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  • Writer's pictureJoseph Winslow

Facility Master Planning

Facility master planning takes many forms and is an important exercise. Facilities that are not planned can be at best inefficient or even inadequate for the purpose which they are built. If you have ever been in a facility and found yourself asking, “What were they thinking when they built this?”, chances are, they were not thinking, at least in a planning sense. They were most likely reacting to the latest fire drill and without a plan, that effort is rarely ideal.

Master planning cannot be fully described in a short blog article, but the goal here is to provide an outline for the master planning effort. Master planning can be grouped into the following steps:

1. Vision of the ideal future state

2. Evaluation of the current conditions

3. Evaluation of supporting infrastructure

4. Assessment of resource availability (capital, land, buildings, etc.)

5. Master Planning

The first step in developing a master plan is to understand where you are going. This will involve talking to senior management to find out where they want the facility to be in the future. Ask questions such as:

· How much production capacity will be needed?

· What will the product mix be?

· Will there be any new product types?

· How many employees do they foresee and in what departments?

· What is their philosophy on redundancy? Sustainability?

You will also need to understand their tolerance for getting to these goals in terms of capital spending, expanding the buildings or even the site, time-frames, shutdowns, and what disruptions can be tolerated, etc. For example, if a certain department is currently at capacity, additional capacity may need to be fully operational before any disruption to current operations can be tolerated.

The present condition, age, and reliability of the current facilities and equipment needs to be evaluated. What problems are currently known? Is any equipment or building obsolete? Does it need to be replaced or can it be renovated? What are the problems with personnel, product, and waste flows? Is there sufficient office, cubical, and meeting spaces for employees? Are support facilities adequate (i.e. laboratories, warehouse, restrooms, etc.)?

Another major effort will be to look at the condition of the utility equipment. It will be important to know capacity utilization now (and how that will change over time) as the facility is transformed per the plan. Obviously, this will be an iterative process since the plan for manufacturing improvements will be a moving target. The utilities that support those improvements will need to be adjusted accordingly.

After the information from these first exercises is in hand, you can begin to look at where the gaps are between where the facility is today and where management wants it to be in the period that you are planning. These gaps will begin to form into logical groups of improvements that are needed. These groups might be things like Facility Renovations, Utility Upgrades, Equipment Purchases, or Land Purchases. These improvements will then need to be prioritized, and analyzed for cost, and how long they will take.

Prioritization is worth emphasizing here. It may be tempting to base the priorities on the biggest pain point, or the capital budget at the moment, but that may be short sighted. The implications of relieving that pain, my have an impact on other aspects of the plan that need to be resolved first. As an example of this, think about a pharmaceutical plant that is out of capacity in their warehouse, but also in their manufacturing area. Capital is tight and building warehouse space is much less expensive than building manufacturing space, so the temptation may be to build warehouse space first. That may be a mistake though. Warehouse space is something that is easily rented or leased (and manufacturing space is not) and capital could be preserved to spend where it is needed most. This is a very simple example, but it illustrates the point.

You will not be able to make, all the changes that are needed at the same time. Logical phasing will be a major deliverable of any master planning process. The phases will be dictated by available capital, prioritization of the changes, available resources to manage the projects etc. And this phase planning will be in iterative process where changes are required to earlier phases after later phases are planned, and vice versa. These constraints and assumptions should be documented as a part of the plan, so you do not have to rely on memory or run the risk of future management asking, “What were they thinking when they planned this?”.

Master Plans should not just sit on the shelf after they are completed. They should be updated as needs dictate and conditions change. If a Master Plan is revisited on a regular basis (in conjunction with annual Capital planning), it can end up being a perpetual planning tool that is updated incrementally instead of having to re-write it from scratch every 5 years as I have seen many companies do.

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