CHAPTER 1 INTRODUCTION 1.

1 Background of the study Layout is one of the key decisions that verify the long run efficiency of operations. Layout has numerous strategic implications because it establishes an organizations competitive priorities in regard to capacity, processes, flexibility, and cost, as well as quality of work life, customer contact and image. An effective layout can help an organization attain a strategy that supports differentiations, low cost, or response. In many cases, layout design must think about how to achieve the higher utilization of space, equipment and human, enhanced flow of information, materials, or people, improved employee morale and safer working condition, improved customer or client communication and flexibility. Moreover, layout decisions comprise the best placement of machine in production configurations, offices and desk in office setting, or service centers in setting such as hospitals or department stores. An effective layout facilitates the flow of materials, people, and information within and between areas. There are about seven types of layout has been developed to reach those objective. Firstly, office layouts that necessitate the grouping of workers, their equipment, and spaces to offer for comfort safety and movement of information. The main distinction of office layout is the magnitude placed on the flow of information. Secondly, retail layouts are based on the idea that sales and profitability diverge directly with customer experience to products. Thus, most retail operations manager try to rendering customers to as many products as possible. Studies do prove that the greater the rate of exposure, the greater the sales and the higher the return on investment. The operations manager can modify both with the overall arrangement of the store and the allocation

of space to various products within that arrangement. Thirdly, fixed position layout, the project relics in one place and workers and equipment come to that one work area. Examples of this type of project are a ship, a highway, a bridge, a house, and an operating table in a hospital operating room. Fourthly, process oriented layout that deal with low volume, high-variety production also called job shop or sporadic productions. Fifthly, work cell layout that arranges machinery and equipment to focus on production of a single product of connected products. Sixthly, product-oriented are structured around products or families of similar high-volume, low-variety products. Search for the best personnel and machinery utilization in repetitive or continuous production. Seventhly, warehousing and storage layout that will be extra study at PATCO (M) BERHAD. The objective of warehouse layout is to discover the optimum trade-off between handling cost and cost associated with warehouse space. As a result, managements duty is to capitalize on the utilization of the total cube of the warehouse that is, utilize its full volume while maintaining low material handling costs. We classify material handling costs as all the cost related to the transaction. This consists of incoming transport, storage, and outgoing transport of the materials to be warehoused. These costs contain equipment, people, materials, supervision, insurance and depreciation. Effective warehouse layouts do, of course, also diminish the damage and spoilage of material within the warehouse. The process of designing a warehouse is very important because it will determine the arrangement of items in storage. An important characteristic of designing is its layout. The best warehouse layout and design for an organization will differ by the type of products being stored. This study is observing into warehouse layout for manufacturing company. The warehouse layout for storage the inventory named Main Store does not have a

appropriate layout design because the space is not fully utilize, the flow of information is not receive effectively by the employee and the worker need to move between various work areas. 1.2 Background of the company PATCO MALAYSIA BERHAD was established in February 1970 is Malaysias leading OEM automotive air-conditioner manufacturers. PATCO MALAYSIA BERHAD is a wholly owned Bumiputera company. The heart of business of PATCO MALAYSIA BERHAD is to manufacture a complete air conditioning system. The business activities are to design and develop Heating Ventilating Air Conditioning (HVAC) system; produce heat exchanges for condenser, air conditions set assembly and service automotive air conditioner. PATCO (M) BERHAD specialized in air-conditioner automotive product such as vane rotary compressor, parallel flow condenser, and fan shroud assay and cooling unit. The company are also assembling the product for Model MPV such as blower, rear cooler, cooler and condenser MPV. PATCO (M) BERHAD is a public listed company on the main board of the Kuala Lumpur Stock Exchange. Major shareholder is Malaysia Bumiputera and foreign calsonic kansei, Japan. Malaysia Bumiputera calsonic Kansei Japan has a 20% share in PMB. PATCO (M) BERHAD was located at Lot 2, Jalan Ragum 15/17, 40000 Shah Alam with land about 20234 square meter plant site and factory about 1858 square meter. Receive award certificate of appreciation by Proton Best Development and capacity

1998, 1999 & 2001, certificate ISO 9001-2000, ISO 2009 and also accredited with TS 16949. PATCO (M) BERHAD provide and distributes the air conditioner automotive product to their customer such as Perusahan Otomobil Nasional Berhad (PROTON), Usahasama Proton and Diversified Resources Bhd (USPD), Daihatsu Malaysia Bhd and Volvo Malaysia. Moreover, for the research and development facilities they have Nocoloc Brazing facility for condenser, that give them a full fledge manufacturer of a complete air conditioning system, with its very own in house Research and Development (R&D) facilities capable to carry out initial concept design to final assembly stage. They have R&D facilities such as SDRC I-deas and CATIA CAD/CAM system, durability and performance test facilities and Pro Mechanica Cae software. Quality goods and services are strategically significant to the company. To ensure the quality of their goods, PATCO (M) BERHAD have put this responsibility to the Quality Control or Quality Assurance department. They have high technology equipment for quality scrutiny and test and field service team and facilities. PATCO (M) BERHAD mission to be a competitive and innovative Automotive HVAC System Manufacturer Nationwide and Worldwide, provide total customer satisfaction and excellent quality products and services to our valuable customers, utilise world class methodologies, technologies, facilities and management, ensure job security and satisfaction to our employees to enhance good relationship and encourage selfdevelopment, offer continuous return of investment to our share holders and create a good reputation in the eyes of the public.