CHAPTER 6

FACILITY LAYOUT

Learning Objectives

After reading this chapter, you will be able to

define the meaning of facility layout;
describe the four basic layout types;
select the most suitable layout type depending on the operation environment;
use layout design techniques to design the detailed layout.

Facility layout is the physical configuration of departments, workstations, and

equipment in the transformation process. Efficiency of the operations depends upon
the physical layout of facilities. Layout is one of the most important characteristics of
both manufacturing and service operations system. Material flow, productivity, and
human relationships are all affected by the facility layout. Facility layout decision is
closely related with the process design.

BASIC PRODUCTION LAYOUT FORMATS

There are many different ways of arranging the operations resources. These
arrangements can be derived from four basic layout types. They are:
process layout
product layout
cellular layout
fixed position layout

Process Layout

Process layout is also referred to as functional layout. In this layout work centers or
departments are arranged in groups based on what they do. All the resources that
perform similar tasks are located together, so that materials or customers can travel
through the resources in any order. Because the process layout is flexible, it can be
used to provide highly customized products.
70 Operations Management: Concepts and Applications

However, the flexibility comes at the expense of efficiency and quick response
time and brings with them a complex managerial environment. Job shops,
distribution warehouses, hospitals, and office buildings often use a process layout.
Figures 6.1 and 6.2 show process layout for a hospital and machine shop
respectively.

OPD Pharmacy Parking

X Ray Room
Ward 01

Laboratory
Ward 02

Operation Children Maternity

Theatre Ward Ward

Figure 6.1: Process Layout for Hospital

Lathe Department Receiving &

Shipping
L L L

L L L

Milling Department Drilling Department Painting Department

M M D D P

M M D D P

Grinding Department Assembly Department

G G G
A A A
G G G

Figure 6.2: Process Layout for Machine Shop

 Facility Layout 71

Product Layout

Product layout is also referred to as flow-shop layout. In a product layout,

equipment and work stations are arranged according to the process steps by which the
product is made. The production resources in the product layout are dedicated solely
to the creation of one product type; they cannot be used for other purposes. The flow
of products, information or customers in product layout is predictable, less complex
and therefore relatively easy to control. This layout is typically used in mass-
production assembly operations.
Product layout allows production and material-handling tasks to be automated,
thus reducing the need for skilled labor. Product layout enables the production of
large quantities of the same item at very low cost. This advantage is particularly
important when standardized products are offered to the customer. The disadvantage
of a product layout is its lack of flexibility. To introduce a new model, new tooling
should be installed to the production line. Car assembly plants, chemical plants and
self service cafeterias are examples for product layout. Figure 6.3 graphically
illustrates a product layout, which consists of four work stations.

Raw materials Station Station Station Station

Finished
or 1 2 3 4
item
customer

Figure 6.3: Product Layout

Cellular Layout

Cellular layout is also called group technology layout. This type of layout groups
dissimilar machines into work cells to work on products that have similar processing
requirements. Cellular layout reduces the part movements since the products are
processed in a single cell. It also reduces the scheduling complexities. Cellular layout
is designed to obtain much of the efficiency of a product layout without sacrificing
flexibility. Using many cells, a facility with such a layout can produce a variety of
items. Cellular layouts can be much more flexible than product layouts and much
more efficient than process layouts. Variety of items within a certain range can be
efficiently produced using a cellular layout. For example, apparel plants use cellular
layouts, where the plant is divided into number of cells and they are dedicated for
different garment categories. Department stores are another example for cellular
layout, where items are arranged group wise (e.g. clothing in one area and food items
in another area). Cellular layout is more appropriate in mid-volume and mid-variety
production environment. Figure 6.4 shows a cellular layout with four cells, which are
designed for four part families.
72 Operations Management: Concepts and Applications

M2 M2

L1 D1 L2 D2
Material Receiving

Cell 1 Cell 2

Assembly Area
G M1 G
M1

M1 D2 L1 G
Cell 3 Cell 4

M2 D1 M1 L2

L3 D3

Figure 6.4: Cellular Layout

Fixed-Position Layout

In a fixed-position layout, product remains at one place and manufacturing facilities

are moved to the product. Unlike other layouts, materials do not travel through work
stations. Manufacturers of large industrial equipment frequently use a fixed-position
layout for final assembly, either immediately prior to shipment or at the customers
manufacturing facility.
The benefit of a fixed-position layout is that highly specialized experts,
materials, and resources can be brought in to work on the product. The disadvantages
of the fixed-position layout include a lack of efficiency and difficulty in scheduling
widely dispersed resources. Shipbuilding yards, operation theaters and high-class
service restaurants are some examples for fixed position layout.

