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Location and Layout Design

Factors Influencing Location

Physical (access to recourses, transport infrastructure, communications infrastructure)
Socioeconomic (labour supply, access to market/customers, proximity of competition, business
environment, political dimension)

Location Planning
Competitive Clustering: where operations locate next to competitors, as this draws more
Pre-emptive Developments
Business Relationships
Non-economic Factors

Moving from in-house to a supplier
Financial benefits, focus on core expertise, access to outside

Process Layout
Process Mapping
Identifying key aspects of an operations process using symbols
Easy to indentify value adding and non-value adding processes
An aid to process design and layout design
Operation adds value, the rest add cost

Different Layouts

Mixed Layouts
some operations may have a combination of layouts
restaurant may have fixed position (seating), process (kitchen), cell layout (buffet),
product (cafeteria)

ambient conditions (lighting, temperature)
layout and functionality
signs, symbols and artefacts
Different operations use different combinations to influence customer behaviour.

Fixed Position Process/Functional Cell Product
Plant, recourses and
people are stationed
where the operation
will be (bridge, roads)
Similar products or
processes are
grouped together
(tinned and frozen)
Self contained areas
which contain all that
is needed particular
operation or service
All operations follow
the same sequence of
processes (car
assembly, self service)
High product flex.
Product/customer not
High variety of tasks
High product flex.
Robust in the case of
Easy to supervise
Good compromise
Fast throughput
Group work can mean
good motivation
Low unit costs for
high volume
Opportunity for
High unit costs
Scheduling space and
activities may be hard
Low utilization
Can have high work in
Complex flow
Can be costly to
rearrange existing
May need more space
Low mix flexibility
Not very robust in
case of disruptions
Work is repetitive

Selling Space
value to the retailer
hot-spots and dead-spots
space allocation
yield management
space elasticity
selling/buying environment
- reinforce brand image
- impacts on emotional state and purchase behaivour
Supermarket Layouts
Retailer Objectives
Long Term
retail branding strategy
marketing management
Short Term
facilitate, promote trading activities
operations management
Store Layout Constraints
customer flow