Directorate of distance education

Evaluation 
Codes
Number of 
Appearances 
in Matrix
Number of 
Times Satisfied 
in Layout
Percentage 
Satisfied
A
e
i
o
u
x
2
2
4
3
3
1
2
2
3
1
3
1
100%
100
75
83
100
100
Single Layout for Competitive Advantage
The impact of a good layout on an organization’s performance 
may not be as obvious as good product design skills or superior capacity 
planning. The effects of layout are subtle, yet important. Efficient layouts 
reduce unnecessary material handling.
Good layouts help to maintain low costs, which is a critical part 
of building and maintaining market share in a global environment. Good 
layouts also keep product flowing through the facility, which is important 
for providing good customer service. A facility choked with inventory is 
more likely to damage products and lose customers’ orders.
Layout decisions should be made only after consideration of the 
long-term impact on the overall facility. Managers should ask themselves 
how organizational performance will be affected by a proposed change in 
layout. How will costs, as well as quality and delivery time to the customers, 
be affected? 
For example, an inefficient layout with many material movements 
may cause delays in processing because the transport system is 
overloaded. This problem can cause unnecessary idle time for equipment 
as departments wait for the next batch or products. It could also delay 
customer shipments.
If a change is made in layout, how will future options be affected? 
Will this change increase opportunities for making layout improvements, 

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Notes
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or will some opportunities be lost? Individual layout decisions may not 
seem important, but when added together over time, these decisions 
can be powerful determinants of an organization’s success in the global 
marketplace.
Example
In manufacturing, the inefficiencies of poor layouts surface as 
many other problems. The most obvious of these is a dramatic increase in 
inventory and material-handling costs because product flows are jumbled 
and discontinuous. Dell Computer has carefully organized its facility 
layout so that it can quickly and efficiently assemble personal computers.
In service operations like Pacific Bell, management costs are a 
substantial part of total costs. By paying careful attention to office layout, 
the company is able to get the most from its employees. In addition to 
office layout, the use of telecommunication technology helps to speed the 
flow of information and ideas between people.