Whether building a new plant, adding on to an existing plant or reconfiguring your existing plant layout there are important steps to take before beginning your layout.

For those that are not thinking of making changes to your plant layout because it has worked fine for the last ten years, maybe you should rethink that.  If you are doing business today in the same way you were 10 years ago you need to take a critical look at your operation—you very likely have an opportunity to improve the bottom line.

All of us face competition.  That competition might come in the form of domestic suppliers or more and more often offshore suppliers.  Understanding the customer and the customer’s focus is the first and most important step of the process of maintaining a competitive edge.  It is also one in which we enjoy, by virtue of geography, a distinct advantage over offshore suppliers.

Customers buy products because those products fit their individual needs and tastes, offer fast delivery, high quality, and are competitively priced.

No customer is interested in paying for something that does not result in a higher valued product—and that perceived value must be in the eye of the customer, not the manufacturer.

To be successful we need to first understand the customer’s desires and then focus on what we can do as manufactures to best fulfill those desires.

We also need to look at the competition.  What can we do better to respond to the customers “value model” than our competition is doing?

The same issues apply whether we are selling components into a wholesale market or finished goods into the retail market.

A plant that can efficiently produce changing products for a changing market at high quality, in short lead times at minimal cost is well positioned to win customers from the competition whether that competition is domestic or offshore.

The key to effective plant layout is in the understanding of what we must do to accomplish these goals.

It is unusual to read anything today relating to manufacturing without being confronted with terms such as lean manufacturing, cellular manufacturing, just-in-time, six sigma—the list goes on. These are not simply catch phrases from someone’s new book.  They represent manufacturing philosophies and while they vary to some degree from one another they have a common theme.  That theme is to manufacture goods in a flexible way at high quality in the shortest possible time at the lowest possible cost.

It would be a mistake to dismiss these concepts as “the latest fades”—they are not, they represent sound business practice and without looking at them, understanding them and in one form or another adopting them your future could be assured.

One of the pioneers and leaders has been Toyota and certainly the success of Toyota is one to be respected.  Taiichi Ohno, one of the developers of the Toyota Production System, believed that manufacturing was the primary generator of profit.  He also observed that as much as 95% of the manufacturing cycle was non-value added (NVA)—or waste.  Mr. Ohno defined waste in a broad sense which includes:

• Non beneficial movement of people
• Unnecessary processing
• Unnecessary movement of goods
• Waiting of people for process equipment to complete a process or cycle
• Product defects
• Over production of product without an order
• Work in Process (WIP)

The beginning of a plant layout should not begin at a CAD station.  It should begin by mapping the flow of every product you produce as it moves through your plant.  Once you have mapped the flow analyze every step of the process and determine if that step adds value.  A part passing through an edgebander is adding value to that part—the customer will pay for that process.  The labor required to load that part into the machine, unload the part and placing it back into another stack has zero value to the customer. 

This process is often called “value stream mapping”.  It is not unusual to find as much as 75% of the steps involved in producing a product are NVA.  Look at every one of these NVA steps and find ways of either eliminating or reducing them—then remap the product flow.

Batch processing continues to dominate the thinking in many of our wood working plants today.  In college, I was taught how to calculate minimum economic lot size.  Today that could be a very short chapter in the book—the answer is one.  The value of batch processing lies only in its warm familiarity.  We must look at every process as a batch size one—for as soon as we depart from that premise inventories and WIP grow, costs rise, quality suffers—and space requirements increase.

Here are some key elements to focus on when thinking about a new plant layout:

• Minimize material handling labor.
• Minimize travel distances between processes by combining operations, and creating work cells.
• Minimize storage and therefore space requirements.  There is a “law” that says that any unoccupied space will be—don’t provide the space.
• Provide an organized work area.  If it needs to be there give it a defined home. If it doesn’t need to be there get rid of it.
• Keep the layout open to maximize visibility.  Unseen problems go uncorrected.
• Maximize utilization of machines and people. Choose machines that are flexible and require minimum or zero set up time. Invest in training of your work force to best utilize those machines and be flexible in what functions they perform.
• Maintain high safety for your workers and minimize ergonomic problems.

If you are designing a new building keep in mind that the building in which you manufacture has as its primary function the provision of a controlled environment to allow manufacturing to proceed unimpeded.  It adds no value to the goods you produce—and therefore by definition does not represent a profit center.

The building design must be subservient to the manufacturing process.  As an example, receiving docks may not be located out of sight at the rear of the building—but around the building at the points of use of the goods being delivered.  Shipping docks might be more numerous to allow direct loading of product on to trucks as product is completed; forgoing the need of warehouse space of finished goods.  Remember that any movement of product between process points is NVA activity.

Whether it is a new building or your existing building the same principles apply.  Focus everything you do on flexibility of machines and workers, lot size one, minimum WIP, minimum movement of materials and minimum inventories.  Doing so will enable you to be responsive to your customer’s priorities and allow you to maximize the leverage of your greatest advantage—your proximity to the market.

This article appeared in Wood Digest Magazine June 2004