Production Layout Optimization for Small and Medium Scale Food Industry

According to the number of competitors in the global marketplace, it is important for companies to reduce their costs and expenses in order to be a sustainable competitor. As a case study, a company producing meatball and soup paste located at Bayan Lepas, Penang was selected with a view of finding a sustainable layout that minimizes travel distance, material handling and losses. A few steps were taken to achieve this aim. Firstly, several layouts were generated using two types of construction techniques, viz. Systematic Layout Planning (SLP) and Graph Based Theory (GBT). In the next step, the Efficiency Rate (ER) of each layout was calculated. The layout with the highest ER was then selected and optimized by using Pairwise Exchange Method (PEM). The result showed that the ER of the selected layout improved from 90.43% to 94.78% after optimizing. Based on this study, it was found that even the best selected layout could be improved, and it is necessary to conduct facility and layout planning before any factory set up to ensure sustainable process and reduce losses.