Productivity Improvement through Layout Redesign

A Lean Approach Case Study

Wa-Muzemba Anselm Tshibangu

and Steve Berlinski

Department of Mechanical Engineering, University of Maryland Baltimore County, 1000, Hilltop Circle,

Baltimore, Maryland 21250, U.S.A.

Department of Mechanical Engineering Technology, State University of New York /College of Technology at Alfred,

10, Upper College Drive, Alfred, NY 14802, New York, U.S.A

Keywords: Lean, Cell Manufacturing, Layout Design, Continuous Improvement.

Abstract: This paper explains how a small-size company located in the western New York region has used a lean

approach to redesign its operational layout and eliminate unnecessary transportation moves to deal with

financial turmoil and survive global competition. Although this is a true real world case study, the

company’s name is referred to as West City Vacuum Forming Inc. (WCVF Inc.) throughout the paper to

protect the company privacy as they are still in business today. A couple of years ago when WCVF Inc. lost

two of its major customers to competition and technology changes, the company sales were tragically

impacted and severe measures of cost reductions were urgently needed in order to maintain the company in

business. WCVF Inc. then decided to retrench and re-evaluate its manufacturing practices. As a result of this

self assessment effort, drastic measures including a significant downsizing of the workforce and a

consolidation of the space floor were addressed to save the company from financial turmoil. This paper

specifically analyzes the floor consolidation aspect because it resulted into a new configuration of

operational layout that improved WCVF Inc. operations, productivity, and material flow by eliminating

unnecessary transportation activities. Other benefits recorded include annual operational costs saving of

approximating $50,000 and a reduction in cycle times in the order of 4.8 days for some products,

representing a cut of 5%.

1 INTRODUCTION

In this paper, the real name of West City Vacuum

Foaming Incorporated (WCVF Inc.), the precise

location of its operations, as well as the exact

financial and/or operational figures of its

transactions are purposely altered to protect the

company business privacy. Established in the early

70s and located in the western region of the State of

New York in the US, West City Vacuum Foaming

Inc. is a small size manufacturer of vacuum foamed

and pressure formed plastic parts serving mid and

large-size companies in the general industry,

medical and transportation markets. These custom

made parts normally involve secondary CNC

machining further augmented by additional value-

added assembly work along the production lines.

WCVF Inc. mainly serves markets in the United

States and Canada, with a concentration of its

customers in the Northeastern US (New England)

and the Eastern Canada regions.

Few years ago the company lost two major

customers, one as a result of moving their

manufacturing operations abroad and the other as a

result of changing their operational technologies and

pursuing new manufacturing processes by moving

away from traditional plastic thermoforming

practices. As a consequence of these two losses,

WCVF Inc. sales were tragically impacted to the

point that severe measures of cost reduction were

imperatively needed to save the company from

financial troubles and potential bankruptcy. The

most tragic measure was the lay-off of dozens of

employees representing a significant portion of the

workforce. This measure was the fastest way to save

a large portion of cash liquid. However, downsizing

the workforce was not enough to give WCVF Inc.

the financial relief that was required to remain in

business and keep a global competitive advantage at

the same time. Another cash liquid improvement

was needed, and therefore, deep analyses of

519

Anselm Tshibangu W. and Berlinski S..

Productivity Improvement through Layout Redesign - A Lean Approach Case Study.

DOI: 10.5220/0004047705190526

In Proceedings of the 9th International Conference on Informatics in Control, Automation and Robotics (ICINCO-2012), pages 519-526

ISBN: 978-989-8565-22-8

 2012 SCITEPRESS (Science and Technology Publications, Lda.)

manufacturing practices were urgently required.

2 THE SPCIAL CASE OF WCVF

INC.

WCVF Inc. is an almost 40 year old privately owned

family business. As uncommon as this may be in the

manufacturing community, WCVF Inc. is a vertical

manufacturing facility with interrelated operations

taking place in a three floors of a four-story

building, with the fourth floor being used as a mold

and accessories storage room. The building is

facility with floor to ceiling pillars architecture.

