10.1 Facility Layout and Market Competition
Facility Layout is the arrangement of physical spaces, resources, and workflows within an organization to optimize operational efficiency, reduce costs, and improve customer satisfaction.
Facility layout is a strategic, long-term decision that reflects an organization’s commitment to operational excellence. It plays a pivotal role in translating business strategy into effective operations by aligning physical space with competitive priorities. A well-designed layout enhances productivity, reduces costs, improves customer satisfaction, and supports the efficient use of resources.
As discussed in Chapter 2, firms develop strategies to gain a competitive advantage. Facility layout supports these strategies by enabling efficient workflows, facilitating communication, and ensuring adaptability to changing business needs. The layout must align with the firm’s objectives and the nature of its operations, whether manufacturing or service-based.
