Redesign the Plant layout for Efficiency Improvement and Cost Reduction: A Case Study

Abstract

In a global market the manufacturing industries have to minimized the production cost and improve the efficiency. The effective design of plant layout can significantly minimized the operational costs of manufacturing companies. An adequate plant layout design can improve the performance of the production line, their flexibility, efficiency.  Proper plant layout design is one of the keys of success in factory management. In this study ongoing production process layout are studied and a new layout will be developed to improve the efficiency and reduce the production cost. The major problem faced by the workshop is high flow intensity between machines which have high interrelationship. This leads to high travelling time and high travelling cost. Two alternative layouts are developed by using Systematic Layout Planning, which is a systematic way of generating layout alternatives. The alternative layout involves transferring the machines which have high interrelationship close to each other. The alternative layouts are evaluated using weighting placement value (WPV) and placement rating (PR) in Computerized Relationship Layout Planning (CORLAP) algorithm. The best alternative is chosen based on the performance measures which have the most significant improvement, total travel distance, total travel time, total travel cost, number of cross-over, output, average resource utilization, total average WIP level, total average waiting time and total time spent in the system. The constructed layout of the workshop efficiency is 30.16% while the alternative 1 and alternative 2 layouts is 71.4% and 73% respectively. The annual production saving cost of the alternative layout is 34,982 birr.