There is one freight elevator used to move goods

between floors and also as a transportation bridge to

the second floor shipping door. This unusual vertical

operational configuration made it not only unique

but also difficult to the company to best operate

economically with respect to material flow and

equipment layout. WCVF Inc. experienced material

handling issues that resulted in large amounts of

time wasted during movement of parts between

floors, hence, occasioning long cycle and delivery

times.

3 COMPETITION AND

ECONMIC FACTORS

Competition and operation costs are the two major

factors in the manufacturing arena that have forced

most companies to reassess their way of conducting

operations. Companies are continually evaluating

their manufacturing systems in light of increasing

market competition for the purpose of growing and

in some cases simply for survival in today’s

competitive global environment (Al-Mubarak and

Khumawala, 2003).

Many firms operate at the extreme ends of Hayes

and Wheelwright’s (1984) product process matrix.

For these firms it is easy to select which plant layout

to operate under, between a job shop configuration

and a flow shop configuration. Organizations are

facing issues when they operate between these two

extremes, i.e., mid-volume with mid-variety. In

these conditions, the better option is batch

processing. However, competitive forces in both

domestic and global markets are challenging batch

processing firms to become more flexible and more

efficient at the same time (Demeyer et al., 1989). To

address this dual challenge many organizations have

found efficient to opt for cellular manufacturing. In

order to remain competitive in the business, WCVF

Inc. decided to explore lean manufacturing tools and

techniques to eliminate the waste in time generated

by the vertical operation process. Budget pressure

required the company to rethink its manufacturing

practices and reassess all the related expenses before

redesigning its overall manufacturing operations.

The economic and technical analyses performed by

the management and engineering teams concluded

that significant cost savings would be generated by

taking one or more of the following actions:

 Grinding plastic at the point of its origin: This

requires the purchase of one or more new

grinder(s).

 Consolidating all three 5-Axis CNCs to one

floor instead of having them in two different

levels in the building.

 Consolidating the business tooling engineering

operations and administrative offices with

existing manufacturing and administrative

offices in one floor.

However, it became quickly apparent that simply

shrinking space by confining machines and

workstations to one work space with no regard to

sufficient and adequate material flow improvement

was not the appropriate solution. Therefore,

arranging equipment in a positive manner with

respect to the operating areas became critically

important for the survival of the company. The

immediate solution was to eliminate one of the three

manufacturing floor spaces, and consequently save

money from the associated overhead and operational

costs, and then, consolidate all the manufacturing

operations and the administrative offices in the other

two remaining floors.

4 CELLULAR

MANUFACTURING

Cellular manufacturing has been long claimed to be

effective for reducing the adverse effects caused by

the adoption of functional layouts in job shops.

Functional layouts are formed by grouping machines

of similar functions into individual departments

(Schonberger, 1986). In traditional job shops

functional layout is adopted to increase machine

utilization. Implementing cellular manufacturing

requires the shop to be configured in cellular layouts

comprising of cells. Each manufacturing cell is

dedicated to processing a group of parts following

similar sequence, and called part family. A cellular

layout emulates repetitive manufacturing by

ICINCO 2012 - 9th International Conference on Informatics in Control, Automation and Robotics

520

allowing parts from the same family to be processed

repetitively in a cell, resulting in smoother

production flows (Jing-Wen Li, 2005).

Cellular manufacturing is known to promote

efficient production, and therefore, extensively used

in today’s practice of lean manufacturing, which

focus on the elimination of waste (known as muda in

Japanese) in a manufacturing system. In effect, the

close proximity of machines in a cellular

manufacturing layout also has an advantage of

reducing the waiting time, especially because its

configuration allows the implementation of a

practice known as operations overlapping (OPOVR)

or one-piece flow. OPOVR requires moving a part to

the subsequent workstation immediately of operation

at the preceding workstation within a cell. Exercise

of OPOVR can eliminate waiting time due to

transferring parts in batches (Schonberger, 1986;

Cheng and Podolsky, 1996) and thus create a

smoother flow of parts and enhance control.

