Operations Management:

Process planning and Facility Layout

Dr Ravindra Ojha
(30th Jul & 3rd Aug’ 2024)
Connect to the last session
• Location choice is a strategic decision

• Growing India calls for location planning,

• CVP, FR, and CG methods for evaluating location choices,

• Location planning for service setup and retail centers are different and
is customer centric,
 Agenda
• Manufacturing process,
• Process categories,
• Layout needs & objectives,
• Mfg. layout categories
How good is this layout?
 Strategic Layout decisions
‘Layout, the configuration of the Gemba (work area), is one of the key decisions in
Operations management that determines the long-run efficiency of operations. It
fundamentally rests on the process design.

Layout for manufacturing / servicing - Barber saloon, Supermarket, Garment show

room, Hospital, Motorcycles, kitchen, tailoring, jewelry and any Service office.

Layout has strategic implications because it establishes an organization’s competitive

priorities in regard to Quality, Capacity, Processes, Flexibility, and Cost, as well as
Quality of work life of the employees, Customer contact and organization Image.

An effective layout can help an organization achieve a strategy that supports

differentiation, low cost, or response.
https://www.youtube.com/watch?v=J-rGOZi5Mrs
 Factors Influencing Process Choices ->
Layout
• Volume: Average quantity of the products produced in a manufacturing system
• Low volume: Turnkey project management firms such as L&T & BHEL
• High volume: Consumer non-durable/FMCG sector, Automobile, Chemical Processing
• Mid-volume: Consumer durables, white goods and several industrial products

• Variety: Number of alternative products and variants of each product that is offered by a
manufacturing system
• Variety of product offerings is likely to introduce variety at various processes in the
system; alternative production resources, materials, and skill of workers

• Velocity / Flow: Flow indicates the nature and intensity of activities involved in
conversion of components and material from raw material stage to finished goods stage
 Manufacturing with Volume & Variety

High Volume Mid-volume

Mid-variety High Variety

Mass Production Mixed production Project Organizations

• Petrochemicals, • Motor production • Power plants
• Automobile • Pharmaceuticals • Aircraft manufacturing
• FMCGs • White Goods • Bridges & Large
• Consumer non-durables • Consumer Durables Constructions
 Process Selection
Two key questions in manufacturing process selection:
1. Variety of product / service?
2. Volume of product/service to handle?

Job
Shop

Batch

Repetitive Continuous
 Broad categories in Processing

Repetitive /
Job Shop Batch Assembly Continuous
Description Customized Semi- Standardized Highly standardized
goods or standardized goods or Goods or services
services goods or services services
Advantages Able to handle a Flexibility; easy Low unit Very efficient, very
wide variety to add or change cost, high volume, high volume
of work products or services efficient

Disadvantages Slow, high cost Moderate cost Low flexibility, Very rigid, lack of
per unit, per unit, high cost of variety, costly to
complex moderate downtime change, very high
planning and scheduling cost of downtime
scheduling complexity
 Process Types
(in order of decreasing volume)
1. Continuous Flow

2. Production Line

Shuttlecock
3. Job Shop

• Batch (High Volume)

• Batch (Low Volume)

4. Project
 Continuous Flow

• Large production volumes

• High level of automation
• Basic material passed along, converted as it moves
• Usually cannot be broken into discrete units
• Usually very high fixed costs, inflexible

Oil refinery, Electrical power generation and transmitted , fiber

formation, public utilities etc.
 Continuous Flow System
• Characterized by a streamlined flow of products in the operating system
• Conversion process begins with input of raw material at one end,
progresses through the system in an orderly fashion to finally become
finished goods at the final stage
• Production process is sequential and the required resources are
organized in stages

• Examples:
• several chemical processing industries such as manufacture of
petrochemicals, steel, pharmaceutical, cement and glass
• In a discrete manufacturing industry high volume production of
very few varieties (such as electrical bulbs or spark plugs)
 Production Line
High-volume production of standard products

• Processes arranged by product flow

• Often “paced” (‘takt’ time discussed later)
• Highly efficient, but not too flexible
Automotive manufacturing
 Job Shop
• Low volume, one-of-a-kind products
• Job shops sell their capability

• Highly flexible equipment, skilled workers

• Equipment arranged by function

Electrical panels, marriage suite, Modular kitchen

 Batch I

• Somewhere in-between Job-shop and Product line processes

• Moderate volumes, multiple products
• Production occurs in “batches”

Can manufacturing, carton makers, advertising mailers, etc.

