Florida International University



Layout Design and the Implementation of the Aluminum Material Warehouse for CGI

An interim project proposal submitted to:

CGI Windows & Doors

10100 NW 25th Street

Miami, FL 33172

Attn to: Mr. Jorge Santaella

By

Group #5

Y. Quinones (Project Manager)

J. Cobian (only for Facilities Planning)

C. Mejias

Y. Sanchez

In partial fulfillment of the requirements for the course ESI 4452 Engineering Project Management and Senior Design (Part I)

Industrial & Systems Engineering Department

Florida International University

December 2009

Executive Summary

The company through the years has become a leader in the window and door industry. CGI is known for their high quality aluminum and laminated products. Their continued success and multiple product types have brought upon the company the predicament of having insufficient storage area for the raw aluminum materials. At this moment, there are several bundles of material lying on the floor around in the facility and even in the parking lot of the company. The main goal of the project is redesign of the aluminum material storage area and implement the new layout in the warehouse.

The project focuses on designing the layout of the material storage area and this in turn will create an effective material flow of the aluminum extrusions used in the facility. The project also encompasses the requirement of having standard locations for the different SKU’s (aluminum extrusions) stored in the facility. This will produce shorter time duration when feeding the material to the manufacturing lines, as well as the time needed to store material when it is being delivered from the vendor.

The first deliverable in this project is a new layout design of the storage area for the aluminum material. The second deliverable is the implementation of the new layout design. Although, the layouts of the manufacturing lines are not directly a part of the project scope, they will be positively affected by the improved material flow. The new layout will result will minimize material handling costs and costs incurred from damaged material due to scratches and dents from material that is now placed on the floor. If the project is not accepted, the company will need to find an external storage facility to hold the a minimum of 400,000 more pounds of material that need to be ordered to start the new product lines and for other existing product lines new aluminum finish demands. The team calculated a cost of over $52,000 a year, for the ability to store the raw material that is now placed on the floor and parking lot. For the cost of 1.35 years of storing the material in an external warehouse, this project’s one-time cost would have been incurred (based on Merit).

Using Muther's systematic layout planning, the team will begin by analyzing the current facility layout, the current SKUs in inventory and the requirements for the future product lines along with their usage. The team will analyze different aluminum finish demands, the frequent movers (SKUs) for each line, the process for the receiving of new material and the process for the daily supplying of material to each manufacturing line to understand the company’s requirements. These requirements will be verified for accuracy by the VP of Manufacturing at CGI, to ensure the company’s best interest is brought forward. The process of analyzing will include the consideration of frequently used SKU numbers and the different SKU numbers used for the existing and future manufacturing lines. These extrusions will be stored dependent on usage. The new layout will maintain close proximity of the SKU’s associated with the different manufacturing lines to minimize excessive material handling.

A quality plan will be developed along with a conceptual facility design. This will be followed by the physical design that will be documented in AutoCAD. Once the new layout passes a performance test, the project is considered complete.

The cost for the project is approximated at around $71,300. These costs include the design, analysis, and testing costs associated with the new layout. From this total cost, $11,300 of these costs will be absorbed by FIU.

Table of Contents

1. Introduction 4

1.1 Company Background 4

1.2 Company Mission & Vision 4

2. Problem Background 4

3. Problem Statement 5

4. Scope 5

5. Constraints 6

6. Assumptions 7

7. Merit 7

8. General approach 8

8.1 Work Breakdown Structure 9

9. Contractual aspects 9

10. Schedules 10

11. Resources 12

12. Personnel 13

12.1 Organizational Chart 14

12.2 Linear Responsibility Chart 15

13. Budget 15

14. Evaluation Methods 15

15. Potential Problems 15

1. Introduction

1.1 Company Background

CGI Windows & Doors is a manufacturer of impact resistant windows and doors based in Miami, Fl. The products are made out of heavy-gage aluminum and laminated glass. CGI was established after the Category 5 Hurricane Andrew impacted South Florida. In 1993, CGI designed its first impact window line to meet a new statewide building code impact standard. A year later, CGI receives Miami-Dade County approval for impact resistant windows and is one of the first manufacturers in the country to offer impact windows.