The second aspect of manufacturing operations

in favor of several companies’ alignment towards

lean practices is the batch size. The batch size is an

important factor that directly influences the average

completion time for all parts (Shafer and Charnes,

1993). In choosing the new configuration in order to

consolidate all the workstations close to one another,

WCVF Inc. considered among other factors, the

impact of a layout change and the batch size. The

following sections describe the main steps towards

the design of the cellular manufacturing using lean

techniques including value stream mapping

procedure as conducted and performed at WCVF

Inc.

5 THE LEAN APPROACH

In a general move towards lean operations many

companies today are primarily interested in the

facility layout that could allow them to eliminate

unnecessary transportation moves considered as a

non-adding value activity (waste or muda) and that

also have the drastic consequence of impairing the

flow of material. Most of these companies operate in

environments where product demands are not

always certain or predictable. In this case, many

researchers have suggested the use of virtual

manufacturing cells as the most efficient operating

structures. In a virtual cell, machines are dedicated

to a product or a family of product as in a regular

cell, but the machines are not physically relocated

close to each other (Balakrishnan and Cheng, 2004).

For companies like WCVF Inc., operating on a

low volume with a high variety of products, it is

advantageous to operate in a virtual cell than a

regular cell because in virtual cell manufacturing

systems, machines in a functionally organized

facility would be temporarily dedicated to a part

family. In this way, jobs are routed only to those

machines that are dedicated to the specific part

family under current production. Another advantage

of operating in a virtual cell for companies like

WCVF Inc. is that no arrangement of machines

needs to be done when the demand is uncertain and

this results in savings on machine arrangement.

Kanan et al. (1996) revealed that virtual cells act like

flexible routing mechanisms.

6 THE CELLULAR LAYOUT

DESIGN

This section describes the four major steps taken in

designing a lean cellular configuration at WCVF

Inc.:

 Determine the process family;

 Draw the current state map;

 Determine and draw the future state map;

 Draft a plan to arrive at the future state.

6.1 The Process/Product Family

A process family, also known as a product family, is

a group of products or services that go through the

same or similar processing steps. The intent is to

look for items or parts that could be created

alongside each other in a manufacturing cell. Once

the part families are identified, WCVF Inc. designed

and developed a cellular layout tailored to the

processing of some of their typical part families.

6.2 The Cellular Layout

WCVF Inc. identified for each part-family a

dedicated cluster of machines that have the complete

responsibility for processing the parts identified in

the family of like-parts.

The significant benefits of cellular

manufacturing include reduced setup time, reduced

work-in-process inventory, reduced throughput time,

reduced material handling cost, improved product

quality (Wemmerlov, 1997). Cellular layout is

suitable for a manufacturing environment such as

WCVF Inc. in which large variety of products are

needed in small volumes (or batches). Once the part

families are determined and assigned to specifically

Productivity Improvement through Layout Redesign - A Lean Approach Case Study

521

identified and virtually formed cells, WCVF Inc.

generated a current state value stream map of the

identified process/product families.

6.3 Spaghetti Diagram

The first step in creating a path towards a lean

process consists of generating the spaghetti diagram

to depict the flow of parts in the system. A spaghetti

diagram also known and called layout diagram is a

visual representation using a continuous flow line

tracing the path of an item or activity through a

process. The continuous flow line enables process

teams to identify redundancies in the work flow and

opportunities to expedite process flow (Ron et al.,

2009).

6.4 Current State Value Stream Map

In general value stream mapping (VSM) combines

material processing steps with information flow as

well as other important related data. This tool allows

users to create a solid implementation plan that, in a

lean journey can be considered as the launch pad to

begin identifying and improving a process family.

The current state value stream map (end-to-end

system map) takes into account not only the activity

of the product, but the management and information

systems that support the basic process. Important

information provided by the current state map is the

machine or work station cycle time, distance

traveled, and product lead time.

At WCVF Inc., once the current state value

stream map was produced and analyzed, the team

identified the location of waste and then decided to

produce a version of what should be the future

layout of the factory and the sequence of various

operations through various machines. Simulation

was also used to assist the team in analyzing various

“future states” scenarios.

