Abstract: Every organization needs to remain competent to stay afloat in the sea of competitors with similar products and services. Smaller production companies, such as job shops, are often incapable of committing significant human or capital resources for the improvement of manufacturing flow times. However, there is considerable demand in these organizations for solutions that offer improvements without the risk involved in expending these resources. This paper presents a study that uses simulation to improve shop floor performance by means of certain operational parameters. In this study, an overview of the plant layout problem is covered for the particular company. The original motivation for redesigning the entire shop floor was the need to realize improvements in material flow and output level. Since the machines were scattered this made it very difficult to study the cost involving the flow of materials through these machines. So for the purpose of analyzing total material handling cost, 34 elements (jobs) were taken which are mainly processed through 6 machines, out of which 32 elements were divided into 4 part families using Direct Clustering Method (DCM) with group technology concept method and similar machines were arranged together to analyze the cost using Computerized Relative Allocation of Facilities Technique (CRAFT) with aide of computer graphics.Finally, a new job shop layout was designed, which yield minimum material handling cost
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