3 Layout and Flow

Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 7
7.1

Layout and Flow
7.2
Chapter coverage
Basic layout types
Selecting a layout type
Detailed design of a layout
7.3
Layout:
The layout of an operation is concerned with the
physical location of its transforming resources, that
is deciding where to put the facilities, machines,
equipment and staff in the operation.
Layout types:
1) Fixed position layout
2) Process layout
3) Cell layout
4) Product layout
7.4
Fixed position layout
1) In a fixed position layout, the transformed resource
does not move between its transforming resources.
2) Equipment, machinery, plant and people who do
the processing move as necessary because the
product or customer is either:
i. Too large
ii. Too delicate or
iii. Objects being moved
7.5
Process layout
1) In a process layout, similar processes or processes
with similar needs are located together because:
i. It is convenient to group them together or
ii. The utilization of the transforming resource is
improved
2) Different products of customer have different
requirements therefore they may take different
routes within the process.
3) The flow in a process layout can be very complex.
7.6
An example of a process layout in a library
showing the path of just one customer
Entrance Exit
On-line and
CD-ROM
access room
Loan books in subject order
E
n
q
u
i
r
i
e
s

Store
room
Counter staff
Copying area
C
o
m
p
a
n
y

r
e
p
o
r
t
s

To
journal
sack
Current
journals
Reserve
collection
Reference
section
Study desks
7.7
Cell layout
1) In a cell layout, the transformed resources entering
the operation move into a cell in which all the
transforming resources it requires in located.
2) After being processed in the cell, the transformed
resource may move to a different cell in the
operation or it may be a finished product or service.
3) Each cell may be arranged in either a process or
product layout.
4) The cell type layout attempts to bring order to the
complex flow seen in a process layout.
7.8
The ground floor plan of a department store
showing the sports goods shop-within-a-shop
retail cell
Sports shop
Menswear
Womens clothes
Luggage
and gifts
Confectionery,
newspaper,
magazines and
stationery
Books
and
videos
Footwear
Perfume
& jewellery
Elevators
Entrance
7.9
Product layout
1) In a product layout, the transformed resource flow
a long a line of processes that has been
prearranged.
2) Flow is clear, predictable and easy to control.
7.10 An army induction centre with uses
product layout
Lecture theatre
Uniform
issuing
area
Uniform
store
Waiting
area
Waiting
area
Doctor
Doctor
Doctor
Doctor
Doctor
Doctor
Blood
test
Blood
test
Blood
test
X-ray
X-ray
X-ray
Record
personal
history and
medical
details
7.11
A restaurant complex with all four basic
layout types
Fixed-position layout
service restaurant
Cell layout buffet
Line layout cafeteria
Cool room
Freezer
Vegetable prep
Grill
Preparation
O
v
e
n

Process layout kitchen
Main course
buffet
S
t
a
r
t
e
r

b
u
f
f
e
t

D
e
s
e
r
t

b
u
f
f
e
t

Service line
7.12
Fixed-position
layout
Product
layout
Cell layout
Process
layout
Volume
Low High
V
a
r
i
e
t
y

L
o
w

H
i
g
h

Flow is
intermittent
Regular flow more important
Flow
becomes
continuous
R
e
g
u
l
a
r

f
l
o
w

m
o
r
e

f
e
a
s
i
b
l
e

Volume-variety relationship
7.13
Project process
Jobbing process
Batch process
Mass process
Continuous process
Professional services
Service shops
Mass services
Fixed position layout
Process layout
Cell layout
Product layout
The physical position
of all transforming
resources
The flow of the
operations
transformed resources
Process type
Basic layout type
Detailed design of
layout
Volume and
variety
Strategic
performance
objectives
Decision 1
Decision 2
Decision 3
Layout selection steps
7.14
Selecting a layout type
7.15
1) The nature of the basic layout types
B asic layout
types
Manufacturing
process types
Service
process types
Fixed
position layout
Project processes
Process layout
Cell layout
Product layout
Jobbing processes
Batch pro cesses
Mass processes
Continuous processes
Professional
services
Service shops
Mass services
Project processes
7.16
2) Advantages and disadvantages
Fixed
position
layout
Process
layout
Cell
layout
Product
layout
Disadvantages
Advantages
- Very high mix
and product
flexibility
- Product/customer
not moved or
disturbed.
- Very high unit cost.
- Scheduling space
and activities can be
difficult.
- High mix and
product flexibility
- Relatively robust
if in the case of
disruptions
Low utilization of
resources.
Can have very high
WIP
Complex flow.
- Good compromise
between cost and
flexibility
- Fast throughput.
- Group work can
result in good
motivation
Can be costly to
rearrange existing
layout
Can need more plant
and equipment
Lo- w unit costs for high
volume
- Gives Opportunities
for specialization of
equipment
Can have low mix and
flexibility
Not very robust to
disruption
Work can be very
repetitive.
- High variety of
tasks for staff
- Easy supervision
of equipment of
plant
- Gives Opportunities
for specialization of
equipment
7.17
(a) The basic layout types have different fixed and
variable cost characteristics which seem to determine
which one to use. (b) In practice the uncertainty about
the exact fixed and variable costs of each layout means
the decision can rarely be made on cost alone
Use fixed-position
Use fixed-position or process
Use process
Use process or cell
Use process or cell or product
Use cell or product
Use product
Volume
C
o
s
t
s

