Factory Layout Improvement Is a Money Problem, Not a Cosmetic One
When people hear the phrase factory layout improvement, most of them picture a tidy plant with wide aisles and machines lined up in neat rows. But the quality of a layout is not decided by how it looks. It is decided by how many meters your people and materials travel in a day, and how much you are paying per hour for that travel.
Two plants can build the same product on the same machines and still get different results, because a different arrangement means a different walking distance for the operator. Change the walking distance and you change how many units the same headcount can produce. That is why output sometimes moves without a single new machine being purchased.
This article covers two things. First, how to convert a layout into a number denominated in money. Second, how to actually run the project in a factory in Thailand.
Three Numbers Decide Whether a Layout Is Good or Bad
What actually goes wrong when a layout is bad? Walk the floor and you will feel that things are “a bit cluttered” or that “there is a lot of movement.” Impressions like that never survive a capital approval meeting. Turn them into numbers and there are only three components.
| Number | What it represents | How to measure it on the floor | The lever that moves it |
|---|---|---|---|
| Distance | Meters travelled per trip | Draw the route on your current layout drawing, then verify it by pacing it out or with a tape measure | Rearrangement. This is layout territory |
| Frequency | Trips per day | Count one day of transport slips, kanban cards or completion reports | Lot size, trolley capacity, consolidated transport runs |
| Rate | What you pay per hour of movement | Divide the total annual employer cost per employee by annual working hours | You cannot lower the rate itself, so you fight on distance and frequency |
These three multiply together. Halving the one-way distance achieves nothing if the number of trips doubles. Conversely, you can leave the distance untouched and still get the same result by consolidating 60 trips a day into 30.
The reason layout improvement so often collapses into a conversation about moving machines is that people are looking at only one of the three, namely distance. In reality, frequency is a conversation about lot sizing and production planning, and rate is a conversation about labour cost and automation. The moment you put all three in the same table, layout stops being the plant manager’s private agenda item and becomes a shared agenda item with production control and finance.
There is one more thing worth noticing about this product of three numbers. It does not appear in any account line. It is buried inside labour cost, but it is never broken out as “the portion spent walking.” That is exactly why layout problems are called hidden costs.
One note on scope. Of the three numbers, this article deals head-on mainly with distance, meaning the physical arrangement on the floor itself. The frequency side, meaning milk-run frequency, the load unit carried per trip, container standardisation and the selection of material handling equipment, is covered separately in our article breaking in-plant logistics improvement into three layers. There are plenty of situations where you can produce a result from frequency alone without moving the layout by a single meter, so read the two side by side.
Turning Walking and Transport Waste into Money — the Calculation Template
Lean production classifies non-value-adding activity into seven wastes. The lexicon published by the US-based Lean Enterprise Institute, attributing the classification to Taiichi Ohno, defines Conveyance as moving parts and products unnecessarily, such as from a processing step to a warehouse and then on to the next processing step when the next step could have been located immediately adjacent. It defines Motion as any unnecessary or awkward movement by an operator, such as hunting for parts, tools or documents.
These are the two wastes that layout attacks directly. And both of them convert into money as soon as you convert them into time.
The calculation template is a single line.
Annual movement cost = one-way distance x trips per day x operating days per year / walking speed / 60 x hourly rate x number of people
The 60 in the denominator simply converts minutes into hours. All this formula says is that walking is time, and time becomes money once you multiply it by a rate. There is nothing clever about it. The hard part is filling the four input values with figures you have actually measured in your own plant.
The example below is illustrative. Every value in it is an assumption, so replace all of them with your own numbers.
| Item | Assumed value | Cumulative effect |
|---|---|---|
| One-way distance | 40 meters | 2,400 meters per day |
| Trips per day | 60 trips | Same as above |
| Walking speed | 60 meters per minute | 40 minutes per day |
| Operating days per year | 250 days | Roughly 166 hours per year |
| Hourly rate | Roughly 4.4 USD | Roughly 730 USD per person per year |
| People sharing the same travel path | 10 people | Roughly 7,300 USD per year |
The hourly rate of 4.4 USD is derived from the JETRO survey discussed in the next section, which puts the total annual employer cost for a manufacturing worker in Thailand at 8,815 USD, divided on the assumption of 2,000 annual working hours. The 2,000 hours is our assumption and is not a figure stated in the survey. In a plant with heavy overtime, that denominator rises and the hourly rate falls.
