Original Date: 08/30/2004
Revision Date: 01/18/2007
Best Practice : New Building Justification
RB Tool & Manufacturing Company realized many benefits from its new facility. The company processes larger parts and assemblies and operates more efficiently, resulting in an annual savings of almost $200,000.
Before 2001, RB Tool & Manufacturing Company (RB Tool) was located in an older, three-story building. The top floor was used as office space; the middle floor was used for milling, deburring, welding, and the manufacturing desk and inspection; and the bottom floor was used for turning, assembly, and inventory storage. The total building space was 13,500 square feet with 10,000 square feet dedicated to manufacturing. The separation of the office from the manufacturing areas caused disruption to the flow of work and communication. Inventory stored on the first floor was moved outside before the work day began to make room to perform manufacturing; at the end of the day, the work was moved back in, and the parts that were manufactured on the middle floor were transferred to the first floor for additional processing or assembly. The forklift could not access the manufacturing equipment because of the proximity of the other equipment and enclosed areas of the floor, limiting the size and weight of parts that could be processed. The limitations of the old facility were recognized, but management did not feel it could justify spending a large sum of money on a new facility.
RB Tool studied its operations and realized that significant savings could be achieved with a modern facility. By locating all operations on one floor, a forklift operator was no longer needed just to move parts or materials between floors, and inventory would not have to be moved twice a day. The increased efficiency of the operations would result in a 10% increase in work flow. By identifying and documenting the savings, it became apparent that the new building was easily justified with a yearly savings of almost $200,000 after deducting the cost of the new building. Larger parts and assemblies could be processed, resulting in additional work opportunities. In addition, the forklift driver was re-assigned as a truck driver, which eliminated the need for courier services.
The new shop floor layout (Figure 2-1) was developed to bring material in one door, and then move it in a large circle through production operations until it reached the assembly area. It was then shipped out the same door that the raw material entered. Quality Assurance functions are located in the center of the circle. Windows from the office areas look out onto the shop floor and create the link between the office and the shop floor. Trouble spots are now readily visible to the shop floor manager. RB Tool now has 20,000 square feet of building space, with 15,000 square feet dedicated to manufacturing. Larger assemblies and parts are now processed creating more sales opportunities. Inventory storage space has been increased from 1,000 to 3,000 square feet which allows the storage of more raw material for emergency response to customers’ spare parts needs. RB Tool’s new facility has brought expanded business and more efficient operations.
Figure 2-1. CAD Drawing of New Building Floor Layout
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