CGI continued to succeed with the constant designing of high quality impact resistant products. In 1997, a new product line of impact resistant products was introduced, that includes impact swing doors, sidelites and transoms. The company has launched several new product lines, a single hung in 2006 and a sliding glass door in 2008. In the coming year, CGI plans to establish a whole new product line that would include about three entirely new product types. CGI's continued growth caused the company to expand its facility twice in less than 8 years, first to a 40,000 square foot facility and then to a 110,000 square foot facility. Since 1992, CGI has more than tripled the number of SKU's in storage for their aluminum extrusions.

1.2 Company Mission & Vision

According to the president of CGI Windows & Doors the company's goal is to be the standard in hurricane resistant window and door solutions by offering products that exhibit exemplary design pressure protection, sustainability and design features. CGI Windows and Doors strive to always provide an excellent product and support our customers in a fair and consistent manner.

2. Problem Background

CGI Windows and Doors are expanding their facility by incorporating two new product lines. According to CGI's VP of manufacturing, the company has been able to free up some space for the new product lines by executing Lean Manufacturing Practice. However, the company needs to increase the capacity for the storage of raw materials, but due to the expansion there are current limitations in the floor space and in the storage capacity. CGI's COO has asked the team to determine if an increase of storage capacity in the facility can be done with such expansion.

3. Problem Statement

As discussed during our kick-off meeting, the following deliverables have been set:

Deliverable 1 - Design of layout for the aluminum material warehouse.

In order to complete the AutoCAD layout design the amount of material to allocated rack space for, available space to allocate for warehouse use, and the standardized locations for the SKU's in the warehouse are needed.

The AutoCAD layout design is consider acceptable when the storage capacity is increased thus all aluminum material are accounted for in racks.

Deliverable 2 - Implementation of new layout for the aluminum material warehouse.

The new physical layout will reduce material handling lineal feet movement and increase the flow of the aluminum material.

The physical layout is considered acceptable when the standardized locations for the SKU’s reduce travel time.

4. Scope

This project will focus on the storage area of the facility. All product lines will be directly impacted, in view of the fact that all products are composed of aluminum extrusions. Consequently, all product lines will be analyzed to ensure the SKU numbers utilized by each product line will be stored as close as possible to eliminate excessive material handling. Although the storage layout will affect all the product lines, this project will only focus on the redesign of the storage area. The manufacturing layout and process, layout of product lines and process, and any indirect work associated with it are considered not a component of the project.

Schematic of available storage area is denoted with green bold line:

[pic]

Figure 1 - Total area available within the facility for the warehouse.

Total area that is available is approximately: 26,000 square feet

5. Constraints

• There is a limited area within the current facility that can be used for aluminum storage. This area includes a designated area within the building and the parking lot. An AutoCAD drawing denotes these “green areas”.

• No walls will be torn down in the redesign on the facility.

• No walls will be constructed within the building.

• Should the parking lot be used, the team must leave enough space for employee parking.

• Any structure used in the parking lot must shelter the aluminum against the weather.

• The team will need to give an alternative layout or decide if an external storage facility is better by the end of the semester.

• The budget for the proposed solution is $60,000.

6. Assumptions

• The company will provide an AutoCAD file of the current layout, so the team is not responsible for measuring the structure or creating a blue-print of the facility.

• The company will provide any information they considered necessary for the project. (E.g. types of extrusions; demand for extrusions; extrusions used per product line, etc.)

• The company is open to the purchase or manufacturing of new racks, therefore the team has the ability to choose how the racks will be obtained in order to keep the costs to a minimum.

• The company is open to the purchase of new material handling equipment, thus allowing the team to consider different material handling equipment to complement the flow of the new storage area layout.

7. Merit

The project proposed will deliver a new layout design for the storage area, which will result in lower storage costs and minimize material handling costs. The company strives for excellence on their product and as well as support the customer's satisfaction through providing a good quality product. With the implementation of the new layout, the company will continue to increase their competitiveness in the market. By utilizing the facilities resources to maximize the storage of the aluminum, the company can increase their existing product variety. The new layout will also allow the production line to be more efficient when selecting aluminum from storage.

