1. WHAT IS A
WORK FACILITY?
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WORK FACILITY
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Facility
design, location and organization are among the
main responsibilities of the production or
operations manager.
The production
and operations processes take place in a specially
allocated part of the organization called a
"Work Facility" or, simply,
"Facility". A facility, which
provides industrial or commercial premises for
conducting company operations, may differ in
its organizational character depending upon
the nature of the company's operations.
In a Manufacturing
Environment the facility represents a major
part of any industrial enterprise and provides
the necessary environment for various manufacturing
processes. A Manufacturing Facility
provides industrial premises where production
employees are able to convert materials into
finished products using equipment, machinery,
and tools.
In a Non-Manufacturing
Environment the facility may also represent
a major part of the business depending upon
the specific nature of operations, as outlined
below. Thus,
depending upon the nature of your business,
the Operational Facility may require
the bulk of your financial resources, utilize
most of the physical assets, and often employ
the majority of your company's employees.
Furthermore,
the facility represents a special system which
has to operate continuously within the larger
organizational structure and in conjunction
with such essential functions as general administration,
human resources, finance and accounting, marketing
and sales.
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2.
IMPORTANCE OF A WORK FACILITY
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IMPORTANCE
OF A WORK FACILITY IN VARIOUS TYPES OF OPERATIONS
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No.
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Details
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1
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A
Wholesaler.
A wholesaler
may use most of the company's facilities
for operational needs, whereby merchandise
is stored in various convenient locations.
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2
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A
Retailer.
A retailer
may use large portion of its facilities
for the actual retail space, while smaller
portion may be allocated to store the merchandise.
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3
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A
Service Provider.
A service
provider may use most of the company's facilities
for operational needs where customers can
be served efficiently.
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4
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A
Project Management Company.
A project
management company may use most of its facilities
for office space where the project design
takes place.
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5
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A
Contractor.
A contractor
may need small facility to accommodate the
company's office needs and a larger
facility to store equipment and materials.
The other part of the contractor's business
may be carried out at the customers' premises,
thereby reducing the need for a large facility.
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3.
FACILITY DESIGN
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FACILITY
DESIGN
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At
times operational activity starts with
Facility Design and selection of a suitable
location. One important aspect of facility
design is determining the size of the commercial
or industrial organization.
A common approach
to the determination of size is to establish
what size of the organization, using the existing
resources, operational methods, and organizational
ability, will produce goods or services at
the lowest unit cost.
A preliminary
study is usually helpful in determining the
Facility Design Parameters, as outlined
below. All of these design parameters
should be evaluated by management and summarized
in accordance with the overall long-term objectives
of the company. There are a number of essential
considerations related to facility design
and development which should be taken into
consideration, as outlined below.
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FACILITY DESIGN PARAMETERS
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No.
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Details
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1
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Accommodation
required at present.
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2
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Accommodation
required in the future.
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3
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Facilities
required in the building.
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4
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Quality
of the building.
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5
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Details
of the proposed site.
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6
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Budgetary
limitations.
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7
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Final completion
date.
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ESSENTIAL
CONSIDERATIONS RELATED TO FACILITY DESIGN
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No.
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Details
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1
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Number of
floors.
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2
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Access to
facility.
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3
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Technological
process requirements.
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4
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Weight and
size of equipment and products.
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5
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Material
handling requirements.
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6
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Service
requirements.
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7
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Illumination.
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8
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Heating
and ventilation.
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9
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Noise, pollution
and waste disposal.
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10
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Administrative
office requirements.
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11
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Receiving,
storage, and distribution of materials.
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12
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Safety considerations.
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4.
FACILITY LOCATION
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FACILITY LOCATION
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In order to prepare the final blueprint
of the facility design it is necessary to
consider and select an appropriate location
of the new facility. There are no set
rules applicable to selection of Facility
Location, but there are a number of
Location Factors which may influence the
decision and should be taken into consideration,
as outlined below. (1)
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FACILITY LOCATION FACTORS
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Inter-Company Integration.
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If the new
facility is a part of a larger group of
companies it is essential to ensure sufficient
integration of such a facility within the
group's total organizational structure.
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Availability And Cost Of Labor.
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It is necessary
to assess the availability and cost of labor
in the proposed facility location area.
Skilled labor is not always available in
every location.
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Availability And Cost Of Services.
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It is necessary
to examine the availability and cost of
such services as electricity, water,
gas, plumbing, and disposal of waste. Various
manufacturing processes may require
these services to a greater or lesser extent.
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Availability And Cost Of Materials.
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It is necessary
to ensure that all materials are available
for timely delivery to the facility.
A location near main suppliers may reduce
delivery costs and allow more efficient
liaison between the company and suppliers.
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Availability Of Transport.
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It is necessary
to ensure that transport is available for
company employees to reach the facility
at prescribed time. In addition, it is important
to have adequate goods transportation facilities
to accommodate shipping and receiving requirements.
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Availability Of Car Parking Space.
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It is necessary
to assess the number of vehicles which may
be used by company employees and to ensure
that a sufficient space will be available
for parking.
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Expansion Potential.
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It is necessary
to evaluate long-term planning requirements
of the organization and to ensure that the
size of the site will allow expansion of
the facility if it is required in the
future.
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Zoning And Legal Regulations.
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It
is essential to examine local zoning regulations
which control the types of businesses that
are allowed to operate in certain areas.
State and federal requirements pertaining
to issues such as air and noise pollution,
disposal of waste, and effluence should
also be examined.
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The Cost Of Land.
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It is necessary
to assess the total cost of the industrial
land required by the new facility development.
