Prof.

Park Kyung-Hye

Chapter 6
Process Selection and Facilities Layout
Explain the strategic importance of process selection
Explain the influence that process selection has on an organization
Describe the basic processing types
Discuss automated approaches to processing
Explain the need for management of technology
List some reasons for redesign of layouts
Describe the basic layout types
List the main advantages and disadvantages of product layouts and
process layouts
Solve simple line-balancing problems
Develop simple process layouts

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

Forecasting

Capacity
Planning

Product and
Service Design

Technological
Change

Facilities and
Equipment

Layout
Process
Selection

Work
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

Job Shop

To what degree?

3. Volume

Batch

Expected output?
Repetitive

Continuous

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Types of Processing

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Product-Process Matrix
Figure. Product and service processes

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Process Choice Effects

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Product and Service Profiling

Process selection involves
Substantial investment in equipment
Has a very specific influence on layout

Product or service profiling

Linking key product or service requirements to process
capabilities
Key dimensions relate to

Range of products or services that will be processed

Expected order sizes
Pricing strategies
Expected frequency of schedule changes
Order-winning requirements

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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.
2.
3.
4.
5.
6.

What level of automation is appropriate?

How would automation affect system flexibility?
How can automation projects be justified?
How should changes be managed?
What are the risks of automating?
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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The Need for Layout Planning

Changes in output volume or product mix
Changes in methods or equipment
Changes in environmental or other legal
requirements
Morale problems

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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
or customer

Material
and/or
labor

Station
1

Material
and/or
labor

Station
2

Material
and/or
labor

Station
3

Station
4

Finished
item

Material
and/or
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

A group of parts with similar

manufacturing process requirements
but different design attributes

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.

[Auto Assembly]
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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

Cycle time and Output time

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 m in

t
Cycle time

where
N m in 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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Assigning Tasks to Workstations

Some Heuristic (Intuitive) Rules:
Assign tasks in order of most following tasks
Count the number of tasks that follow

Assign tasks in order of greatest positional weight.

Positional weight is the sum of each tasks time and the

times of all following tasks.

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Line Balancing Procedure

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Measuring Effectiveness
Balance delay (percentage of idle time)
Percentage of idle time of a line

Balance Delay

Efficiency

Idle time per cycle

N actual Cycle time

where
N m in Actual number of stations

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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Closeness Ratings
Richard Muther developed a more general
approach for multiple criteria problem
Muther suggests the following list:
Use same equipment or facilities
Share the same personnel or records

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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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