This autumn, a brand new food factory opened in the small town Gevgelija in Southern Macedonia. The successful entrepreneur Viktor Petkov has since 1992 built a viable company that employs over 100 persons during peak season. His company, Vipro, produces organic food from fruits and vegetables. In September, Vipro ceremoniously opened their new facilities. My colleague Lars Skjelstad and I were invited to join as “guests of honour” because we have assisted Vipro in planning the new factory layout. In this post I tell how Closeness Rating Analysis (CRA) helps plan a flow-oriented layout.
In 2006-2007 I was part of a research team assisting small- and medium sized firms to improve their manufacturing operations in the Former Yugoslavian Republic of Macedonia . One of these companies was Vipro. Mr. Petkov had just bought a bankrupt chicken farm and wanted to move his current operations to the new facilities to accommodate further growth and the stricter EU-rules for food safety (HACCP). He sought help from the SME-COMNET project to plan the future layout. We helped in the following way: First, we mapped the current processes using standard process mapping techniques (value stream mapping works well). Second, we used layout theory and Closeness Rating Analysis (CRA) to suggest possible layouts (see below). Third, we presented the layouts for Vipro and concluded on which to use.
Using Closeness Rating Analysis to draw layouts
To transform an old chicken farm into state-of-the-art and HACCP-certified facilities for food production is not an easy task. Some processes should be close to each other; others have to be physically separated due to food safety concerns. The layout should—as always—support flow, transparency, speed, cost effectiveness, flexibility and a positive work environment. To achieve this, we primarily used CRA—a very simple and visual tool developed in the 1960s by the industrial engineer Richard Muther. Based on Muther’s model, I have made a simple CRA Excel tool that you can download for free use here.
After mapping the main processes and considering their relative dependence in the tool, we used Microsoft Visio to assist us finding the best possible solution: We simply drew boxes for processes and lines between them according to their dependence (strong dependence = 3 lines, low dependence = 2 lines, undesirable dependence = dotted lines). Moving boxes around in Visio changed the “messyness” / “cleanliness” of the layout. The cleaner, the better. In addition, physical “monuments” in the facilities and available investment budgets, had to be considered. Layout decisions are trade-off decisions: It is all about finding a reasonable and logical solution. Good then, that there are very simple, yet powerful, tools that can assist your creativity and analysis.
Veggie success on the Balkans
Under the headline “Veggie success on the Balkans”, SINTEF reports from the successful opening of the new Vipro factory in September . Unfortunately I had no time to attend the grand opening. But, Lars Skjelstad did and he describes the factory as “one of the most modern and flexible factories in Macedonian food industry”. The 10.000 square meter facility will continue producing food such as the traditional Ajvar: a relish of roasted red bell peppers, garlic, eggplant and chili peppers. Vipro’s Ajvar has been awarded several prices for its first class quality. Creating viable work places in Macedonia is a noble and important achievement by Mr. Petkov. I am proud to say we could help:
“We got fantastic help from SINTEF. Based on our anticipated needs, the SINTEF researchers developed a layout solution that amazed us—and continues to do so today!” (Viktor Petkov to SINTEF Media, October 2012, )
If you want more information about layout analysis or the solution we suggested for Vipro, please contact me directly.
Sources / tools:
- SME-COMNET (The Small and Medium Enterprises – COMpetitiveness in NETworks) 2006-2007
- “Vegetable success on the Balkans” (in Norwegian) 19-10-2012: http://www.sintef.no/Presserom/Forskningsaktuelt/Ros-for-industrihjelp-pa-Balkan/
- Download my Closeness Rating Analysis Tool at SMARTLOG.no