Table 1 - The budget for the project, broken down by resources used.

|Monthly Cost for a 10’ x 30’ storage location |Number of warehouse locations needed |Total Cost for storing material in an |

|at Public Storage | |outsourced location |

|$217.00 |9 |$ 1,953 Monthly |

| | |$23,436 Yearly |

|Distance Between CGI and Public Storage |Average Diesel Price per Gallon |Cost of Traveling to Public Storage |

| | |(Round Trip) |

|1.45 miles |$2.82 |$ 8.18 |

|Monthly (Traveling four times a week): |$ 130.88 |

|Yearly: |$1,570.26 |

|Number of Workers |Time to obtain material from Public |Cost of Workers ($12/Hour) |

| |Storage | |

|4 |3 hours |$ 144 (per trip) |

|Monthly: |$2,304 |

|Yearly: |$27,648 |

|Total Cost for Public Storage Yearly: |$52,654.26 Yearly |

8. General approach

Using the Muther’s Systematic Layout Planning, the team will analyze the current facility layout, the current SKU’s in inventory and the requirements for the new product line along with its usage. The team will also focus on the major business aspects affecting the company and the relationships between the departments directly affected by the plant layout.

In creating the new layout in AutoCAD the team has to concentrate in the design, which covers analyzing and creating the physical design. When analyzing, the team will cover a wide variety of activities, such as determining the aluminum usage, determining existing rack information, determining available area for storage, developing a quality plan, and determining amount of material to store. On the other side, the team will create the physical design by creating a conceptual design first.

In order to analyze, the data collector will gather information regarding the aluminum usage first. The data collector will get all the information regarding which SKUs are used more frequently and in which line are they being used. Then the data collector will get the information concerning the existing racks, which are the quantity and dimensions. Having the information about the existing racks, the data collector will go on and find the amount of aluminum (SKUs) to allocate space for. The data collector will point out the amount of material to store, both for the existing and the new product lines.

The Industrial Engineer will create a quality plan that assesses the area utilized for the storage in comparison to the existing layout versus the area utilized with the new layout. A time study will be performed to compare the time to pick aluminum to send to paint on the existing and on the new layout.

The Lean Systems Specialist and the Facilities Planner will work jointly using lean technique and facilities design approaches to create the conceptual design. Having the conceptual design, the CAD Drafter will go on and utilize the information provided by the Lean Systems Specialist and the Facilities Planner to create the physical design using AutoCAD.

In order to implement the design of the new layout for the storage area of the facility, a focus on the fabrication and testing & time off will be assessed. In fabrication, a focus on the assembly, purchase, and move of racks will be evaluated. And in the testing and time off, a performance analysis will be conducted.

The Industrial Engineer will analyze the need of new racks, by focusing on the quantity of racks and the amount of material to store. The cost analyst will prepare the cost associated with buying or making new racks. For the implementation, the rack assembler will assemble the new racks or make new racks out of steel, if a decision is made in favor of making new racks instead of buying them. For the testing and time off, the Industrial Engineer will conduct the analysis on performance.

8.1 Work Breakdown Structure

[pic]

Figure 2 - The work breakdown structure for the project.

9. Contractual aspects

None.

10. Schedules

There are two deliverables for the project. The first deliverable is the layout design for the Aluminum Material Warehouse created in AutoCAD. The final deliverable is implementation of the new layout design. The project duration is 88 days, which begins on September 16, 2009 and completed on January 15, 2010. The project is divided into the design, fabrication, and testing with the final sign-off.

The design portion of the project consists of analysis and creating the physical layout design in AutoCAD. The design part is 29 days of the project. In the analysis, the team will gather information from the company and evaluate the rack quantity requirements. The analysis part of the project will begin on September 16, 2009 and will end on October 26, 2009. The following is a breakdown of the activities and their duration:

▪ Existing Rack Information 2 days

Collecting the existing rack information

▪ Available area to use for warehouse of aluminum material 8 days

▪ Aluminum Usage per Manufacturing Line 6 days

Figure what SKU's are utilized by each manufacturing line

Figure the frequent movers of SKU's for each manufacturing line

▪ Total amount of material to store 6 days

Total amount of material to store for the existing product lines

Total amount of material to store for the new product lines

▪ Develop a Quality Plan 6 days

The physical design in AutoCAD will begin on October 19, 2009 and will be completed in November 3, 2009. The duration of the creating of the conceptual and physical layout design will be 12 days.

