Production layout optimization for small and medium scale food industry

Abstract

The number of competitors in global marketplace is increasing very fast especially in small and medium enterprise companies. Thus, it is important for company to create an efficient process to reduce the costs and expenses in order to survive in this global competition. As a case study, company producing meatball and soup paste located at Bayan Lepas, Penang is selected. This study helps the company to generate and design the best possible layout for an increment of production capacity from one ton to ten tons. The target is to find the best layout with minimum travel distance, material handling, and losses. A few steps were taken to achieve this target. Firstly, several layouts were generated using two construction type techniques which are Systematic Layout Planning (SLP) and Graph Based Theory (GBT). Then, the Efficiency Rate of each layout was calculated. The Efficiency Rate is the sum of relationship score for all departments in the layout divided by sum of the expected relationship for all departments. The layout with the highest Efficiency Rate is then selected and optimized using “Pairwise Exchange Method”. The result shows that the efficiency rate of the selected layout improved from 90.43% to 94.78% after the optimization. Based on this study, it is found that not all generated layouts are optimum. Thus, it is necessary to conduct facility and layout planning before any factory set up to ensure efficient process and reduce losses.