SELECTION OF LAYOUT TYPE

The explanations on four basic layout types show that the flow of materials and
customers will very much depend on the layout chosen. The importance of flow
depends on volume and variety characteristics of the operation. As volume increases
the flow is a significant factor for the efficiency of operation. When volume is very
low and variety is relatively high, flow is not a major issue. On the other hand, in
high variety product environment, flow cannot be stream lined due to diverse
processing needs of the product. The flow is mainly decided by the type of layout
and hence the choice of layout is influenced by volume-variety characteristics of the
 Facility Layout 73

operations (see Figure 6.5). On the other hand, volume-variety characteristics of the
operations influence the process selection. Therefore, layout and process selection are
integral decisions to be taken in designing the operations system. Figure 6.6 shows
the relation between the layout and process types. The relationship between process
type and basic layout type is not totally deterministic. One process type does not
necessarily imply one particular basic layout. Each process type could adopt different
basic layout types as shown in the Figure 6.6.

Low VOLUME High

High Fixed-position layout

V
A
R Process layout
I
E
T
Y
Cell layout

Low Product layout

Figure 6.5: Volume-variety Relationship and Layout Type

Process type Layout type

Project processes
Fixed position layout

Jobbing processes

Process layout

Batch processes
Cellular Layout

Mass Process
Product Layout
Continuous Process

Figure 6.6: Relationship between Process and Layout

74 Operations Management: Concepts and Applications

Each layout type has its own advantages and disadvantages. Table 6.1 shows of
the significant advantages and disadvantages of the basic layout types.

Table 6.1: Advantages and Disadvantages of the Layouts

Layout Advantages Disadvantages

Process High product and mix Low utilization of
flexibility machines
Possibility in re-routing in High work-in-progress or
machine breakdowns customer queuing
Easy supervision of machinery Complexity in material
and equipment flow

Product Low unit costs for high volume Low product and mix
Opportunities for specialization flexibility
of equipment and automation Not robust for disruptions
Smooth flow of materials or
customers

Cell Good compromise between Duplication of machinery

cost and flexibility for and equipment
relatively mid-variety
operations
Fast throughput and less
movement
Employee motivation through
team work

Fixed Position Very high mix and product Very high unit costs
flexibility Difficulty in scheduling
Less disturbance to product or space and activities
customers Much movement of
equipment and staff

DETAILED DESIGN OF LAYOUT

Once basic layout type has been decided the next step is to design the detailed layout.
The output from the detailed design stage of layout is:
the exact location of all facilities which include plant, department, work centres,
equipment and warehouse;
the space allocated to each work centre;
 Facility Layout 75

the tasks which will be carried out by each work centre.

In designing the detailed layout, it is useful to consider the objectives of good

layout. Following are some of the important objectives; however the importance of
the objectives will depend on the circumstance.
Reduction of flow: A good layout reduces the distance travelled by materials,
customers and information.
Efficient use of space: Layout should effectively use the total space available
(both height and floor area)
Safety: Safety of the employees should be ensured in layout design. For example,
placing fuel store and welding department close to each other may cause fire
hazard. This kind of situations should be avoided in designing layout.
Comfort of staff: Staff should be placed away from discomfort areas of
operations.
Facilitate management and coordination: Managers and supervisors should have
easy communication and accessibility to the activities managed and coordinated
by them.
Flexibility: Layouts need to be changed with the periodic changes of operations.
Convenience to customer: Customer should be able to obtain the service easily.

Design of Process Layout

The detailed design of the process layout decides the definite location of the work
centres. Layout decision is much complex since there are many options to arrange
work centres. The importance of the closeness between departments is the major
decisive factor in designing the process layout. Importance of the closeness between
two departments is mainly decided by the flow between the departments. In addition
to the flow, there are other non-flow factors which influence the closeness.

There is some essential information required for the detailed design of process
layout:
the area required by each department and constraints on the shape of the area
the degree and direction of flow between departments
the desirability of departments being close together due to non flow factors
the desirability of departments being close to some fixed point in the layout

Example 6.1: Design of Process Layout

It is required to design a process layout of six departments (A, B, C, D, E and F).
Departments A and B require area of 2 units each whereas the other departments
need area of one unit.
76 Operations Management: Concepts and Applications

Steps for detailed design of layout are explained below:

Collect flow information between departments. There are two types of

information: (i) number of loads between departments and (ii) transport cost of
unit load per unit distance. These are given in Figure 6.7a and 6.7b.