This factor plays a particular role in
the location selection process and depends
substantially on the company's immediate
financial resources and future prospects.
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New Development Areas.
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Federal,
state, and local authorities sometimes offers
special subsidies, low interest loans, grants,
and low rentals in order to develop new
industrial areas.
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Living Conditions.
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It is necessary
to consider existing housing facilities,
shops, services, entertainment, and safety
of employees. Availability of acceptable
living conditions will enhance the company's
ability to attract employees.
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DIFFERENT DEGREES OF IMPORTANCE OF THE FACILITY
LOCATION
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Selection
of a facility location requires a comprehensive
examination of the aforementioned Location
Factors. These
factors may have a different degree of influence
depending on the specific type of operation.
Retailers,
wholesalers, and service companies, for example,
place higher importance on the external appearance
of the facility since their operations involve
direct contact with consumers.
Manufacturing
companies have less contact with customers
and therefore place a higher priority on the
actual cost of the facility and the related
operating costs.
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5.
THE POINT-RATING METHOD
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THE POINT-RATING METHOD
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Production
facility location factors may be evaluated in
different ways. A simple and practical
approach is the Point-Rating Method.
This method
entails an examination of the importance of
each factor in the location selection process.
Each Location Factor is assigned a
relative weight out of a maximum number
of possible points, usually 100. Thereafter,
a potential location is evaluated according
to every factor considered by management. A
number of points is assigned to each factor
and the location which scores the highest number
of points is subsequently selected as the most
suitable one.
The Point-Rating
Method is illustrated in the example below.
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6.
SMALL BUSINESS EXAMPLE:
SELECTION OF FACILITY LOCATION
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It is apparent in this example that Location
B with 700 points is more
suitable than Location A with 510
points. It is important, however,
for management to consider all location factors
before making a final decision.
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7.
FACILITY ORGANIZATION
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FACILITY
ORGANIZATION
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The next stage in the facility development
process necessitates creation of a comprehensive
organizational structure in accordance with
the overall objectives of the company.
The process of
Facility Organization, therefore, represents
an important task of production or operations
management and entails formulation of several
issues, as outlined below. (2)
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FACILITY
ORGANIZATION ISSUES
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No.
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Details
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1
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Nature of
facility organizational activities.
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2
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Functions
under which these activities are to be carried
out.
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3
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Positions and
titles assigned to these functions.
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4
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Production
employees who occupy positions indicated by
the assigned titles.
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5
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Range of individual
authority and responsibility of production
employees.
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6
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Framework
of relations among production employees.
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7
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Coordination
of activities and timing performance of production
employees.
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8.
PRINCIPLES OF AN INDUSTRIAL ORGANIZATION
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INDUSTRIAL
ORGANIZATION
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Industrial Organizations usually start
small and undergo gradual expansion. In the
beginning, one person generally has all the
authority and responsibility for production.
The entire operation centers in and around that
individual. As the company grows, this
centralization of operations and control becomes
ineffective and duties must be delegated. The
organization and management are expanded to
handle the increased coordinating and directive
decisions.
The process of
facility organizational development entails
determination of authority, responsibility,
and duties of production managers, supervisors,
and their subordinates. Authority,
Responsibility,
and Accountability should be assigned
to employees in an orderly manner and in accordance
with principles of sound industrial organization.
These principles are an integral pat of a Management
Structure, and have been discussed earlier
in Tutorial 1 and are outlined below.
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PRINCIPLES
OF SOUND INDUSTRIAL ORGANIZATION
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No.
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Details
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1
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Separation
of functions within the production facility,
e.g. production manager, foreman, laborer.
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2
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Arranging functions
in a logical manner to avoid overlapping or
potential conflict and to ensure that
each employee receives an order only from
one supervisor.
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3
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Clear distinction
between line and staff functions and positions
within the production facility.
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4
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Clear job
descriptions and job specifications related
to each job to avoid divided responsibility
and possible confusion in the workplace.
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5
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Appropriate
allocation of authority, responsibility, and
accountability to each employee within the
production facility.
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6
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Competent
selection of suitable employees to perform
various tasks within the production facility.
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9.
ALLOCATION OF AUTHORITY, ACCOUNTABILITY AND RESPONSIBILITY
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ALLOCATION OF AUTHORITY, ACCOUNTABILITY AND
RESPONSIBILITY
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Authority, Responsibility,
and Accountability should be allocated
to employees to ensure a functional work division
within the facility. The
Work Division
approach is very useful in assigning a range
of duties, responsibilities, and accountability
to supervisors and operators within the production
facility. Work division among employees is
important for several reasons, as outlined
below.
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REASONS
FOR WORK DIVISION IN THE PRODUCTION FACILITY
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No.
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Details
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1
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High volume
of work in the production facility.
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2
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Broad range
of experience and knowledge requirements
by supervisors and operators.
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3
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Different
types of skills and capabilities requirements
by supervisors and operators.
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A typical
example describing various degrees of responsibility
and corresponding duties in a manufacturing facility
are illustrated below.
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ALLOCATION
OF DUTIES IN THE PRODUCTION FACILITY
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Degree
Of Responsibility
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First
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Second
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Third
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Fourth
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Position
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President
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Production
Manager
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Foreman
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Laborer
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Range
Of Duties
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General
management administration policies and managerial
control
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General
control of production operating control of
performance
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Detailed
control of production operating control of
performance
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Execution
of an allocated job
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Production
and operations facility organizational issues related
to the Just-In-Time
Methodology will
be discussed later in Tutorial 4.
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10. FOR SERIOUS BUSINESS
OWNERS ONLY
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Reprinted
with permission. |
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