs of clients, we develop more effective business leaders, drive product and process innovation, promote company-wide operational excellence and foster creative strategies for business growth and greater profitability. Find us at www.mmtc.org.
Categories: Lean Principles