To
A B C D E F
From
A 16 - 30 10 15
B 14 20 - 18 -
C - 10 - 65 -
D 30 - - 30 20
E 10 10 15 10 35
F 12 15 - 20 -

Figure 6.7a: Flow between Departments (Loads/day)

To
A B C D E F
From
A 2 2 2 2 2
B 3 3 3 3 3
C 2 2 2 2 2
D 5 5 4 5 4
E 3 3 3 3 3
F 2 2 2 2 2

Figure 6.7b: Transport Cost of Unit Load per Unit Distance

Above two matrices can be converted to daily transport cost between departments
per unit distance as shown in Figure 6.8a.

To
A B C D E F
From
A 32 - 60 20 30
B 42 60 - 54 -
C - 20 - 130 -
D 150 - - 150 80
E 30 30 45 30 105
F 24 30 - 40 -

Figure 6.8a: Daily Transport Cost between Departments per Unit Distance
 Facility Layout 77

Figure 6.8a can be further reduced by summing about the diagonal of the matrix
and represented as given in Figure 6.8b.

To
A B C D E F
From
A 74 - 210 50 54
B 80 - 84 30
C - 175 -
D 180 120
E 105
F

Figure 6.8b: Daily Transport Cost between Departments per Unit Distance

Based on the flow between departments, the importance of closeness is given in

six levels as shown in Table 6.2. The importance of closeness between two
departments is represented by a code and numerical weight is assigned to the
importance.

Table 6.2: Importance of Closeness

Code Closeness Numerical
weights
A Absolutely important 16
E Especially important 8
I Important 4
O Ordinary closeness 2
U Unimportant 0
X Undesirable -80

Transport cost matrix can be converted to relationship chart assigning closeness

ratings as shown in Figure 6.9a or 6.9b.

A B C D E F
A I U A O O
B I U I O
C U A U
D A E
E E
F

Figure 6.9a: Relationship Chart

78 Operations Management: Concepts and Applications

A
I
B U
I
A
C U O
U I O
D A O
U
A
E E
E
F

Figure 6.9b: Relationship Chart

Departments are placed so that departments higher closeness ratings are close
each other. Designer can do this trial and error by interchanging the departments.
There are number of software tools available for deciding the best layout.
Algorithm is used in CORELAP (COmputerized RElationship LAyout
Planning) software is presented here to decide the final layout.

Procedure of CORELAP
1. Calculate the Total Closeness Rating (TCR) of each department.
2. Select the department with the highest TCR as the first one. Place it at the centre
of the available space.
Tie-breaking rule: Department having the largest area
3. Scan the relationship chart. Select the department having A closeness rating with
the first one. If none is available, then select E, I and so on. If two or more, select
the one having the highest TCR. If still tied, use tie rule.
4. For the third one, select the department having A with the first one. If none,
select the department having A rating with the second one. If none is available,
select the department having E with the first one and so on.
5. Repeat until all the departments are selected.

For the illustrative example:

Total closeness ratings
TCRA = 4+0+16+2+2 = 24 [corresponds to I, U, A, O, and O]
TCRB = 4+4+0+4+2 = 14 [corresponds to I, I, U, I, and O]
Similarly,
TCRC = 20, TCRD = 40, TCRE = 46, TCRF = 20
 Facility Layout 79

According to CORELAP algorithm order of placing departments is E, D, C, A, F and

B.

Final layout is in Figure 6.10.

C E D F

B A

Figure 6.10: Final Layout of Illustrative Example

Incorporating Non-flow Factors

There are certain situations closeness is influenced by the factors other than flow
factors. Then these non-flow factors should be considered in developing the
relationship chart.
For example;
departments B and F share same equipment and hence closeness is absolutely
important
department D and E should not be placed close to each other due to safety
reasons (welding department and fuel storage should not be close to each other).

Relationship chart should be modified as follows (Figure 6.11).

A B C D E F
A I U A O A
B I U I O
C U A U
D A X
E E
F

Figure 6.11: Modified Relationship Chart

New relationship chart can be used to develop the layout similar to the previous
steps.
80 Operations Management: Concepts and Applications

Design of Product Layout

The basic difference between product layout and process layout is the pattern of work
flow. Product layouts are designed to be especially efficient in the creation of a
standardized product. In product layouts, including assembly lines, all work stations
are arranged in a suitable sequence; tasks are performed repetitively, with little
variation in processing time; and virtually no inventory is kept between workstations.
Thus, stations cannot operate independently, and the speed of the slowest workstation
determines the speed of the entire production system. The difference between the
speed of the slowest workstation and the speed of other stations represents wasted
time.
Consider the production line in Figure 6.12. In this line repetitive products are
coming out of the system for every 6 minutes. Work station 2 (WS2) is the bottleneck
station and it decides the cycle time and hence the production rate of the line. Other
work stations (WS1 and WS2) are not idle 3 minutes and 2 minutes for each product.
This is an unbalanced line and not efficient. To get the maximum productivity, the
work content should be equally divided among work stations. This is known as line-
balancing. Line-balancing is particularly important in designing the assembly lines.

