Chapter 6

Process Selection and Facilities Layout

McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Process Selection
• Process selection
– Refers to the deciding on the way production of goods
or services will be organized
– It has major implications for
• Capacity planning
• Layout of facilities
• Equipment
• Design of work systems

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Process Selection and System Design

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Process Strategy
• Key Aspects of Process Strategy:
– Capital Intensity
• The mix of equipment and labor that will be used by the
organization
– Process flexibility
• The degree to which the system can be adjusted to changes
in processing requirements due to such factors as
– Product and service design changes
– Volume changes
– Changes in technology

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Technology
• Technology
– The application of scientific discoveries to the
development and improvement of products and
services and operations processes
• Technological Innovation
– The discovery and development of new or improved
products, services, or processes for producing or
providing them

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Kinds of Technology
• Operations Management is concerned with:
– Product and service technology
• Discovery and development of new products and services
– Process technology
• Methods, procedures, and equipment used to produce goods and
provide services
– Information technology
• The science and use of computers and other electronic equipment to
store, process, and send information

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Technology for Competitive Advantage

• Technological advances can lead to competitive

advantage
– Product technology
• Increased market share and profits
– Processing technology
• Improved quality
• Lower costs
• Higher productivity
• Expanded processing capabilities

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Process Selection
1. Variety
– How much?
2. Equipment flexibility
– To what degree?
3. Volume
– Expected output?

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Types of Processing

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Product-Process Matrix

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Process Choice Effects

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Automation
• Automation
– Machinery that has sensing and control devices that
enable it to operate automatically
• Fixed automation
• Programmable automation
• Flexible automation

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Automation Questions
1. What level of automation is appropriate?
2. How would automation affect system flexibility?
3. How can automation projects be justified?
4. How should changes be managed?
5. What are the risks of automating?
6. What are the likely effects of automating on:
– Market share
– Costs
– Quality
– Customer satisfaction
– Labor relations
– Ongoing operations

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Facilities Layout
• Layout
– the configuration of departments, work centers, and
equipment, with particular emphasis on movement of
work (customers or materials) through the system
– Facilities layout decisions arise when:
• Designing new facilities
• Re-designing existing facilities

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The Need for Layout Planning
• Inefficient operations
– High cost
– Bottlenecks
• Accidents or safety hazards
• Changes in product or service design
• Introduction of new products or services

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Layout Design Objectives
• Basic Objective
– Facilitate a smooth flow of work, material, and information through the
system
• Supporting objectives
– Facilitate product or service quality
– Use workers and space efficiently
– Avoid bottlenecks
– Minimize material handling costs
– Eliminate unnecessary movement of workers or material
– Minimize production time or customer service time
– Design for safety

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Basic Layout Types
• Product layouts
• Process layouts
• Fixed-Position layout
• Combination layouts

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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 Station Station Station item
1 22 33 44

Material Material Material Material

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

labor labor labor labor
Used for Repetitive Processing
Repetitive or Continuous

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Product Layout: Advantages
• High rate of output
• Low unit cost
• Labor specialization
• Low material handling cost per unit
• High utilization of labor and equipment
• Established routing and scheduling
• Routine accounting, purchasing, and inventory control

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Product Layout: Disadvantages
• Creates dull, repetitive jobs
• Poorly skilled workers may not maintain equipment or quality of
output
• Fairly inflexible to changes in volume or product or process design
• Highly susceptible to shutdowns
• Preventive maintenance, capacity for quick repair and spare-parts
inventories are necessary expenses
• Individual incentive plans are impractical

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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
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Process Layout: Advantages
• Can handle a variety of processing requirements
• Not particularly vulnerable to equipment failures
• General-purpose equipment is often less costly than the
specialized equipment used in product layouts
• It is possible to use individual incentive plans

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Process Layout: Disadvantages
• In-process inventory costs can be high
• Challenging routing and scheduling
• Equipment utilization rates are low
• Material handling slow and inefficient
• Complexities often reduce span of supervision
• Special attention for each product or customer
• Accounting and purchasing are more involved

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Fixed Position Layouts

• Fixed Position layout

– Layout in which the product or project remains
stationary, and workers, materials, and equipment are
moved as needed

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Combination Layouts
• Some operational environments use a combination of the
three basic layout types:
– Hospitals
– Supermarket
– Shipyards
• Some organizations are moving away from process
layouts in an effort to capture the benefits of product
layouts
– Cellular manufacturing
– Flexible manufacturing systems

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Flexible Manufacturing System (FMS)
• FMS
– A group of machines designed to handle intermittent
processing requirements and produce a variety of
similar products
• Includes supervisory computer control, automatic
material handling, and robots or other automated
processing equipment
• It is a more automated version of cellular manufacturing

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Computer Integrated Manufacturing (CIM)

• CIM
– A system for linking a broad range of manufacturing
activities through an integrated computer system
• Activities include
– Engineering design
– FMS
– Purchasing
– Order processing
– Production planning and control

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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 and storage layouts
– Retail layouts
– Office layouts

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Line Balancing
• Line balancing
– The process of assigning tasks to workstations in
such a way that the workstations have approximately
equal time requirements
– Why is line balancing important?
1. It allows us to use labor and equipment more efficiently.
2. To avoid fairness issues that arise when one workstation
must work harder than another.

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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

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Cycle Time and Output Rate

Operating time per day

Output rate 
Cycle time

Operating time per day

Cycle time 
Desired output rate

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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 theoretical minimum number of stations
 t Sum of task times
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Precedence Diagram
• Precedence diagram
– A diagram that shows elemental tasks and their precedence
requirements

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Measuring Effectiveness
• Balance delay (percentage of idle time)
– Percentage of idle time of a line
Idle time per cycle
Balance Delay 
N actual Cycle time
where
N min Actual number of stations
• Efficiency
– Percentage of busy time of a line

Efficiency 100% - Balance Delay

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Designing Process Layouts
• The main issue in designing process layouts
concerns the relative placement of the
departments
• Measuring effectiveness
– A major objective in designing process layouts is to
minimize transportation cost, distance, or time

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Information Requirements
• In designing process layouts, the following information is
required:
– A list of departments to be arranged and their dimensions
– A projection of future workflows between the pairs of work
centers
– The distance between locations and the cost per unit of distance
to move loads between them
– The amount of money to be invested in the layout
– A list of any special considerations
– The location of key utilities, access and exit points, etc.

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