What matters here is not whether the total looks large or small. What matters is that this calculation holds for a single travel path. A factory has dozens of travel paths. Measure the top five and you will have almost all the money figures the layout discussion needs.
What Is the Movement Rate in a Thai Factory
The proper source for your rate is your own payroll ledger. But when you want a rough bearing before you start, published data will do. The JETRO fiscal 2025 Survey on Business Conditions of Japanese Companies Operating Overseas, Asia and Oceania edition, collects responses from Japanese-affiliated companies and publishes basic pay and total annual employer cost by country and region.
| Category | Thailand | Reference points |
|---|---|---|
| Average monthly basic pay, manufacturing worker | 490 USD | Median is 463 USD |
| Bangkok | 581 USD | EEC is 481 USD, other regions 465 USD |
| Total annual employer cost, manufacturing worker | 8,815 USD | Vietnam is 5,270 USD, China is 12,667 USD |
The basic pay figures are as of August 2025 and exclude allowances. The total annual employer cost is the annual total per employee, combining basic pay with allowances, social security, overtime and bonuses. It does not include severance pay.
For a layout discussion you should use the total annual employer cost, not the basic pay. Build your rate from basic pay alone and you will understate your movement cost by exactly the value of social security, overtime and bonuses, which means you will also understate the benefit of the improvement.
There is a second thing this table tells you. The rate differs between Bangkok, the EEC and other regions. That means an identical travel path carries a different hidden cost depending on where the plant sits. A factory inside the Bangkok Metropolis is paying a higher penalty for exactly the same bad layout.
What SLP Is — Four Phases That Keep Layout Out of the Realm of Guesswork
The internationally used method for deciding a layout without guessing is Systematic Layout Planning (SLP). It was codified by Richard Muther, whose firm Richard Muther & Associates was founded in 1956. The same framework is applied not only to factories but also to warehouses, offices and service facilities.
SLP divides layout planning into four phases.
| Phase | Content | What usually happens in practice |
|---|---|---|
| Phase I Location | Decide where the planned facility will be. Understand the usable area and the surrounding influences | The lease or the site is usually already fixed and there is no real choice |
| Phase II Overall Layout | Decide the arrangement of activity areas and departments. Define the main aisles | This is the decisive phase. Decisions are made at block level |
| Phase III Detail Layouts | Decide the position of each individual machine and piece of equipment, down to installation-ready detail | Many plants skip Phase II and start here |
| Phase IV Installation | Produce drawings and specifications, procure and install equipment, train operators and follow up | This is move day. Outsourcing only this part does not produce improvement |
The original SLP material states that the phases should overlap rather than run strictly in sequence. It also notes that Phase I and Phase IV frequently fall outside the layout planner’s responsibility and are usually carried out by other departments.
The failure we see most often in Japanese-managed plants is skipping Phase II and starting from Phase III. Once the conversation opens with “let’s move that machine next door,” the equipment moves but the flow through the department does not change. The distance may shrink a little, but the shape of the travel path stays exactly as it was.
P-Q-R-S-T — the Five Data Sets You Collect Before Deciding a Layout
SLP tells you to gather five categories of data before you think about a layout at all. The initials spell P-Q-R-S-T.
| Symbol | Content | The question it answers | How to collect it |
|---|---|---|---|
| P | Product / Material | What are you making or moving | Item master, but narrow it to representative items rather than the full catalogue |
| Q | Quantity / Volume | How much of each | Shipment history and inventory. Look at it monthly, not annually |
| R | Routing / Process Sequence | In what order does it flow | Process sheets. Confirm on the floor that they match the physical flow |
| S | Supporting Services | What supports the operation | Tool crib, inspection, maintenance, changing rooms, canteen, toilets, waste storage |
| T | Time | When and in what time is it produced | Operating hours, shifts, peaks and troughs, changeover time |
In the original material, the five are drawn as the teeth of a key, and the letters W-H-Y are engraved on them. The message is to question the accuracy and the assumptions behind the data you have collected, and the text explicitly says that R, the process sequence, is the one to question hardest.
