COMMERCE 2OC3 Lecture Notes - Lecture 9: Strike Action, Railways Act 1921, Aisle

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CHAPTER 9: LAYOUT STRATEGIES
INNOVATIONS AT MCDONALDS
Indoor seating (1950s)
Drive-through window (1970s)
Adding breakfast to the menu (1980s) 6 OUT OF 7 OF THESE ARE LAYOUT
Adding play areas (late 1980s) DECISIONS.
Redesign of the kitchens (1990s)
Self-service kiosk (2004)
Now three separate dining sections
Seventh major innovation
Redesigning all 30,000 outlets around the world
Three separate dining areas
Linger zone with comfortable chairs and Wi-Fi connections
Grab and go zone with tall counters
Flexible zone for kids and families
Facility layout is a source of competitive advantage
Cost per outlet_ $300000-$400000
STRATEGIC IMPORTANCE OF LAYOUT DECISIONS
Layout is one of the key decisions that determine the long-run efficiency of operations
In our increasingly short life cycle, mass customized world, layout designs need to ne
viewed as dynamic
This means small, movable, and flexible equipment
Store displays need to be movable
Office desks and partitions modular, and warehouse racks prefabricated
To obtain flexibility in layout, managers
cross train their workers.
maintain equipment,
keep investments low,
place workstations close together, and
use small, movable equipment (equipment on wheel)
Layout helps companies to establish competitive priorities in regard to
capacity,
processes,
Flexibility
cost,
as well as quality of work life, customer contact, and image
LAYOUT DESIGN CONSIDERATIONS
Higher utilization of space, equipment, and people
Improved flow of information, materials, or people
Improved employee morale and safer working conditions
Improved customer/client interaction
Flexibility
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TYPES OF LAYOUTS*
1. Office layout: Positions workers, their equipment, and spaces/offices to provide for
movement of information
2. Retail layout: Allocates shelf space and responds to customer behaviour
3. Warehouse layout: Addresses trade-offs between space and material handling
4. Fixed-position layout: Addresses the layout requirements of large, bulky projects such
as ships and buildings
5. Process-oriented layout: Deals with low-volume, high-variety production (also called job
shop or intermittent production)
6. Work-cell layout: Arranges machinery and equipment to focus on production of a single
product or group of related products
7. Product-oriented layout: Seeks the best personnel and machine utilizations in repetitive
or continuous production
GOOD LAYOUTS CONSIDER*
(Material) handling equipment
Capacity and space requirements
Environment and aesthetics
Flows of information
Cost of moving between various work areas
OFFICE LAYOUT
Grouping of workers, their equipment, and spaces to provide comfort, safety, and
movement of information
GOAL: Promote movement of information is main distinction
Typically in state of flux due to frequent technological changes
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RELATIONSHIP CHART
RETAIL LAYOUT
Objective is to maximize profitability per square foot of floor space
Sales and profitability vary directly with customer exposure
FIVE HELPFUL IDEAS FOR RETAIL LAYOUT
1. Locate high-draw items around the periphery of the store
2. Use prominent locations for high-impulse and high-margin items
3. Distribute power items to both sides of an aisle and disperse them to increase viewing of
other items
4. Use end-aisle locations
5. Convey mission of store through careful positioning of lead-off department
RETAIL SLOTTING
Manufacturers pay fees to retailers to get the retailers to display (slot) their product
Contributing factors
Limited shelf space
An increasing number of new products
Better information about sales through POS data collection
Closer control of inventory
SERVICESCAPES
1. Ambient conditions - background characteristics such as lighting, sound, smell, and
temperature
2. Spatial layout and functionality - which involve customer circulation path planning,
aisle characteristics, and
product grouping
3. Signs, symbols, and artifacts - characteristics of building design that
carry social significance
WAREHOUSING AND STORAGE LAYOUTS
Objective is to optimize trade-offs between handling costs and costs associated with
warehouse space
Maximize the total “cube” of the warehouse – utilize its full volume while maintaining low
material handling costs
MATERIAL HANDLING COSTS
All costs associated with the transaction
Incoming transport
Storage
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Document Summary

Adding breakfast to the menu (1980s) 6 out of 7 of these are layout. Redesigning all 30,000 outlets around the world. Linger zone with comfortable chairs and wi-fi connections. Grab and go zone with tall counters. Facility layout is a source of competitive advantage. Layout is one of the key decisions that determine the long-run efficiency of operations. In our increasingly short life cycle, mass customized world, layout designs need to ne viewed as dynamic. Store displays need to be movable: office desks and partitions modular, and warehouse racks prefabricated. To obtain flexibility in layout, managers cross train their workers: maintain equipment, keep investments low, place workstations close together, and use small, movable equipment (equipment on wheel) Layout helps companies to establish competitive priorities in regard to capacity, processes, Flexibility cost, as well as quality of work life, customer contact, and image. Higher utilization of space, equipment, and people. Improved flow of information, materials, or people.

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