The implementation consists of the fabrication and testing portions. The implementation phase has a of 53 day duration, with fabrication taking 50 days and the testing and final sign-off having 5 days allocated for it. In fabrication, the team will purchase new racks, assemble and install the racks, and for the movement of the existing racks. The purchasing and receiving of the new racks has four days allocated for this task, while the assembling of the new racks has six days duration. The longest time was allotted for the moving and installation of the racks. This activity has 40 days duration. The final task in implementation is to conduct a performance analysis. This task will take five days to complete.

[pic]

11. Resources

The Resource Chart list the task required and resources needed in order to complete the project. For human resources, the numbers

of hours needed to complete each task are shown. For material resources, the amount of each material is stated. The cost associated with the resources can be seen in the budget section in this proposal.

Table 2 - The breakdown of the project by resources.

[pic]

12. Personnel

The following chart itemizes and gives a short description of the responsibilities the personnel involved in the project will handle:

Table 3 - Personnel involved in the project.

|Job Function |Description |

|COO |To approve the project plan, proposal and final sign-off of project. |

|Project Manager |To organize, staff, budget, direct, plan and control the project. |

|Project Manager Assistant |To assist project manager and supervise certain tasks and activities throughout the |

| |project life cycle. |

|Technical Writer |To create project proposal and document information during the project. |

|VP of Manufacturing |To ensure the layout meets the company's material handling and storage needs. |

|Materials Manager |To facilitate the gathering of information needed to conduct analysis for the design of |

| |the layout. |

|CAD Drafter |To document the layout in AutoCAD. |

|Cost Analysis |To determine the costs associated with the implementation of the new layouts. |

|Facilities Planner |To create the conceptual design of the storage area layout by efficiently using the |

| |available resources. |

|Lean Systems Specialist |To incorporate lean methods and concepts into the new storage layout. |

|Industrial Engineer |To collect adequate information required to design the most proficient layout and |

| |supervise the flow of material within the scope of the project. |

The following is a table, which includes the personnel at CGI. Their responsibilities for the assistance in the project is noted below:

Table 4 - CGI Personnel involved in the project.

|Job Function |Description |

|COO |To approve the project plan, proposal and final sign-off of project. |

|VP of Manufacturing |To ensure the layout meets the company's material handling and storage needs. |

|Materials Manager |To facilitate the gathering of information needed to conduct analysis for the design of |

| |the layout. |

12.1 Organizational Chart

The following diagram shows the structure of the project organization, the relationships and relative ranks of the personnel positions. The diagram shows the hierarchical responsibilities of each member of the project team.

As illustrated, the Project Manager Assistant is responsible for the technical writer and data collector. The Project Manager Assistant reports to the Project Manager as so does the Industrial Engineer and Cost Analyst. Therefore, each node child reports to the above linked node. The Project Manager is responsible for the entire team.

[pic]

Figure 3 - The hierarchical chart of personnel on the project.

12.2 Linear Responsibility Chart

This chart list each task, from the Work Breakdown Structure, required in order to complete the project, and the personnel responsible for each task. The chart also allows for the Project Manager to identify who will approve what task, and to whom each person should report.

Table 5 - The linear responsibility chart for the project.

[pic]

13. Budget

The budget list the task required and resources needed in order to complete the project. For human resources the numbers of hours needed to complete each task are shown. For material resources the amount of each material is stated. The total cost associated with each resource and task is stated. The chart also indicates

Table 6 - The budget of the project, broken down by the resources.

[pic]

14. Evaluation Methods

In order to evaluate, the team will concentrate on the measures of performance. The team will focus on the square footage used to house the SKUs needed for the current lines and the new product line. The new layout will be considered successful, if all the material (existing and purchasing in the near future) is stored in racks.

Another method for evaluating the success of the layout is the reduction of material movement. The main focus will be on the time it takes to store material when it is being delivered from the vendor and the time to supply the material to the manufacturing lines. Consequently, the new layout will be considered to be successful if the time the lineal feet movement is reduced.

15. Potential Problems

There are no risks associated with this project.

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Schedule in Microsoft Project

11. Resources

13. Budget

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