This matters enormously on the floor. On the process sheet the route reads “machining, inspection, assembly.” In reality, work in process waiting for inspection is piled up somewhere else entirely, and the material detours through that place. Build a layout from the process sheet as written and that detour stays invisible forever, permanently frozen into the new arrangement.
Do not treat S as a minor item either. Plans drawn up from a head office in Japan tend to leave the tool crib, changing rooms and rest areas until last. Yet the trips an operator makes many times a day are often not between processes at all. They are to the tool crib, the wash-up point and the material store. When travel paths are actually measured, it is not unusual for these support-service paths to rank near the top.
Relationship Charts and Closeness Ratings A, E, I, O, U, X
Once P-Q-R-S-T is collected, the next decision is which areas should be placed close to which. SLP expresses this with symbols rather than words.
| Symbol | Meaning | How to read it on the floor |
|---|---|---|
| A | Absolutely Necessary | Adjacency is mandatory |
| E | Especially Important | Especially important to be close |
| I | Important | Important to be close |
| O | Ordinary Closeness OK | Ordinary proximity is fine |
| U | Unnecessary | Proximity does not matter |
| X | Not desirable | Keep these apart |
The presence of X is the point of the whole chart. You can state explicitly that two things must not be placed near each other, so relationships such as painting versus welding, dust-generating processes versus precision inspection, or noise sources versus the office, can be recorded as a symbol instead of a vague feeling. In a Thai factory, X often ties directly into regulatory requirements and relations with the surrounding community.
The number of pairs to evaluate is fixed, and the original material gives the formula N x (N – 1) / 2. Ten activity areas produce 45 pairs, fifteen produce 105. Look at those numbers and it becomes obvious that debating every combination is impossible. The practical approach is to settle A, E and X first, then default everything else to O or U.
The SLP procedure is defined as a single sequence that includes this relationship chart. Flow of materials analysis, the relationship chart, the relationship diagram, space requirements against space available, the space relationship diagram, then alternative plans that incorporate modifying considerations and practical limitations, and finally evaluation of those alternatives. The original material requires that at least two alternatives be created and evaluated. A plan with only one option has not been compared with anything, which in practice means nothing has actually been decided yet.
Two Tools for Measuring the Present State
Before drawing a new layout, measure the one you have. Two tools are enough.
The spaghetti diagram is a line drawn on top of your current layout drawing tracing the actual movement route of a person or a part. Trace one full day as a single continuous line and it tangles until it looks like a plate of noodles, which is where the name comes from. Its value is that it can be shown. A table of numbers gets waved through in a meeting. A picture of tangled lines does not.
The from-to chart is a matrix recording how many trips were made from each area to each other area in a day, and over what distance. Rows are origins, columns are destinations, and each cell holds trips, distance, or trips multiplied by distance. Build this chart and you will usually find that movement volume is concentrated in a handful of specific routes. The practical approach is to narrow the measurement down to those few first.
There is one rule to follow when building both of these. Measure on a peak day, not on a representative day. Decide a layout from slack-day data and the aisles will jam when things get busy. A layout is judged on whether it survives the peak, not the average.
The Four Layout Types — Process, Product, Cell and Fixed-Position
Layouts come in types. Putting into words which type you currently have and which one you want to move to makes the discussion dramatically faster.
| Type | Arrangement principle | Character of the travel paths | Suits these conditions | Typical failure |
|---|---|---|---|---|
| Process layout | Group equipment of the same function in one place. Lathes with lathes, presses with presses | Each item follows a different route, so paths are long and cross each other | High mix, low volume, prototyping, expensive equipment that must be shared | Work in process stagnates between departments and lead time becomes unpredictable |
| Product layout | Line up equipment in one row following the process sequence of the product | Paths are short and unidirectional, with no crossing | Low mix, high volume, stable process sequence | Breaks down the moment the product mix widens. One stoppage stops everything |
| Cell layout | Group the equipment needed for one product family into a small unit | Short inside the cell. Between cells it depends on the design | Medium mix, medium volume, with multi-skilled operators | Build the shape without developing multi-skilled operators first and waiting time actually increases |
| Fixed-position layout | The object stays put and people and equipment come to it | The travel paths of people and equipment become the main event | Large machinery, ships, aircraft, in-building installation | Material staging locations are never fixed, and time spent searching dominates |
The diagram shows three of the types, namely process, product and cell. Fixed-position layout is left out of it because the object itself does not move, which makes it hard to compare as a route across the floor.