Fixed-position
Process
Cell
Product
Volume
C
o
s
t
s

Use
product
Use
cell
Use
process
Use
fixed-
position
(a) (b)
? ? ? ?
3) Consider total cost
7.18
Detailed design of a layout
7.19
Fixed position layout design:
The location of resources for each project is unique
and it will be determined on the convenience of
transforming resources themselves.
Although there are techniques which held to locate
resources on fixed position layouts, they are not
widely used because this layout can be very
complex and planned schedules do change
frequently.
7.20
Process layout design:
When cost of traveling is important:
Collecting information such as:
number of loads per day
cost per distance traveled
When process relationship is important
Relationship chart
7.21 Collecting information in process layout
If direction is not
important, collapses
to
A B C D E
A 30 60 20
B 30 30
C 80
D 40
E
LOADS/DAY (b)
To
From
A B C D E
A 17 30 10
B 13 20 20
C 10 70
D 30 30
E 10 10 10 10
LOADS/DAY
(a)
Or alternatively
A B C D E
A 30 60 20
B 30 30
C 80
D 40
E
LOADS/DAY (c)
LOADS/DAY (d)
A
B
C
D
E
30
30
-
40
-
-
80
60
30
20
7.23
Collecting information in process layout
To
From
A B C D E
A 17 30 10
B 13 20 20
C 10 70
D 30 30
E 10 10 10 10
If cost of flow differs
between work
centers, combine
with
LOADS/DAY
To
From
A B C D E
A 2 2 2 2
B 3 3 3 4
C 2 2 2 2
D 10 10 10 10
E 2 2 2 2
UNIT COST/DISTANCE TRAVELLED
(e)
(f)
To give
To
From
A B C D E
A 34 60 20
B 39 60 60
C 20 140
D 300 300
E 20 20 20 20
DAILY COST/DISTANCE TRAVELLED (g)
If direction is not
important, collapses
to
To
From
A B C D E
A 34 60 20
B 39 60 60
C 20 140
D 300 300
E 20 20 20 20
DAILY COST/DISTANCE TRAVELLED (h)
A B C D E
A 73 360 40
B 80 80
C 160
D 320
E
DAILY COST/DISTANCE TRAVELLED (i)
7.26 A relationship chart
CODE CLOSENESS
A Absolutely necessary
E Especially important
I Important
O Ordinary closeness
U Unimportant
X Undesirable
X
Metrology
Electronic testing
Analysis
Ultrasonic testing
Fatigue testing
E
I
I
I
A
U
O
O
U
X
DEPARTMENT
Impact testing
E
O
U
U
X
7.27
Cell layout design
1) Cells in an operation can be created based on two
interrelated decisions:
1) What is the extent and nature of the cell i.e. the
amount of direct and indirect resources the cell has as
shown in Fig 7.28
2) Which resources to allocate to which cell using:
i. Cluster analysis which process group naturally together
ii. Parts and family coding based on similar characteristics
of parts of products
OR
2) Production Flow Analysis (PFA)
Examines both product requirement and process grouping
(See Fig. 7.31)
7.28 Types of cell
High
High Low
Low
Complete
component
manufacturing cell

Lunch and snack
produce area in
supermarket
Small multi-machine
manufacturing cell

Joint reference and
copying room in a
library
Plant-within-a-plant
manufacturing
operation

Maternity unit
in a hospital
Specialist process
manufacturing cell

Internal audit group
in a bank
Amount of indirect
resources included
in the cell
Proportion of
the resources
needed to
complete the
transformation
included in the
cell
e.g.
e.g.
e.g.
e.g.
7.29
1 2 3 4 5 6 7 8
1 X X
2 X X X
3 X X X
4 X X X
5 X X X
6 X X
7 X X
8 X X X
(a) and (b) Using production flow analysis
to allocate machines to cells
Product
M
a
c
h
i
n
e
s

3 6 8 5 2 4 1 8
4 X X X
1 X X
6 X X
3 X X X
8 X X
2 X X X
5 X X X
7 X X
Product
M
a
c
h
i
n
e
s

Cell A
Cell B
Cell C
(a)
(b)
7.30
Product layout design
1) Product type layout is designed based on a
technique called line balancing. The technique
consist of the following steps:
1) Calculating the required cycle time.
2) Calculating the number of stages.
3) Producing a precedence diagram.
4) Finally allocating activities to the stages.
7.31
Cycle time:
It is the time between completed products emerging from the
process.