 Batch II (cellular)
Layout is a cross between that found in a line and that
found in a job shop:

Group Technology

Cable industry, hosiery industry

Cellular manufacturing system
 Project
• Used when a product is:
• one-of-a-kind / unique
• too large to be moved
• Resources moved to where needed
• Equipment, people, etc. are highly flexible
• Finite duration, often with deadline
Construction projects, ship / airplane production, equipment
installation
 Comparing Process Types...

Job Shop Batch Line

Volume Very Low High

Variety Very High Low

Skills Broad Limited

Advantage Flexibility Price and

Delivery
 Facilities Layout
Layout

• the configuration of departments, work centers, and equipment, with

particular emphasis on movement of work (operator or materials)
through the system

• Facilities layout decisions arise when:

• Designing new facilities
• Re-designing existing facilities

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 Need for Layout Planning
1. Inefficient operations 5. Changes in output volume or
•High cost product mix
•Bottlenecks 6. Changes in methods or
2. Accidents or safety hazards equipment
3. Changes in product /service design 7. Changes in environmental or
other legal requirements
4. Introduction of new products or
services 8. Morale problems
 Layout Objectives
• Basic Objective
• Facilitate a smooth flow of work, material, and information
through the system

• Supporting objectives
1. Facilitate product or service quality (Quality)
2. Use workers and space efficiently (Utilization)
3. Avoid bottlenecks (Value flow)
4. Minimize material handling costs (Cost)
5. Eliminate unnecessary movement of workers or material (NVA )
6. Minimize production time or customer service time (Lead time )
7. Design for safety (Safety)
Basic Layout Types

• Product layouts

• Process layouts

• Fixed-Position layout

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 Repetitive Processing: Product Layouts
• Product layout
• Layout that uses standardized processing operations to achieve
smooth, rapid, high-volume flow

Raw materials
Station Station Station Station Finished
or customer item
1 2 3 4

Material Material Material Material

and/or and/or and/or and/or

labor labor labor labor
Used for Repetitive Processing
Repetitive or Continuous
Product Layouts: Advantages & Disadvantages
Advantages Disadvantages
• High rate of output • Creates dull, repetitive jobs
• Low unit cost • Poorly skilled workers may not maintain
• Labor specialization equipment or quality of output
• Low material handling cost per unit • Fairly inflexible to changes in volume or
• High utilization of labor and product or process design
equipment • Highly susceptible to shutdowns
• Established routing and scheduling • Individual incentive plans are impractical
• Routine accounting, purchasing, • Preventive maintenance, capacity for
and inventory control quick repair and spare-parts inventories
are necessary expenses
Non-repetitive Processing: Process Layouts
• Process layouts
• Layouts that can handle varied processing requirements

Dept. A Dept. C Dept. E

Dept. B Dept. D Dept. F

Used for Intermittent processing

Job Shop or Batch
 Process Layouts: Advantages & Disadvantages
Advantages Disadvantages
• Can handle a variety of processing • In-process inventories can be high
requirements • Routing and scheduling pose
• Not particularly vulnerable to continual challenges
equipment failures • Equipment utilization rates are low
• General-purpose equipment is often • Material handling is slow and
less costly and easier and less costly inefficient
to maintain
• Reduced spans of supervision
• It is possible to use individual
incentive systems • Special attention necessary for each
product or customer
• Accounting, inventory control, and
purchasing are more involved
 Fixed Position Layouts
• Fixed Position layout
• Layout in which the product or project remains stationary, and
workers, materials, and equipment are moved as needed. Examples;
Ship/ Airplane/ Refinery / Highway construction
 Line Balancing in Product Layout
Line balancing
• The process of assigning tasks to workstations in such a way that the
workstations have approximately equal time requirements

Goal:
• Obtain task grouping that represent approximately equal time
requirements since this minimizes idle time along the line and results in
a high utilization of equipment and labor

Why is line balancing important?

