Question
Discuss the strategic importance of layout decisions. How can a particular layout affect a company’s strategic goals? Provide some specific examples from industry.
Strategic Importance of Layout Decisions
Layout strategy helps an organization develop an economic strategy that enables it to attain its strategic goals. Good layout decisions ultimately lead to better utilizations of space, people, and equipment, higher employee morale and a safer working environment, better flow of information, people, and materials, better customer-client interaction, and improved flexibility (Brown, Bessant & Lamming, 2013).
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Nature of the product, production volume, managerial policies and decisions, and nature of plant location are some of the factors that affect the layout decisions. The nature of the product is one of the major factors that affect layout decisions. Stationary layout is usually suitable for heavy products whereas line layout is the best layout design for light products since it is easy to move light and small products from one machine to another. Therefore, design layout for small products gives special attention to the location of machines and handling of materials.
Production volume and the standardization of a product also affect layout decisions. Manufacture of standardized products in large scale necessitates an organization to use line type of layout (Brown, Bessant & Lamming, 2013).
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The layout used by an organization is dependent on the basic managerial decisions and policies related to the scope of expansion, quality of product, size of plant, and extent of integration of the plant.
The shape and topography of the site of the plant ultimately affect the layout decisions, as the decisions would strive to maximize space utilization. For instance, if a plant is located near a railway line, the layout for receiving and dispatching products for shipping would be made on the side of the railway line to facilitate efficient flow of materials and equipment in and out of the plant (Brown, Bessant & Lamming, 2013).
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