WS1 WS2 WS3

3 minutes 6 minutes 4 minutes

Figure 6.12: Unbalanced Production Line

Steps in Balancing an Assembly Line

1. Specify the sequential relationships among tasks using a precedence diagram.
This diagram consists of circles (represent individual tasks) and arrows (indicate
the order of task performance).
2. Determine the required workstation cycle time. Cycle time (C) is the time
between successive units coming off the end of the line.
Time available
C
Required output
3. Determine theoretical minimum number of workstations (Nt) required.
Total work content (T)
Nt
Cycle time (C)
4. Select a primary rule by which tasks are to be assigned to workstations, and
secondary rule to break ties.
 Facility Layout 81

5. Assign tasks, one at a time, to the first workstation until the sum of the task times
is equal to the workstation cycle time, or no other tasks are feasible because of
time or sequence restriction. Repeat the process for Workstation 2, 3 and so on.
6. Evaluate the efficiency of the line.
Total work content (T)
Efficiency
Actual number of workstations (N a ) Cycle time(C)
7. If efficiency is unsatisfactory, rebalance using a different decision.

Example 6.2: Line balancing

An electric fan assembly line is to operate 7 hours per day with a desired output of
100 units per day. Table 6.3 contains information on this products task, task time,
and precedence relationship. Design a balanced line which meets the output
requirement.

Table 6.3: Information on Products Task, Task Time, and Precedence Relationship

Task Time (min) Description Predecessors

A 1.8 Assemble frame None
B 1.2 Mount switch A
C 3.25 Assemble motor housing None
D 1.2 Mount motor housing in frame A, C
E 0.6 Attach fan blade D
F 0.9 Assemble and attach safety grill E
G 1.0 Attach wire cord B
H 1.4 Test F, G

Solution

Step 1: Structure precedence diagram

1.8 1.2 1
1.4
A B G
H

C D E F

3.25 1.2 0.6 0.9

Figure 6.13: Precedence Diagram

82 Operations Management: Concepts and Applications

Step 2: Determine the workstation cycle time.

Time available 7 60 min day

C = = 4.2 min/unit
Required output 100 units day

Step 3: Determine the theoretical minimum number of workstations required

Total work content (T) 1.8 1.2 3.25 1.2 0.6 0.9 1 1.4 min/unit
Nt
Cycle time (C) 4.2 min/unit

11.35 min/unit
= 2.702 = 3 (rounded up)
4.2 min/unit

Step 4: Select the assignment rule. In general the strategy is to use a rule assigning
tasks that either have many followers or are of long duration. In this case, we use
assignment rules in following order.
a. Assign task in order of the largest number of following task.
b. Assign tasks in order of longest task time when there is a tie between largest
number of following task.

Table 6.4: Number of Followers and Task Time

Task No. of Time (min)
followers
A 6 1.8
C 4 3.25
D 3 1.2
B 2 1.2
E 2 0.6
F 1 0.9
G 1 1.0
H 0 1.4

Step 5: Make task assignments to form workstation 1, workstation 2, and workstation

3 and so forth until all tasks are assigned. In assigning tasks following constraints
should be noted: Maximum processing time of work station should not exceed cycle
time (4.2 min) and predecessors should have been already allocated. Table 6.5 shows
the assignment of tasks.
 Facility Layout 83

Table 6.5: Assignment of Task to the Workstations

Task Task Time Remaining
(min) Unassigned
Time (min)
Station 1 A 1.8 2.4
B 1.2 1.2
G 1.0 0.2 (idle)
Station 2 C 3.25 0.95 (idle)
Station 3 D 1.2 3.0
E 0.6 2.4
F 0.9 1.5
H 1.4 0.1 (idle)

Step 6: Calculate the efficiency of the assembly line

Total work content (T)

Efficiency
Actual no. of workstation (N a ) Workstation cycle time (C)

11.35 min/ units

0.901
34.2 min/ units

Design of Cellular Layout

Cellular layout is a compromise between the efficiency of product layout and the
flexibility of process layout. Products are grouped based on the similarities of
processing requirements. A dedicated cell is formed for each product group and work
centres or machines required for the product group are assigned to the cell.
Production flow analysis is the most popular approach in formation of cells
which examines both product and process requirements simultaneously. The
following example shows a manufacturing operation which groups machines based
on products it produces.