Most Japanese-managed plants in Thailand start close to a product layout at launch, then drift toward a process layout as the product mix widens. Nobody ever decides to make that transition. It happens because each new machine gets put wherever there is space, and the plant gradually clusters by function.
So the first step of improvement is not drawing a new arrangement. It is admitting which type your current arrangement has quietly turned into.
Straight Lines Versus U-Shaped Lines — Which One Helps the Travel Path
Within product and cell layouts, the recurring debate is straight line versus U shape.
A straight line is easy to understand, easy to run a conveyor along, and easy to extend. Its defining characteristic is that the start point and the end point are far apart. An operator who has reached the end must walk back to the start for the next cycle. Every cycle generates a return walk equal to the full length of the line.
In a U shape the start and end sit next to each other, so that return distance falls to nearly zero. On top of that, one person can hold processes on both the inbound and the outbound leg, which makes it far easier to reduce headcount when volume drops. The trade-off is that a U shape consumes aisle width and works poorly with large equipment or long conveying devices.
There is no universally correct answer. The decision comes down to three points. The first is how much your production volume fluctuates. Large swings favour the flexibility of the U shape. The second is the size and permanence of the equipment. If the line is a row of large machines on concrete foundations, a straight line is more realistic. The third is how far multi-skilled operator development has progressed. A U shape only delivers its benefit when there are people who can hold multiple processes.
How to Run the Project — Six Steps from Visualisation to Full Relocation
The project runs in six stages. None of them can be skipped, though the weight of each stage varies with the size of the project.
| Step | What you do | Deliverable | Who decides |
|---|---|---|---|
| Visualise current travel paths | Build a spaghetti diagram and a from-to chart on a peak day | Current layout drawing and travel path data | Production engineering and floor leaders |
| Quantify the waste | Convert the top five travel paths into money | A schedule of distance x frequency x rate | Production engineering and finance |
| Create multiple alternatives | Collect P-Q-R-S-T and draw at least two options from the relationship chart | Block layout options | Production engineering |
| Compare and evaluate | Compare on movement volume, space required, construction cost and downtime | Comparison table and recommended option | Plant manager |
| Trial implementation | Move only part of the process. Re-tape the aisles | Record of measured results | Floor leaders |
| Full relocation | Construction, installation, commissioning, training | New layout drawing and revised work standards | Plant manager and head office |
Never skip the trial implementation. If all you do is re-tape the floor and shift a staging area, the cost is close to zero and you can measure the result from the next day. An option that produces no benefit here will produce none after a full relocation either. Conversely, once the benefit is confirmed here, the capital approval for the full relocation is very nearly a formality.
In the comparison stage, make sure downtime is one of the columns, not just the reduction in movement volume. It is not at all unusual for the option that cuts movement the most to also be the option that stops production the longest.
Issues Specific to Factories in Thailand — Leased Buildings, Construction and Phased Relocation
From here on we deal with constraints specific to Thailand. When a plan drawn up by a head office in Japan fails to survive contact with the local site, the cause is usually one of these three.
The first is the legal status of the building. Among Japanese companies that have set up in Thailand, there are many cases of operating out of a leased RBW / RBF (Ready-Built Warehouse / Ready-Built Factory) in an industrial estate. RBW does not mean a warehouse for storing finished goods. It means a completed building constructed in advance specifically for lease. Because the building is leased rather than owned, anchoring anything to the floor, suspending anything from the roof structure, opening the walls, increasing electrical capacity or relocating fire protection equipment all require the landlord’s approval. How many weeks that approval takes varies by estate and by owner, which makes it something to confirm before you draw the layout options, not after.
The second is construction work and permits. Changing electrical capacity, moving the storage location for hazardous materials, and rerouting exhaust or drainage are not decisions your company can make on its own. If you hold BOI privileges, you also need to confirm whether adding or removing equipment, or changing the use of an area, affects the conditions attached to those privileges. Leave these confirmations until after the layout has been finalised and the answers will force you to redraw it. Get the confirmations done before you draw.
The third is that production must not stop. Japanese-owned sites in Thailand usually carry a supply obligation to plants in Japan or in other countries, which makes shutting down for several consecutive days very hard to justify. Phased relocation becomes the realistic answer.
