Good micro level planning can affect an organisation and determine how well it meets its competitive priorities by:
Facilitating the easy flow of materials and information,
Increasing the efficiency in the utilisation of labour and equipment,
Increasing convenience of customers and thereby sales at a retail store,
Improving working conditions and decreasing hazards to workers,
Improving employee morale, and
Facility planning at the micro level involves decisions about the functional layout and physical arrangement of economic activity centers. Economic activity centers are work related places that consume space: it could be a teller window in a bank or the space for customers to wait for their turns; it could be a machine, a work-bench or work-station; it could be a stairway or an aisle; it could be a cafeteria or storage space. These have many practical and strategic implications.
The goal of functional layout is to allow workers and equipment to operate as effectively as possible. In order to do so, the following questions need to be addressed:
What should the layout include for each economic activity center? The economic activity center should reflect decisions that maximize productivity. For example, a central tool room is often efficient for most processes, but keeping tools at individual work-stations makes more sense for many processes.
How much space and capacity does each economic activity center need? Space is a cost but inadequate space can reduce productivity and even create safety and health hazards.
How should each economic activity center’s space be configured? The space, its shape, and the elements need to be interrelated. For example, in a store the placement of the show windows, spaces planned so that products are visible and providing a pleasing atmosphere are necessary parts of the layout configuration decisions.
The location of an economic activity center has two dimensions that affect a center’s performance:
Relative location, or the placement of a center relative to other centers, and
Absolute location or the particular space that the center occupies within the facility, both.
Where should each economic activity center be located? Location can significantly affect productivity. Employees who must frequently interact with one another should be placed close together so that interaction becomes easier; sections or departments should be planned to reduce time lost in moving material or traveling of personnel back and forth.
The operations function in both manufacturing and service organisations can be divided into two basic types, intermittent and continuous, according to the volume and standardizing of the product or service.
Different types of operations have different layout requirements. By their nature, layouts of the facility are one of the most important strategic elements of a business enterprise. Many symptoms of inappropriate business architecture appear as layout or material handling issues. For example, in warehouses, materials flows and the cost of picking stocks are dominant considerations; in retail outlets, customer convenience and sales may dominate; whereas in an office, communication effectiveness and team building may be crucial.
Intermittent Operations: Intermittent operations are characterized by the work piece moving from one group of machines to another. It finds application in made-to-order products, low product volume, general-purpose equipment, labour-intense operations, interrupted product flow, frequent schedule changes, and large product mix.