Example 6.3: Production Flow Analysis

Product machine matrix in Figure 6.14 shows the products and the corresponding
machines on which the products are processed.
84 Operations Management: Concepts and Applications

Products
1 2 3 4 5 6 7 8
A X X
B X X X
C X X X
Machines

D X X
E X X X
F X X X
G X X
H X X X

Figure 6.14: Machine-Product Matrix

Rows and columns of the matrix are rearranged so that products groups which are
processed on the same machines can be identified (Figure 6.15).

Products
3 6 8 5 2 4 1 7
H X X X
A X X
E X X X
Machines

C X X X
D X X
B X X X
F X X X
G X X

Figure 6.15: Product and Machine Groups

Three cells can be formed as follows:

Cell 1: machines A, E, H (for products 3, 6, 8)
Cell 2: machines C, D (for products 2, 5)
Cell 3: machines B, F, D (for products 1, 4, 7)

It should be noted that product 8 needs to be processed in both cell 1 and cell 2. This
situation can be avoided if machine C is duplicated for cells 1 and 2.
 Facility Layout 85

CHAPTER HIGHLIGHTS

There are four basic layout types: process layout, product layout, cellular layout,
and fixed position layout.
Volume-variety relationship of products is a major decisive factor of layout type.
Both flow factors and non-flow factors are considered in designing the process
layout.
Line balancing is important to maximize the efficiency of product layout.
Machines cells are formed based on processing requirements of products.

DISCUSSION QUESTIONS

1. Give examples of organizations that have predominantly product, process, and

fixed-position layouts.
2. Some argue that employees should have a major voice in layout design. Discuss
this issue.
3. Explain why layout decision is related with process selection.
4. Group technology reduces scheduling complexities. Discuss.
5. What are the suitable layouts for following?
a) Departure section of airport
b) Apparel manufacturing
c) University library
d) Automobile repair-shop

PROBLEMS

1. To plan a new office layout, pairs of departments were rated according to how
important it was to have the pair close to one another. On a scale of 1 (low
importance) to 10 (high importance) ratings are given in the table below. The
overall space is three units wide and four units long; all departments are one unit
by two units. What is your recommended layout?

Department Design Accounting IT Sales Admin Planning

Design - 5 10 3 1 5
Accounting - 10 7 5 7
IT - 7 4 6
Sales - 8 6
Admin - 10
Planning -
86 Operations Management: Concepts and Applications

2. An assembly line is to be designed to operate 7 hours per day and supply a

steady demand of 300 units per day. Here are the task and their performance
times.

Task Preceding Task Performance Time

(seconds)
A - 60
B - 40
C A 45
D A 10
E B 30
F C 20
G D, E 50
H E 50
I F 20
J G 25
K H, I 20
L J, K 25

a) Draw the precedence diagram

b) What is the cycle time?
c) Assign the tasks into workstations to give an efficient line.

3. Given below are tasks involved and their time requirements to produce a
consumer electronic product in a production line.

Task Task time Preceding task

(Seconds)
A 20 -
B 40 A
C 15 D,E,F
D 13 B
E 10 B
F 8 B
G 60 A
H 75 G
I 60 H
J 55 C,I
Total 356

a) If the required production rate is 40 units per hour, what would be the cycle
time per unit?
 Facility Layout 87

b) Determine the most efficient production line to meet the production

requirements given in (a) above showing the allocation of tasks among
workstations.
c) What is the efficiency of the line?

4. Processing requirements of 10 parts are given in the following table.

Parts Machine Sequence
1 A, B, D
2 C, F, G
3 E, H, K
4 D, A
5 G, C, F
6 B, D, A
7 K, I, E
8 G, C
9 B, D, I
10 I, K, H

a) Draw the machine-part matrix.

b) Identify part families and production cells.

5. A printing shop wants to locate its seven departments in an area that is 80

ft wide and 100 ft long. Department sizes are as follows:

Department Length (ft) Width (ft)

Layout 20 20
Cutting 40 20
Shipping 20 20
Receiving 40 30
Printing 50 40
Binding 40 40
Art work 40 40

The expected annual number of loads moving between departments is

given in the following table. Develop a suitable layout.
88 Operations Management: Concepts and Applications

To Department
From Art
Layout Cutting Shipping Receiving Printing Binding
Department work
Layout - 800 - - - - -
Cutting - - - 200 - 500 -
Shipping - - - 600 - - -
Receiving - 500 100 - 500 100 -
Printing - - - - - 1,500 200
Binding - 100 1,200 - 300 - -
Art work - 100 - - 100 - -