Phased relocation works like this. First, secure a piece of floor area inside the building that has nothing on it yet. You get it by compressing an existing work in process storage area or by renting external warehouse space on a short lease. Next, you build the first block on that empty area. Once that block is running, the space it vacated becomes the empty area for the next block. The method is to hold one empty area and move things in a chain reaction, and if you cannot secure that empty area, phased relocation cannot be planned at all.
Phased relocation has a price. During the transition, old and new layouts coexist, so travel paths temporarily get longer. This is when someone says “we improved it and it got worse,” so share in advance that this is expected and temporary.
How Labour Cost and the Investment Climate in Thailand Are Moving
The movement rate is a labour cost. Labour costs in Thailand are rising, which means the money value of a layout improvement grows every year.
On minimum wages, Wage Committee Announcement No. 14 took effect on 1 July 2025. Bangkok was raised by 28 baht per day across the whole of the city to 400 baht, and 400 baht nationwide was set for hotels of the second through fourth categories under the Hotel Act and for licensed service establishments under the Service Establishments Act, meaning venues such as nightclubs, bars, dance halls, karaoke venues and massage parlours. Manufacturing is not covered by this nationwide 400 baht rate. Nationally the structure is split into 17 tiers, with a floor of 337 baht and a ceiling of 400 baht. It is not the case that the whole country moved to a uniform 400 baht, and since this is commonly misunderstood in internal briefings, state it explicitly.
The part that is decided by area rather than by sector has to be read separately, and for a factory it matters more. Under the provincial schedule, Phuket, Chachoengsao, Chonburi and Rayong, together with the Koh Samui district of Surat Thani, are already at 400 baht per day for every type of business, manufacturing included. That was introduced by Announcement No. 13 with effect from 1 January 2025 and has been carried over under No. 14. Chachoengsao, Chonburi and Rayong are the core of the EEC, which is exactly where Japanese-affiliated plants cluster. If your plant sits in the EEC or in Phuket, check the rate for your own province directly, separately from the question of business category.
The investment climate is moving too. According to the Thailand Board of Investment (BOI), investment applications in the first half of 2026 totalled 1.473 trillion baht, up 37 percent year on year. Approvals numbered 1,300 cases and are expected to create more than 82,000 jobs. However, this is an application value, not an amount actually invested. Even so, continued new construction and expansion in the surrounding area means one thing for you, and that is that the competition for people continues.
When labour costs rise and hiring gets harder, there are two levers. One is shortening travel paths so that you do not need to add headcount. The other is labour-saving automation. The order matters, and travel paths come first. Automate a process whose travel path is still long and all you have done is automate a long travel path. The mechanics of labour-saving automation itself are covered in our article on how to approach labour saving and automation.
AGVs and Automated Transport Come After the Layout, Not Before
When the topic is material transport efficiency in a factory, the first item raised is usually the introduction of AGVs or AMRs. Get the order wrong, however, and the benefit never materialises.
The reason is simple. An AGV does not shorten the travel path. What an AGV changes is who does the carrying, not how far the load is carried. Put an AGV on a 40 meter path and all that happens is that the AGV drives 40 meters. The transport distance and cycle time that feed the fleet sizing calculation cannot be fixed until the layout is fixed.
So the sequence is this. First shorten the distance through layout. Then reduce the number of trips through lot sizing and consolidated transport runs. Only then, for whatever transport remains, decide whether a person or an AGV carries it. Work in that order and you place the order only after the transport distance and cycle time that feed the fleet sizing calculation have been fixed. Fleet sizing, travel route design and charging station placement for AGVs are dealt with separately in our article on AGV layout design.
Put the other way round, drawing one layout option before you request an AGV quotation lets you verify the fleet size and travel distance assumptions against the quotation itself. This is not a negotiating tactic. It is a matter of how precisely the premises have been specified.
When to Bring in an External Partner
Everything described so far can be done in house, provided certain conditions hold. Here are the conditions under which you can do it yourself.
- The target area is roughly 1,000 square meters or less, with roughly up to ten processes
- Building drawings are available, including the floor plan and the electrical and compressed air piping drawings
- Production can be stopped for a few days, or the change is limited enough that it need not be stopped
- A production engineer can be pulled off other duties and assigned to this for about two months
If all four hold, you do not need outside help. A spaghetti diagram, a from-to chart and a relationship chart work perfectly well when drawn by hand.