6.5 Future State Value Stream Map

The future state map defines a direction and

theoretical goal for the new work cell to aim for. In

general, a future state map is almost identical to the

current state map except for the kaizen events. As

mentioned earlier, discrete-event simulation was

used to generate and test different scenarios of future

states before selecting one for implementation. In

choosing the new configuration in order to

consolidate all the CNC machines on the second

floor, WCVF Inc. had to consider among other

factors, the impact of a layout change and the batch

size. The results of the move were encouraging.

7 TECHNICAL

CONSIDERATIONS AND

IMPLEMENTATION OF

LAYOUT CHANGES

After technical considerations, the three alternatives

described below were identified as candidate

solutions that could contribute to waste elimination,

process, productivity, and delivery time

improvement at WCVF Inc. Further economical

analysis determined that only two of these

alternatives were immediately feasible while the

third one was rescheduled for future time when

and/or if better finances allow. The three candidate

projects are listed and described below.

7.1 Difficulties Encountered

The major source of difficulties encountered during

the lean implementation was the lack of lean

principles education from the company’s

management. However, case studies and success

stories from other prominent corporations lead the

management to authorize the implementation of the

new operational philosophy with less skepticism.

For the engineering team, however the problem was

more the lack of experience due to the fact that this

implementation was really the very first lean

experience for most of them. Long meetings were

often necessary to overcome the divergence of

opinions and reconcile ideas, which was necessary

to convince both the top management and the

working personnel. The latter was extremely

skeptical at the beginning of the project but ended to

become a positive and enthusiastic part of the effort

when they finally realized that a negative attitude

from their part could only harm the future of the

company that could even face a potential closure.

7.2 Procurement of Plastic Trim

Granulators

By acquiring a Plastic Trim Scrap Granulator the

accumulation and subsequent excessive material

handling of trim scrap would be avoided because all

trim scraps would be immediately ground at the

point of origin rather than being boxed, moved,

stored in a free space (to be found) awaiting a later

move to a grinding machine where an additional

worker would be needed to perform the grinding

ICINCO 2012 - 9th International Conference on Informatics in Control, Automation and Robotics

522

operation.

Grinder costs based on a need of seven

machines are shown in Table 1. The estimated costs

associated with the trim scrap are displayed in Table

2. Calculations revealed that the pay-back period for

the investment made to purchase the grinders is

approximately 3 years as displayed in Table 3. At

the time of this project, WCVF Inc. was not

financially positioned to disburse $136,000 (coded

data) and expect a three year return-on-investment

period. Therefore, the grinder proposal was

contemplated as a future project.

7.3 Relocation of All CNC Machines to

One Single Floor

The second alternative project as contemplated by

WCVFC consisted of relocating two Thermowood

5-Axis CNC machines (one M70 and one M67)

from the third floor to the second floor where a third

Thermowood 5-Axis CNC (M67) was already pre-

located.

The current location of the M67 and M70 on the

third floor makes it difficult for one operator to run

two machines simultaneously as expected by the

plant operations manager. The difficulty is centered

on various factors including material storage space,

CNC machine work space, downstream work space,

and the operator mobility, i.e., the ability of simply

moving easily, timely, and cost effectively from one

machine to the other.

Placing both M67 facing each other would create a

cell with two workstations that could be managed by

a single operator, thus, easing the demand on

manpower due to various cycle times of machining

programs that allow for one operator to run both

machines.

The reader is advised that pictures and drawings

of various views of CVFC plant as well as of those

of the second floor final layout are available upon

request with a special permission of the company.

Finally, placing the Model 70 Thermwood 5-axis

in a good proximity into another work cell that has

excessive cycle time and close to the foaming work

center would also create the opportunity for a second

operator to run these two workstations (i.e., the CNC

M70 and the foaming booth) in a one cell which

now can afford a one-operator two- machines

situation.

7.4 Relocation of Offices, Tooling, and

Welding Booth to the Second Floor

The last project analyzed by the company and the

continuous improvement team was the relocation of

all the administrative offices, the tooling department

and the welding booth from the third floor to the

second floor. Before rearrangement and floor

consolidation, the company functional layout was

organized as follows: all the operations

(manufacturing) offices were located on the second

floor while the support offices (sales, marketing, and

customer service) were operating from the third

floor.