Example:
Suppose the regional back-office operation of a large bank is
designing an operation which will process its mortgage
applications. The number of applications to be processed is 160
per week and the time available to process the applications is 40
hours per week.
Cycle time = 40 = 1/4 hours = 15 minutes
160
1 product every 15 minutes
7.32
Number of stages
Required no. of stages = total work content
required cycle time

Where the total work content is the total quantity of work involved in
producing the product given in time.

Example:
Suppose that the bank in the previous example calculated that the
average total work content of processing a mortgage application is 60
minutes. The number of stages needed to produce a processed
application every 15 minutes can be calculated

Required no. of stages = 60 minutes = 4 stages
15 minutes
If you get a fraction round it up to the higher whole number.
7.33
Precedence diagram
This is a diagram representing the ordering of the elements which
comprise the total work content of the product or service.

Two rules when constructing the diagram:
1. The circles which represent the elements are drawn as
far to the left as possible.
2. None of the arrows which shows the precedence of the
elements should be vertical.
a b c d
e
f g
h
i
0.12 mins
0.30 mins
0.36 mins
0.25 mins
0.05 mins
0.17 mins
0.10 mins
0.08 mins
0.25 mins
7.34
Allocating activities to the stages
The general approach is to allocate elements from the precedence
diagram to the first stage, starting from the left, until the
work allocated to the stage is as close to, but less than, the
cycle time.

When the stage is full of work without exceeding the cycle time,
move to the next stage.

Two rules help to decide which activities to allocate to a stage:
1. Choose the largest that will fit into the time remaining at
the stage
2. Choose the element with the most followers.
7.35
Balancing loss
The effectiveness of the line balancing activity is measured by the
balancing loss.

This is the time wasted through the unequal allocation of work as
a percentage of the total time invested in processing the product
or service.

Balancing loss = Total idle time
No. of stages x Cycle time
7.36 Balancing loss is that proportion of the time
invested in processing the product or service
which is not used productively
0
0.5
1
1.5
2
2.5
3
1 2 3 4
L
o
a
d

Stage
Cycle time = 2.5 mins
0
0.5
1
1.5
2
2.5
3
3.5
1 2 3 4
L
o
a
d

Stage
2.3
2.5
2.2
3.0
An ideal balance where work is
allocated equally between the stages
But if work is not equally allocated the
cycle time will increase and
balancing losses will occur
Work allocated to stage
Idle time
Calculating balancing loss:
Idle time every cycle =(3.0 - 2.3) +
(3.0 - 2.5) +
(3.0 - 2.2) = 2.0 mins
Balancing loss = 2
4 x 3.0
= 0.1667
= 16.67%
7.37
Worked Example
Consider Karlstad Kakes, a manufacturer of specialty cakes, which has
recently obtained contract to supply a major supermarket chain with a specialty
cake in the shape of a space rocket. It has been decided that the volumes
required by the supermarket warrant a special production line to perform the
finishing, decorating and packing of the cake. This line would have to carry
out the elements shown in the next slide, which also shows the precedence
diagram for the total job. The initial order from the supermarket is for 5000
cakes a week and the number of hours worked by the factory is 40 per week.
From this:

The required cycle time = 40 hrs x 60 mins = 0.48 mins
5000
The required number of stages = 1.68 mins (total work content)
0.48 mins (required cycle time)
= 3.5 stages
7.38
Element listing and precedence diagram
for Karlstad Kates
Element - - De-tin and trim 0.12 mins
a
Element - Reshape with off-cuts 0.30 mins
b
Element - Clad in almond fondant 0.36 mins
c
Element - Clad in white fondant 0.25 mins
d
Element - Decorate, red icing 0.17 mins
e
Element - Decorate, green icing 0.05 mins
f
Element - Decorate, blue icing 0.10 mins
g
Element - Affix transfers 0.08 mins
h
Element - Transfer to base and pack 0.25 mins
i
Total work content = 1.68 mins
a b c d
e
f g
h
i
0.12 mins
0.30 mins
0.36 mins
0.25 mins
0.05 mins
0.17 mins
0.10 mins
0.08 mins
0.25 mins
7.39
Allocation of elements to stages and
balancing loss for Karlstad Kates
a b c d
e
f g
h
i
0.12 mins
0.30 mins
0.36 mins
0.25 mins
0.05 mins
0.17 mins
0.10 mins
0.08 mins
0.25 mins
Stage 1 Stage 2 Stage 3 Stage 4
0
0.1
0.2
0.3
0.4
0.5
0.6
1 2 3 4
Idle time every cycle = (0.48 - 0.42) + (0.48 - 0.36) + (0.48 - 0.42) = 0.24 mins
Proportion of idle time per cycle = 0.24 = 12.5%
4 x 0.48

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Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 7

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