OPERATIONS

MANAGEMENT
PRINCIPLES:
FACILITY
LAY-OUT AND
FORECASTING

Marc Louie M. Almario, RND, EnP, MPA

Municipal Government of Rizal, Laguna

DPA 601: Topic 3 &

Learning Outcomes:

• Define facility layout and

forecasting;
• Determine the effects of facility
layout and forecasting in
productivity through presentation
of related researches;
• Relate concepts and learnings into
our own individual workplace.
What is Facility Layout?
• Facility layout is the physical
arrangement of all resources that
consume space within a facility.
This resources might include a
desk, a work center, a cabinet, a
person, an entire office or even a
department.
• The arrangement of resources in a
facility can significantly affect the
productivity of a business or
workplace.
Lay-out designs are important as:

1. Substantial investment of time

and money is required;
2. Involve long-term commitments,
which makes mistakes difficult to
overcome; and
3. Have significant impact on the
cost and efficiency of operations.
 Facilitate attainment of product service quality.

OBJECTIVES OF LAYOUT
Use workers and space efficiently.

DESIGN
Avoid bottlenecks.

Minimize materials handling costs.

Eliminate unnecessary movements of workers and materials.

There are four basic layout types:
• Process layout
• Product layout
• Hybrid layout
• Fixed Position Layout
There are four basic layout types:
Process layouts or non-repetitive layouts have resources
• Process layout grouped based on similar processes or functions. This type
of layout is seen in companies with intermittent processing
• Product layout systems.
• Hybrid layout
A hospital is an example of process layout. Departments are
• Fixed Position Layout grouped based on their function, such as cardiology,
radiology, laboratory, oncology, and pediatrics. The patient,
the product in this case, is moved between departments
based on his or her individual needs.

A university is another example. Colleges and departments

are grouped based on their function. You, the student, move
between departments based on the unique program you
have chosen.
There are four basic layout types:
Product layouts or repetitive layouts are those that
• Process layout have resources arranged in a straight-line fashion to
• Product layout promote efficient production. They are called product
layouts because all resources are arranged to meet the
• Hybrid layout production needs of the product. This type of layout is
• Fixed Position Layout used by companies that have repetitive processing
systems and produce one or a few standardized
products in large volume.

Examples of product layouts are seen on assembly

lines, in cafeterias, or even at a
car wash. In product layouts the material moves
continuously and uniformly through
a series of workstations until the product is completed.
• Process layout
• Product layout
• Hybrid layout
• Fixed Position Layout
There are four basic layout types:
Hybrid layouts combine aspects of both process and
• Process layout product layouts. This is the case in facilities where part
• Product layout of the operation is performed using an intermittent
processing system and another part is performed using
• Hybrid layout a continuous processing system.
• Fixed Position Layout
Hybrid layouts are often created in an attempt to bring
the efficiencies of a product layout to a process layout
environment. To develop a hybrid layout, we can try to
identify parts of the process layout operation that can
be standardized and produce them in a product layout
format. One example of this is called group technology
(GT) or cell layouts.
There are four basic layout types:
• Process layout A fixed-position layout is used when the product is
large and cannot be moved due to its size. All the
• Product layout
resources for producing the product—including
• Hybrid layout equipment, labor, tools, and all other resources—have
• Fixed Position Layout to be brought to the site where the product is
located.

Examples of fixed-position layouts include building

construction, dam or bridge construction, shipbuilding,
or large aircraft manufacture. The challenge with a
fixed-position layout is scheduling different work crews
and jobs and managing the project.
There are four basic layout types:
• Process layout A fixed-position layout is used when the product is
large and cannot be moved due to its size. All the
• Product layout
resources for producing the product—including
• Hybrid layout equipment, labor, tools, and all other resources—have
• Fixed Position Layout to be brought to the site where the product is
located.

Examples of fixed-position layouts include building

construction, dam or bridge construction, shipbuilding,
or large aircraft manufacture. The challenge with a
fixed-position layout is scheduling different work crews
and jobs and managing the project.
 The design of process layouts requires
the following information:
Designing Process Layouts 1. A list of departments or work centers
to be arranged, their approximate
There are three steps in designing process layouts: dimensions, and the dimensions of
the building or buildings that will
house the departments.
2. A projection of future work flows
• Gather Information. between the various work centers.
Step 1 3. The distance between locations and
the cost per unit of distance to move
loads between locations.
• Develop a block plan or 4. The amount of money to be invested
Step 2 schematic of the layout. in the layout.
5. A list of any special considerations
(e.g., operations that must be close to
each other or operations that must be
• Develop a detailed layout. separated).
Step 3 6. The location of key utilities, access
and exit points, loading docks, and so
on, in existing buildings.
Forecasting
• is a statement about the future. It is estimating future event
(variable), by casting forward past data. Past data are systematically
combined in predetermined way to obtain the estimate. Forecasting
is not guessing or prediction.

• Forecasting help managers to:

• Plan the system
• Plan the use of system
Forecasting
Common features of forecasting:

1. Forecasting is rarely perfect (deviation is expected).

2. All forecasting techniques assume that there is some degree of
stability in the system, and “what happened in the past will
continue to happen in the future”.
3. Forecasting for a group of items is more accurate than the forecast
for individuals.
4. Forecasting accuracy increases as time horizon increases.
Forecasting
Elements of good forecast:

Timely: Forecasting horizon must cover the time necessary to implement

possible changes.
Reliable: It should work consistently.
Accurate: Degree of accuracy should be stated.
Meaningful: Should be expressed in meaningful units. Financial planners
should know the cost needed, production should know how many units to be
produced, and schedulers need to know what machines and skills will be
required.
Written: to guarantee use of the same information and to make easier
comparison to actual results.
Easy to use: users should be comfortable working with forecast.
Forecasting
Steps in forecast development:
1. Determine purpose of forecast.
2. Establish a time horizon: time limit, accuracy decreases with
3. shorter durations.
4. Select forecasting technique.
5. Gather and analyze data.
6. Prepare the forecast.
7. Monitor forecast.
References
• Reid, R. and Sanders, N. (2011). Operations Management: An
Integrated Approach. John Wiley & Sons, Inc.: USA.

• Stevenson, W. (2012). Operations Management, 11th ed. McGraw-Hill:

New York.