The new structure will combine all these services

on the existing available office space on the second

floor, thus, creating a more close and integrated

environment where constant communications would

be more on an interpersonal basis than via e-mail

and phone as employees are now confined next to

each other, improving the team effort spirit.

The final move consisted of relocating the

tooling department and the welding booth from the

third floor to the second floor, thus occasioning a

16,000 square foot of free space available for

potential rent income while simultaneously

eliminating more or less $50,000 of annual overhead

expenses from the WCFV Inc. operating budget.

WCVF Inc. wanted to target the second floor for the

lean manufacturing implementation first because of

the large open space in the middle of the floor that

needed to be better utilized for existing

manufacturing operations.

Table 1: Grinder Quote Summary (Coded Data).

Product

Price ($)

Quantity

Total Price ($)

12 x 18

Grinder

15,250.00

106,750.00

Accessories

4,187.50

29,312.50

Total

19,437.50

136,062.50

Table 2: Wages and Benefits Table (Coded Data).

Cost Area

Wages

(*) x10

Wages &

Benefits x10

Average

Hourly Rate

Employee

$26

$31.2

$15.00

(*) Remarks: Wages are based on $15/h. Benefits are 20%. Data

are slightly altered and coded to reflect reality)

Current process and material flow was in conflict

with itself as material was moving in two directions

in the same space and material cut on the M67 had

to travel to the left side of the room for final

fabrication. A more organized layout was needed.

8 CONCLUSIONS

A final floor plan was created using AutoCAD

Productivity Improvement through Layout Redesign - A Lean Approach Case Study

523

software. In total, this change of layout

configuration had completely vacated the third flow,

hence, opened a 16,00 square feet space to offer as

potential rental income, eliminated more or less

$50,000 of manufacturing operation expenses,

moved 50 pieces of fabricating machinery, moved

three 5-Axis CNC machines, and created an

improved material flow, cycle/delivery times, and

manufacturing work environment. The move was

performed under the leadership and coordination of

one of the authors with minor disruptions of

operations, no loss of production time and no

interruption of employee work efforts. Table 4

shows what area originally existed on the third floor

and how much area was actually needed on the

second floor.

Before the new configuration the shop was

crowded and darker. Pictures taken before and after

change of layout, although not allowed to be

reproduced in this paper, are available with special

permission of WCVFC Inc. Now, the second floor is

brighter and better air flow is available because this

floor has an air exchange system that was not

available on the third floor. In addition, material

flow is in the west to east direction.

The lighting on the second floor is improved

over that on the third floor which was not painted

and occasioning the light to be more absorbed in the

room. The window wall is on the west side of the

building. The elevator and shipping doors are in the

east side. Additionally, work flows were altered to

minimize conflicting movement patterns and make

material flow one way without conflicts.

Arranging CNC machines in such a manner that

accommodated one operator to run two CNC

machines or one CNC and other work bench

routines simultaneously has reduced operator idle

time during machine cycle time, thus, eliminating

non value added operator downtime. In the new

configuration a single operator is able to run two

machines located next to each other when prior to

the move machines were located on two different

floors forcing the need of one operator for each

machine.

Finally, to capture the significance of the savings

generated by the change in layout from the three-

floor operations to a two-floor organization, two

products were particularly tracked through their

entire process before and after implementation of the

lean changes and elimination of some non-value

adding activities. A time process map showing

different steps in these product processes is depicted

in Figure 1 above. An analysis of the diagram

reveals an improvement in cycle time and machine

use. In this illustration, the string of white boxes

shows the current process and the gray and yellow

boxes show the future process. The future process

map shows a saving of 4.8 days per year for the two

products. Considering that these products represent

only two of 35 to 50 varieties of products which run

across these machines it can be easily seen and

concluded that the potential of duplicating this

saving scenario among other products is very high.

REFERENCES

Al-Mubarak, F., Khumawala, B. M. and Canel, C., 2003.

Focused Cellular Manufacturing: An alternative to

Cellular Manufacturing. International Journal of

Operations & Production Management, 23, 3/4,

ABI/INFORM Global: 277-299.