• It allows us to use labor and equipment more efficiently.
• To avoid unfairness issues that arise when one workstation must work
harder than another.
 Cycle Time
• Cycle time
• The maximum time allowed at each workstation to complete its set of tasks on a unit
• Cycle time also establishes the output rate of a line

Operating time per day

Cycle time 
Desired output rate

Operating time per day

Output rate 
Cycle time 6-29
 How Many Workstations are Needed?
• The required number of workstations is a function of
• Desired output rate
• Our ability to combine tasks into a workstation

• Theoretical minimum number of stations

N min 
t
Cycle time
where
N min  theoretica l minimum number of stations
 t  Sum of task time s
 Measuring Effectiveness
• Balance delay (percentage of idle time)
• Percentage of idle time of a line

Idle time per cycle

Balance Delay   100
N actual  Cycle time
where
N actual  Actual number of stations

• Efficiency
• Percentage of busy time of a line
Efficiency  100% - Balance Delay
 Precedence Diagram
• Precedence diagram
• A diagram that shows elemental tasks and their precedence
requirements • What is the cycle time of the process?
• What is the total time taken for completing the task?
• What is the idle time for elemental tasks a, b, c and e?
• How can I achieve a cycle time of 0.7 min from this
assembly line?
• Can I also achieve 0.5 min cycle time ?

start

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 Example
A computer manufacturer needs to design the assembly stations in the factory where the
cabinet housing the hard disk, motherboard and other accessories are to be done. The
factory currently works for one shift of 8 hours. The tasks, their duration and their
precedence relationships are given below: Precedence relationship among the tasks

Task Description Duration B

(seconds)
F
A Assemble and position the base unit 70
B Install Hard disk 80
A C
C Install Mother Board 40 G H
D Insert Ports 20
E Install speaker 40 D
F Connect relevant modules to mother board & Disk 30
G Install controller 50
H Visually inspect & close with a cover plate 50 E
Total 380 secs

• If the cycle time is 80 seconds, what will be the daily production of cabinets?
• If desired production rate is 320 cabinets/ day, what is the maximum permissible cycle time?
• What is the maximum and minimum number of workstations required to maintain this daily
production rate?
 Solution to the example
• Total available time per day = 8*60*60 = 28,800 seconds
• If the cycle time is 80 seconds, then
Total Available Time 28,800
• Daily production rate =   360
Cycle Time 80

• Since the desired production rate is only 320 cabinets, one can obtain the
maximum permissible cycle time for the assembly stations
Total Available Time 28,800
• Maximum Cycle Time =   90 Seconds
Desired Pr oduction Rate 320

• Minimum number of workstations is dictated by the maximum cycle time

permissible
• Sum of all task times = 380 seconds
380
• Minimum number of workstations =  4.22  5
90
 Solution to the example
Design with 5 work stations

• We assign tasks to the five workstations on the basis of the following two criteria:
• Workstation times should not exceed maximum permissible cycle time of 90 seconds
• The precedence relationships need to be honoured
Workstation Workstation Workstation Workstation Workstation
1 2 3 4 5
Tasks A,D B C,G E,F H
Assigned
Workstation 90 80 90 70 50
Times
Cycle time 90 90 90 90 90
Workstation 0 10 0 20 40
idle time
Workstation 100% 89% 100% 78% 56%
utilization

Sum of all task times 380

  84.4%
No. of work stations*Cycle time 5 * 90
Average Utilisation =
 Solution to the example
Design with 6 work stations

Work Work Work Work Work Work

station station station 3 station 4 station 5 station 6
1 2
Tasks A B C,D E,F G H
Assigned
Workstation 70 80 60 70 50 50
Times
Cycle time 80 80 80 80 80 80
Workstation 10 0 20 10 30 30
idle time

