Redesign of the Layout and the Materials Flow of a Production Plant: A Master Thesis Conducted at the Production Plant of Moxba-Metrex

Hailemariam, Desta A. (2010) Redesign of the Layout and the Materials Flow of a Production Plant: A Master Thesis Conducted at the Production Plant of Moxba-Metrex.

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Abstract:Moxba-Metrex is undergoing changes. The changes mainly arise from three areas: from the need to improve the inefficiencies in the existing logistic processes, from the introduction of new lines of products, and from the need to build new facilities in view of expanding some of the existing facilities. This research has focused on identifying and improving the inefficiencies related to the logistic processes, developing improved layouts of the existing and new departments, and designing the material flow paths connecting the departments so that the handling and transportation efforts are minimized. We started the research by investigating and analyzing the existing logistic processes. Based on the location of some of the processing machines, we took two scenarios. We followed Muther’s systematic layout planning (SLP) as a procedural solution approach, and applied a pair-wise exchange improvement algorithm to develop layouts of the existing and new departments for both scenarios. We then determined the locations of the machines within each department, the locations of the docks of the warehouses, and the input/output points. We also designed the material flow paths connecting the departments for both scenarios using the shortest r-flow network approach introduced by Chhajed and Montreuil. After developing the detailed layouts of the departments, we calculated the transportation cost of producing a big bag of finished materials for each scenario and compared their costs with cost of producing a big bag of finished materials in the existing layout. Finally, we selected the layout that should be implemented from these two scenarios using the transportation cost and other qualitative criteria. The main conclusions of our research are: 1. The inefficiencies in the logistic processes arise from three areas: • There is no separate receiving area reserved for the incoming materials. As a result the incoming materials are directly stored in random locations in the warehouses which in turn causes the handling and relocation of materials during the retrieval of the materials to be high. • There is no temporary storage area for the work-in-processes that the work-in-processes are transported back to the warehouses for temporary storage. This is long distance transportation which needs a lot of handling and transportation efforts. • Some facilities (facilities required for washing, cleaning, and inspection of the bins) which are required for consecutive processes are located in different locations. As a result the materials which have been processed in one of these facilities have to be transported for long distances to get them to the next facility. 2. The inefficiencies in the logistic processes can be improved in two ways: • Providing temporary storage areas for the receiving of the incoming materials and for the work-in-processes. The separate receiving area can be used for the temporary storage of incoming materials and can give the workers time to identify the types of the incoming materials, and time to arrange their storage locations. The temporary storage for the work-inprocesses can avoid the transportation of the work-in-processes back to the warehouses. • Combining the facilities that are required for the consecutive processes in single locations. By locating the facilities required for consecutive processes together, the transportation and handling efforts required for moving the materials among the consecutive processes are reduced. _________________________________________ iii 3. The following table summarizes the total distance materials are transported every day and the transportation cost of producing a big bag of finished materials for the existing layout and the layouts from the two scenarios. Comparing the transportation cost, we concluded that: • Compared to the transportation cost of producing a big bag of finished materials in the existing layout (which is about €127), the layout of the departments in Scenario 1 improves this transportation cost per big bag of a finished material by about €48. About 16,790 big bags of materials being produced every year, this layout results in annual cost reduction of about €805,920. • The transportation cost for producing a big bag of finished materials in Scenario 1 is €79 which is €7 less compared to that of Scenario 2. About 16,790 big bags of materials being produced every year, this layout results in annual cost reduction of about €117,530 compared to that of the layout in Scenario 2. • Compared to the current location of the finished product warehouse, extending the finished product warehouse to make use of the space near the Production department brings an annual saving of €76,348. Given the results of our study, we would like to give the following recommendations. 1. We believe that the layout of the departments from Scenario 1 (see Figure 6.14 on page 63) results in reasonable improvement (a saving of €48 per big bag of finished materials) in the transportation cost of materials. Therefore, we recommend Moxba-metrex for its implementation. 2. The reduction in the transportation cost partly comes from the improvements in the logistic processes. We therefore recommend that: • The separate areas for the receiving of the incoming materials and for the temporary storage of the work-in-processes be made available. • The facilities that are required for the consecutive processes be combined and located together at a single department. 3. Further research has to be made on the following areas: • The storage and retrieval systems of the materials should be improved, and the sizes of the internal packaging containers should be increased. • The capacities of the facilities in the Production departments should be improved to increase the utilizations of the facilities in the other departments (i.e., the Handling department and the raw material warehouse)
Item Type:Essay (Master)
Clients:
Moxba-Metrex
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Industrial Engineering and Management MSc (60029)
Link to this item:http://purl.utwente.nl/essays/60694
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