Consider an external partner when the following conditions apply instead.
| Condition | Why an external partner is needed |
|---|---|
| Drawings do not match the physical building, or do not exist | The project starts with an as-built survey, which takes people and instruments |
| Production can be stopped for less than 48 hours | Phased relocation planning and parallel scheduling of contractors both become necessary |
| More than 10 processes are involved, or the project spans multiple buildings | The relationship pairs to evaluate grow as N x (N – 1) / 2 and manual working no longer copes |
| Electrical capacity changes or fire protection equipment relocation are involved | Thai regulations, estate rules and the practicalities of landlord approval all come into play |
| New equipment or automation is introduced at the same time as the move | Equipment specifications and layout have to be fixed simultaneously |
| The organisation is split between two options and cannot decide | Without a third-party evaluation framework, the loudest voice wins |
When selecting a partner, what to look at is not the number of past projects but what they will actually hand over as deliverables. There is an enormous difference in the workload left with you between a firm that delivers a layout drawing and a firm that delivers the from-to chart, the comparison table and the phased relocation schedule as well. If you want to discuss automation at the same time, our article on how to choose a factory automation consulting partner is also worth reading.
How to Commission the Work and Define the Deliverables
When you commission the work, fix the list of deliverables in writing before you sign. As a minimum, specify these five items.
- As-built drawing, based on physical measurement, with differences from the existing drawings explicitly marked
- Travel path data in the form of a from-to chart, stating units, measurement date, and whether it was a peak day or a normal day
- At least two layout options plus a comparison table that must contain all four of movement volume, space required, construction cost and downtime
- Phased relocation schedule, stating the downtime for each stage and the point of no return at which rollback is no longer possible
- Scope of revision to work standards after the move, including who does the revising
Of these five, the one most often missing is the point of no return. A relocation always produces surprises. If nobody has decided in advance how far the project can go before rollback becomes impossible, nobody can make that call on the day.
As for how to phase the engagement, rather than commissioning a whole-plant study straight away, it is safer to run one small engagement covering a single travel path or a single process group first. The fee is small and you get to inspect the quality of the deliverables. If the working relationship fits, widen the scope. If it does not, the damage is contained.
Thinking About Cost Effectiveness and ROI
The cost effectiveness of layout improvement behaves differently from other capital investment. The numerator, the benefit, keeps recurring every year, while the denominator, the cost, is a one-off and a small one at that.
The cost breaks down into roughly four items. Man-hours for the as-built survey and travel path measurement, man-hours for producing the layout options, the physical cost of the move itself covering construction, transport, installation and electrical and compressed air piping, and the opportunity cost of lost production. The first two are man-hours only, and involve no cash outlay at all unless the work is outsourced.
And the class of improvement that consists of re-taping the floor, moving a staging area and changing where trolleys are parked requires zero capital investment. Distance and frequency still move. It is simply rational sequencing to find out how much benefit is available inside that boundary before deciding on a full relocation that involves construction.
As a published application of SLP, there is a study covering the battery workshop at PT GMF AeroAsia, an aircraft maintenance provider. After redesign with SLP, the space required for that workshop is reported to have gone from 123.97 square meters to 98.6 square meters, an area optimisation of 20.46 percent. That is a report about the floor area of a single workshop. It is not a general productivity improvement rate, and it is not a benchmark that transfers to other factories. The benefit in your plant can only be established by measuring your own travel paths and multiplying by your own rate.
For internal presentation, this sequence tends to get approved. First, put an annual money figure on the top five travel paths. Second, run a trial implementation and measure how much of it can be removed by re-taping alone. Third, present the cost and payback period for going after the remainder through construction. The key point is not to open with a capital request for construction cost.
Five Common Failures
The first is skipping Phase II and moving equipment one machine at a time. Start from “let’s shift that machine over here” and the flow through the department does not change. Decide the block-level arrangement first.
The second is deciding on normal-day data. A layout is evaluated at the peak. Build it around slack-day travel paths and the aisles will fill with work in process in the busy season.
