Critical Planning Mistakes in Factory Setup Projects

Introduction

Setting up a new factory or a new production area is one of the biggest investments a company can make. Even so, in many projects design mistakes are noticed only after production starts. Fixing them at that stage is far more expensive than fixing them during planning.

In this article we cover the critical planning mistakes commonly seen in factory setup projects and how to avoid them. For a follow-up on why layout decisions change later, you can also read why layout decisions change later.

1. Skipping Product and Volume Analysis

A layout is designed according to which product is made in what quantity. Without a product variety and volume analysis, a layout built around one product becomes inefficient for the others. The analysis reveals product families, routing similarities and volume distribution, and forms the basis for choosing a cell, line or job-shop type layout.

2. Sizing Capacity Only for Today’s Demand

A plant built for today’s demand may fall short within a few years. On the other hand, an oversized plant means idle investment. The right approach is to evaluate different demand scenarios (low, expected, high) and build a structure in which capacity can be increased step by step.

3. Treating Material Flow Separately from Layout

The placement of machines determines the path material travels from raw material to shipment. Machines placed without thinking about flow lead to backtracking, cross-flows and unnecessary transport. Flow analysis (for example a spaghetti diagram and a value stream map) must be done before the layout decision. See value stream map.

4. Leaving No Room for Growth and Flexibility

Product mix, technology and volume change over time. A fixed, single-purpose layout that cannot be expanded cannot adapt to these changes. Column spacing, floor load capacity, utility connections and spare space should be planned from the start so that future changes are easy.

5. Considering People and Ergonomics Too Late

Working height, reach distances, walkways and occupational safety are hard to correct later if they are not considered at the design stage. The operator’s point of view and safety requirements should be included from the very first stage of layout design.

6. Neglecting Utilities and Logistics

• Sufficient capacity and routes for energy, compressed air, water, ventilation and waste management
• Raw material receiving, finished goods shipping and internal logistics paths
• Storage and buffer areas positioned in line with the flow
• Separation of vehicle traffic and pedestrian walkways

When these elements are added at the last stage of planning, production space has to be sacrificed.

7. Involving Stakeholders Late

Production, maintenance, quality, logistics, occupational safety and purchasing have different needs. Feedback collected after the design is complete leads to major revisions. Stakeholders should be involved from the first concept stage and decisions should be recorded.

8. Moving to Implementation Without Validating the Layout

A layout that looks logical on paper can create unexpected problems on site. Testing the layout before implementation with a scale model, floor markings or simple simulations prevents costly mistakes.

Stages of Factory Planning

Mistakes mostly begin in the early stages of planning, when layout decisions are made before product and demand assumptions are clear. A healthy process follows this order: demand and product analysis, process flow, capacity calculation, block layout, detailed layout and simulation, and finally implementation and commissioning.

Factory Setup Checklist

• Were multiple scenarios studied for demand forecasts and product mix?
• Were material flow and people flow separated?
• Was expansion space left for future growth?
• Were storage, quality and maintenance areas positioned in line with the flow?
• Were employee safety and ergonomics taken into account from day one?

Integrating Lean Principles into the Design

Lean factory design builds short transport distances, cell-type layout, one-piece flow and visual management into the design itself. Improving later is generally far more expensive than designing correctly from the start.

Conclusion

In factory setup projects, mistakes are mostly noticed later, once production has started. Taking the right steps from the beginning on product and volume analysis, flow-oriented design, flexibility, people and ergonomics, utilities, stakeholder involvement and validation prevents costly corrections down the road.

At Gemba Partner, we carry out flow-oriented design work with lean principles in new layout and factory setup projects. For details, you can look at our new layout and factory setup projects page or get in touch with us.

Frequently Asked Questions

What is the most common mistake in factory setup?

Designing the layout without product and volume analysis and flow analysis is one of the most frequent mistakes. This mistake causes the layout to be changed later.

When should factory layout be planned?

It should start at the concept stage, before building and machinery investment decisions are made. When layout planning starts late, you have to adapt to constraints in the building.

How is a flexible layout achieved?

Through modular design, wide column spacing, movable equipment and flexibility left in advance in utility connections.

Who should be involved in layout planning?

Representatives of the affected departments, such as production, maintenance, quality, logistics, occupational safety and purchasing, should be involved from the first concept stage.

What is lean factory design?

It is an approach to planning the factory layout around the principles of flow, short distances, flexibility and visual management in order to prevent losses from the start.

What is the most common mistake when setting up a new factory?

Fixing the layout without considering changes in demand and product mix, and leaving no room for expansion.