Workstation 87.5% 100% 75% 87.5% 62.5% 62.5%

utilisation

Sum of all task times 380

Average Utilisation =   79.2%
No. of work stations* Cycle time 6 * 80
 Caselet – Layout change in a running
1.
plant
The plant is running in all 3 shifts / day.
2. Three components Tripod, Tulip & IC shaft
being made in-house and rest are coming
from vendors.
3. Bought-out items like grease, circlips, steel
balls, boots etc are procured and stored in
the stores area.
4. Items of sl no 2 and 3 go to assembly room
for assembly of the aggregate- end product
5. Assembly of the aggregate being done,
followed by inspecting & packing and then
dispatched to customers.
6. The capacity needs to be doubled with
additional machines and better systems in
the same floor area.
• What issues do you observe in the layout? layout
• What is the best layout you suggest?
 Combination Layouts

• Some operational environments use a combination of the three basic

layout types:
• Hospitals
• Supermarket

• Some mass production organizations are moving away from process

layouts in an effort to capture the benefits of product layouts
• Cellular manufacturing
• Flexible manufacturing systems

6-38
 Types of Services Processes
Process Service Characteristic Management
Type Example Challenge
Project Consulting One-of-a-kind engagement Staffing and scheduling
Job Shop Hospital Many specialized Balancing utilization and
departments scheduling patients

Batch Airline Group of customers treated Pricing of perishable asset

simultaneously (seat inventory)

Flow/Mass Cafeteria Fixed sequence of operations Adjust staffing to demand

service fluctuations

Continuous Electric Uninterrupted delivery Maintenance and capacity

Utility planning
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 Servicescapes

Designing Physical Surroundings to Affect Employee and Customer Behavior

• Ambient Conditions: background characteristics such as noise level, music,

lighting, temperature, and aroma.

• Spatial Layout and Functionality: reception area, circulation paths of

employees and customers, and focal points.

• Signs, Symbols, and Artifacts: selection, orientation, location, and size of

objects.

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 Service Blueprinting

 Service blueprinting

A method used in service design to describe and analyze a

proposed service

 A useful tool for conceptualizing a service delivery system

 Major Steps in Service
Blueprinting
1. Establish boundaries

2. Identify sequence of customer interaction

3. Prepare a flowchart

4. Develop time estimates

5. Identify potential failure points

6. Determine which factors can influence profitability

 Example of Service Blueprinting
Standard Brush Apply Collect
execution time Buff
shoes polish payment
2 minutes
30 30 45 15
secs secs secs secs
Total acceptable
execution time
Wrong
5 minutes
color wax
Clean Fail
shoes point Materials
Seen by
(e.g., polish, cloth)
customer 45
secs

Line of Not seen by

visibility customer but Select and
necessary to purchase
performance supplies
Blueprint for an Installment Lending Operation
Loan application
Branch Officer
30 min. – 1 hr. Pay book

W W
Line of visibility
Receive payment Final payment

Notify
Decline customer
Issue check
Confirm
Deny
F
F
Verify Print
Credit payment Close
income check Accept Delinquent account
data book

1 day 2 days 3 days F

Initial screening
Verify payor

Confirm
F Credit Branch
Employer bureau records

Bank accounts F
Accounting

Data base
records

F Fail point W Customer wait Employee decision

Service Blueprint
 Service Layout
• Service layouts can be categorized as: product, process, or fixed position

• Service layout requirements are somewhat different due to such factors as:
• Degree of customer contact
• Degree of customization

• Common service layouts:

• Warehouse & Storage layouts would be defined by: Product, Space,
Equipment, Material flow /rotation, Personnel and Management policy
• Retail layouts would be defined by: Customer flow and the customer
experience.
• Office layouts would be defined by: hierarchy, ease of communication and
physical movement, vicinity / privacy need, employee satisfaction etc.
 Summary
• In manufacturing the product type/quantity/ variety, manufacturing process,
flow of material, equipment and operator would define the layout.

• Cellular layouts are common in product floors operating in multi product but
with similar processes.

• Process layout have a significant impact on inventory control, maintenance of

machines and labour productivity.

• Layouts in service operations is fundamentally governed by Customer

experience.