Balakrishnan, J. and Cheng, C. H., 2005. Dynamic

Cellular Manufacturing Under Multiperiod Planning

Horizon. Journal of Manufacturing Technology

Management, 16, 5/6, ABI/INFORM Global: 516-530.

Cheng, T. C. E. and Podolsky, S., 1996, Just-in-Time

Exercising JIT Practices to Support Pull Production

control in a job shop environment. Journal of

Manufacturing Technology Management, Vol. 16 Iss:

7, pp.765 - 783

Kanan, V. R. and Ghosh, S., 1996. A Virtual cellular

Manufacturing Approach to Batch Production.

Decision Sciences, 27, 3: 519-539.

Ron Bialek, Grace L. Duffy, and John W. Moran, 2009.

The Public Health Quality Improvement Handbook.

Milwaukee, WI: ASQ Quality Press.

Schonberger, R. J., 1986. World Class Manufacturing: The

Lessons of Simplicity Applied. Free Press, New York,

NY.

Shafer, S. M. and Charnes, J. M., 1993. Cellular vs.

Functional Layouts Under a Variety of Shop

Operations. Decision Sciences, 24, 3: 665-682.

Wemmerlov U, Johnson D. J., 1997. Cellular Manufacture

at 46 User Plants: Implementation Experiences and

Performance Improvements. International Journal of

Production Research 35:29-49

ICINCO 2012 - 9th International Conference on Informatics in Control, Automation and Robotics

524

APPENDIX

Table 3: Grinder Total Savings per Year (Coded Data).

Old Grinder

New Grinder

Issue

Annual Saving

Remarks

Highly probable

to over feed and

jam

Highly improbable

to over feed and jam

up.

Clean out time is 30

minutes + no jam

time depending on

the jam up, as little

as 4 hours

$127.50

Cause of jams, grinder overheats plastic, melts, creates

jam figure about 2 jams a year

Need for Full

Time Employee

Machine Operator

grinds in cycle

1 employee with

benefits

$31200.00

Clean out time is

30 minutes

Clean out time is 10

minutes

Clean out is three

times less

$2,600.00

Average clean out is a day or 20 minutes a day, 5 days a

week, 52 weeks a year

Grinds 1 full

containers in 30

minutes

Grinds the same

quantity in 20

minutes

There is a saving of

20 minutes or 1/3

hour equivalent to

$4/hour

$4890

489 boxes of regrind is approximately 1956 boxes of trim

scrap (4 trim scrap to 1 regrind). This will generate a

saving of 10 min per box or 326 hours a year at a wage of

$15 per hour

General material

handling: Must

move trim boxes

to first floor

from 3 floors

Dos not need trim

scrap boxes

Reduced material

handling movements

$1950.00

30 min a day 5days a week 52 weeks a year. This

corresponds to moving 1440 boxes a year in average.

Requires moving

boxes to the

platform

No movement

required

Usually waiting for a

forklift skids onto

platform

$3600.00

Calculated on a 10 minutes per box and 1440 boxes per

year

Safety/Housekee

ping requires a

storage for trim

scrap boxes

Needs storage for

regrind boxes only

Clean up all aisles

improves safety

issues

N/A

Double the storage space from 25 to 50 boxes of regrind

by eliminating the need to store any trims crap prior to

regrind on the first floor. This will permanently eliminate

any container size skids on the parameter aisle ways.

Trim Scrap

Inventory

20 minutes a day

Will not be required

anymore

$1300.00

Inventory/list/organize regrind path

Estimated

Annual

Savings

$45667.50

Table 4: Space Usage Before and After Layout Changes.

Area

Original Space (Square Feet)

New 2

Floor area (Square Feet)

Floor Administrative Offices

3200

Absorbed into existing second floor office area

Floor Tooling Manufacturing

5900

3000

Floor 5-axis CNC Machine

Centers

6900

2200

Productivity Improvement through Layout Redesign - A Lean Approach Case Study

525

Figure 1: Process Mapping for Two Products (Product A + White Path and Product B = Grey + Yellow Path.

ICINCO 2012 - 9th International Conference on Informatics in Control, Automation and Robotics

526