Operations Management

GM - 4081

Process Selection and

Facility Layout

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 Introduction
• Process selection refers to the way production of
goods and services will be organized
• Major implications are capacity planning, layout
of facility, equipment and design of work system.
• Determined from organization’s process strategy
– Capital intensity
• Equipment and labor mix
– Flexibility
• Design, volume, technology

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 Process Types

1. Job Shop Process

2. Batch Process
3. Repetitive/Line/Assembly Process
4. Continuous
5. Project Process (time based)

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 Job Shop Process
• Small scale
• Low volume
• High cost
• Intermittent
• Highly flexible
• High skill operator req.
• Examples
– Tool and die
manufacturing
– Machine shop

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 Batch Process
• Moderate
– Volume
– Variety
– Flexible
• Intermittent
• Lower skill level
• Examples
– Bakeries
– Movie theatre
– Airlines
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 Repetitive/Line/Assembly Process
• Higher volume
• Lower flexibility
• Lower skill
• Standardized
• Examples
– Car manufacturing
– Apparel manufacturing

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 Continuous Process
• Very High Volume
• Highly standardized
• No variety
• No need of flexibility
• Skill low-high
• Examples
– Oil refinery
– Flour mill
– Sugar mill
– Power generation

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 Project Process
• Very High Variety
• Flexibility/skills low to
high
• Very complex
scheduling
• Examples
– Elections
– Consultancy
– Building a dam/bridge

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 Considerations in Process Selection
• May involve high investment
• Specific implication to layout hence more
investment
• Needs a match among operations capability,
demand, price and cost
• Product / Service Profiling
– Linking key product or service requirements to
process capabilities.
– E-g expected order size, pricing strategies,
frequency of schedule changes, order winners.
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 Considerations in Process Selection
• Organizations face pressure for sustainable
production of goods and services.
– “Creation of goods and services using process and
systems that are : non-polluting; energy and
natural resource conserving; economically
efficient; safe and healthful for workers,
community and consumer; and, socially and
creatively rewarding for all working people”.

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 Considerations in Process Selection
• Lean Process Design
– Waste reduction
– Variance reduction
– Reduced inventory, floor space
– Shorter lead time
– Reduced defect, rework and scrap
– Increased productivity

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 Considerations in Process Selection
• Automation
– Machinery that has sensing and control devices that
enable it to operate automatically.
– Advantages – high productivity, low operating cost,
high quality, standardization
– Disadvantages – high investment, less flexible, job
losses
Types of automation
Fixed – high cost and volume, rigid, low cost
Programmable – partially flexible, wide variety, low
volume in small batches. (N/C Machines, robots)
Flexible – more customized, less changeover time.
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 Facility Layout
• The configuration of department, work station
and equipment with emphasis on work
(customer or material) movement.
• Important for three reasons
– Require substantial investment of money/effort
– Long term commitments (hard to change)
– Have significant impact on cost and efficiency
• Reasons for Layout design/redesign
– Inefficient operations, safety hazards, changes in
design, volume, environment, legal req.
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 Facility Layout
• Objectives
– The primary objective is to improve work, material
and information flow through system.
– Supporting objectives can be
• Quality improvement
• Efficient utilization of resources
• Avoid bottlenecks
• Minimize material handling cost
• Minimize material and worker movement
• Minimize production time
• High safety measure
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 Types of Layouts
• Product Layouts (repetitive)
– Used for repetitive processing
• Process Layouts (intermittent)
– Used for intermittent processing
• Fixed-Position Layouts
– Used for projects

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 Product Layout
• Layout that uses standardized processing
operations to achieve smooth, rapid and high
volume flow.
– Division of labor, specialization
– E-g Production lines, assembly lines
• Production/Assembly Line
– Standardized layout arranged according to a fixed
sequence of production/assembly line.

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 Straight line and U-shaped Laouts

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 Product Layout
Advantages Disadvantages
• High output rate, utilization • Intensive division causes
dullness, repetitive stress
• Low unit cost, training injuries
cost/time, material handling • Low skill can be bottle neck
cost, also may exhibit less interest
in equipment
• Labor specialization • Inflexible for changes, takes
• Routing and scheduling time for changes
• Susceptible to shutdowns
once done, needs less caused by equipment
attention breakdown, absenteeism
• Fairly routine accounting, • Preventive maintenance req
• Incentive plans cant be tied to
purchasing and inventory individual performance
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 Process Layout
• “Layouts that can handle varied process
requirements”.
• Lower specialization, interdependence as
compared to product layout
• E-g machine shop consisting of milling,
grinding, drilling and so on ….(batches are
moved to relevant departments).
• In service environment universities, airlines,
hospitals, auto repair shops
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 Process Layout

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 Process Layout
Advantages Disadvantages
• System can handle variety • Process inventory cost can be
high if used in manufacturing
• Not vulnerable to • Routing and scheduling
equipment failure challenges
• Equipment is general • Low utilization
• Material handling slow,
purpose and hence low cost inefficient and costly per unit
of purchase or maintain item
• Possible to use individual • Reduced span of control
incentive system • Special attention required for all
items
• Higher unit cost
• Intensive accounting, inventory
control and purchasing involved
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 Fixed-Position Layout
• Layout in which the product or project
remains stationary and workers, materials and
equipment are moved as needed.
• Focus is on timing of material and equipment
deliveries (supply chain)
• Widely used in firefighting, farming, road
building, home building, drilling for oil, other
construction projects

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 Combination Layouts
• Super markets (process layout yet fix material
moving paths)
• Hospitals ( process layout but in ICU is fix
position)
• Process and product layouts are two ends of
continuum from small jobs to continuous
production.
• manufacturers are moving away from process
layout and trying to grab some properties of
product layout means flexible yet efficient.
• Approaches are Cellular manufacturing, group
technology and flexible manufacturing systems
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 Cellular Production
• Layout in which workstations are grouped into
a cell that can process items that have similar
processing requirements
• Benefits are minimal WIP, reduced space req.
and lead time, improved productivity &
Quality
• Issues of equipment (design and cost)
• Issues of workers and management(training,
skill, self management)
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 Process Vs Cell layout

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 Group Technology
• The grouping into part families of items with
similar design or manufacturing characteristics
• Needs analysis, hence time taking,
– Visual inspection
– Examination of design and data
– Production flow analysis

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 Group Technology

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 Flexible Manufacturing System
• A group of machines designed to handle
intermittent processing requirements and
produce a variety of similar products.
• E-g N/C machines, robots
• Reduced cost, consistent quality, lower capital
investment than hard automation, quick
changeover
• Narrow range of variety, longer planning and
development times for being complex and
coslty.
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 Flexible Manufacturing System
(FMS)

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 The End …

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