The third is leaving supporting services until last. The paths to the tool crib, material store, inspection, changing rooms and wash-up points can outnumber the paths between processes. The S in P-Q-R-S-T is not decoration.
The fourth is producing only one option. An option that has not been compared with anything has not been decided on. SLP asks for at least two alternatives precisely because comparison is the only thing that makes clear what you gave up.
The fifth is not revising the work standards after the move. Change the arrangement and you change the walking sequence and where things get put down. If the standard stays as it was, the floor keeps walking the old sequence and the shortened path never gets used. This is the single biggest reason layout improvements evaporate.
Frequently Asked Questions
Where should we start with travel path improvement in a factory
Pick one peak day and start by counting where people and materials moved from and to within the target process. All you need is a copy of the current layout drawing, a pen and a tape measure. Once you know the top five travel paths, what to do next decides itself. If no drawing exists, a freehand sketch on graph paper is perfectly adequate.
Where does the payback on material transport efficiency investment come from
The source of the payback is the reduction in time spent on transport. So the speed of payback is determined by the time you can eliminate multiplied by the hourly rate. Derive the rate by dividing the total annual employer cost by annual working hours. Calculate it from basic pay alone and you will overestimate the payback period.
How should we explain the benefit of conveyance waste reduction internally
Build a three-column table of distance, frequency and rate, and produce an annual money figure for the top five travel paths. Attach one spaghetti diagram to it. Numbers alone do not land, and a picture alone does not support a decision. Only with both do the plant manager and the finance team treat it as the same agenda item.
Can a layout change be made without stopping production
It depends on the scope. Moving staging areas, re-taping aisles and rearranging trolleys and racks can usually be done between shifts. Anything involving equipment foundations or changes to electrical capacity will require a stoppage, but a phased relocation that holds one empty area and moves things in a chain reaction lets you break that stoppage into short units.
Can we improve the layout in a leased factory
Yes. Anchoring to the floor, suspending from the roof structure, opening the walls, increasing electrical capacity and relocating fire protection equipment all require the landlord’s approval. Draw the line between what needs approval and what does not before you draw the options. In most cases the top few travel paths can be changed within the scope that needs no approval at all.
How long does it take to see results
Within the scope of a trial implementation, you can measure from the next day. For a change involving only floor tape and staging areas, a week of data is enough to tell whether the benefit exists. For a full relocation involving construction, allow for the period after completion during which the work standards are revised and the floor gets used to the new sequence. Judge on the numbers from before people have adjusted and you will understate the benefit.
Summary
A factory layout is a money problem, not a question of appearance. Travel distance, trips per day, and the rate per hour of movement. Multiply those three together and the hidden cost that appears in no account line becomes a number denominated in money.
The method is settled. Measure the present state on a peak day with a spaghetti diagram and a from-to chart, and convert the top five paths into money. Collect P-Q-R-S-T and draw at least two alternatives from the A, E, I, O, U, X relationship chart. Compare them on downtime as well as movement volume, run a trial implementation with floor tape, and only commit to the full relocation once the benefit is confirmed.
In a factory in Thailand, three additional constraints apply, namely the scope of landlord approval in a leased building, construction work and permits, and phased relocation to keep production running. And labour costs keep rising, which means the amount you pay for the same bad layout increases every year.
Transport equipment comes last. Shorten the distance through layout, reduce the frequency through lot sizing, and only then, for whatever transport remains, decide whether a person or an AGV carries it. There is more available with zero capital investment than most people expect.
Measure one travel path, convert it into money, and if you get stuck at that point, that is a perfectly good moment to talk to us. We can start even if your drawings do not match the building, and even if there are no drawings at all. From as-built confirmation through to phased relocation planning, we work with factories across Thailand, with Japanese-language support available. Get in touch through our contact page.
References
- Richard Muther & Associates Overview of Systematic Layout Planning
- Lean Enterprise Institute Lexicon Seven Wastes
- IEOM Society Redesign The Facility Layout with Systematic Layout Planning Method on Battery Workshop at PT GMF Aeroasia
- JETRO FY2025 Survey on Business Conditions of Japanese Companies Operating Overseas Asia and Oceania
- Thai Government Public Relations Department Cabinet Approves 400 Baht Daily Minimum Wage
- The Nation Thailand BOI says first-half investment tops B1.47tn
