6-1 Process Selection and Facility Layout

Operations Management

William J. Stevenson

8th edition
 6-2 Process Selection and Facility Layout

CHAPTER
6

Process Selection
and Facility Layout

Operations Management, Eighth Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights
6-3 Process Selection and Facility Layout

Introduction

• Process selection
• Deciding on the way production of goods or
services will be organized
• Major implications
• Capacity planning
• Layout of facilities

• Equipment

• Design of work systems

6-4 Process Selection and Facility Layout

Process Selection and System Design

Figure 6.1

Facilities and
Forecasting Capacity Equipment
Planning

Product and Layout

Service Design

Process
Technological Selection Work
Change Design
6-5 Process Selection and Facility Layout

Process Selection
• Variety
• How much Batch
• Flexibility
• What degree
• Volume
Job Shop Repetitive
• Expected output

Continuous
6-6 Process Selection and Facility Layout

Managing Process

• Process
• a group of related tasks with specific inputs and outputs
• A process involves the use of an organization’s resources to provide something of
value.

• Process strategy
• An organization’s overall approach for physically producing goods and services.
• Process strategy is the pattern of decisions made in managing processes so that
they will achieve their competitive priorities.

• Process design
• tasks need to be done and coordinated among functions, people, and organizations
6-7 Process Selection and Facility Layout

Managing Process (Contd…)

Major process decisions include:

• Process Structure / Choice
• Product Process Matrix / Service Process Matrix
• Customer Involvement
• role of customer in production process
• Vertical Integration
• extent to which firm will produce inputs and control outputs of each stage
of production process
• Resource Flexibility
• ease with which resources can be adjusted in response to changes in
demand, technology, products or services, and resource availability.
• Capital Intensity
• mix of capital (i.e., equipment, automation) and labor resources used in
production process.
6-8 Process Selection and Facility Layout

Product-Process Matrix

High Continuous
production

Mass
Volume

production

Batch
production
Projects
Low
Low High
Standardization
6-9 Process Selection and Facility Layout

Types of Processes
PROJECT BATCH MASS CONT.

Made-to- Made-to-
Type of
Unique order stock Commodity
product
(customized) (standardized )

One-at-a- Few
Type of Mass Mass
customer time individual
market market
customers

Product
demand Infrequent Fluctuates Stable Very stable
6-10 Process Selection and Facility Layout

Types of Processes (cont.)

PROJECT BATCH MASS CONT.

Demand Low to
Very low High Very high
volume medium

No. of Infinite Many,

different Few Very few
products variety varied

Repetitive, Continuous,
Production Long-term Discrete, job
system assembly process
project shops
lines industries
6-11 Process Selection and Facility Layout

Types of Processes (cont.)

PROJECT BATCH MASS CONT.

General- Special- Highly

Equipment Varied purpose purpose automated

Primary Mixing,
type of Specialized
Fabrication Assembly treating,
work contracts
refining

Experts, Limited
Worker Wide range Equipment
skills crafts- range of
of skills monitors
persons skills
6-12 Process Selection and Facility Layout

Types of Processes (cont.)

PROJECT BATCH MASS CONT.

Efficiency, Highly efficient,

Custom work, Flexibility,
Advantages quality
speed, large capacity,
latest technology
low cost ease of control

Capital
Non-repetitive, Costly, slow, Difficult to change,
Dis- investment;
small customer difficult to far-reaching errors,
advantages lack of
base, expensive manage limited variety
responsiveness

Machine shops, Automobiles,

Construction, televisions,
print shops, Paint, chemicals,
Examples shipbuilding,
bakeries, computers, foodstuffs
spacecraft
fast food
6-13 Process Selection and Facility Layout

Service-Process Matrix

Low
Service
Factory
Labor Intensity

Mass
Service

Service
Shop
Professional
Service
High
High Customization Low
6-14 Process Selection and Facility Layout

Customer-Contact Model for

Processes in Services
Less Customer Contact and Customization

Service Package
(1) (2) (3)
Process High interaction with Some interaction with Low interaction with
customers, highly customers, standard customers, standardized
Characteristics customized service services with some options services
Less Complexity, Less Divergence, More Line Flows

(1)
Jumbled flows,
Front office
complex work with
many exceptions

(2)
Flexible flows with
some dominant
Hybrid office
paths, moderate job
complexity with
some exceptions

(3)
Line flows, routine Back office
work easily
understood by
employees
6-15 Process Selection and Facility Layout

Automation
• Automation: Machinery that has sensing and
control devices that enables it to operate
• Fixed automation
• Programmable automation
6-16 Process Selection and Facility Layout

Automation

• Computer-aided design and

manufacturing systems (CAD/CAM)
• Numerically controlled (NC) machines
• Robot
• Manufacturing cell
• Flexible manufacturing systems(FMS)
• Computer-integrated manufacturing (CIM)
6-17 Process Selection and Facility Layout

Facilities Layout

• Layout: the configuration of departments,

work centers, and equipment, with particular
emphasis on movement of work (customers
or materials) through the system
6-18 Process Selection and Facility Layout

Importance of Layout Decisions

• Requires substantial investments of money

and effort
• Involves long-term commitments

• Has significant impact on cost and

efficiency of short-term operations
6-19 Process Selection and Facility Layout

The Need for Layout Decisions

Inefficient operations
For Example: Changes in the design
High Cost of products or services
Bottlenecks

Accidents
The introduction of new
products or services

Safety hazards
6-20 Process Selection and Facility Layout

The Need for Layout Design (Cont’d)

Changes in
environmental Changes in volume of
or other legal output or mix of
requirements products

Morale problems
Changes in methods
and equipment
6-21 Process Selection and Facility Layout

Basic Layout Types

• Product layouts
• Process layouts
• Fixed-Position layout
• Combination layouts
6-22 Process Selection and Facility Layout

Basic Layout Types

• Product layout
• Layout that uses standardized processing
operations to achieve smooth, rapid, high-
volume flow
• Process layout
• Layout that can handle varied processing
requirements
• Fixed Position layout
• Layout in which the product or project remains
stationary, and workers, materials, and
equipment are moved as needed
6-23 Process Selection and Facility Layout
Volume – Variety Matrix
– Effect on layouts

High
Fixed Position
Layout

Process Layout
Variety
Hybrid Layout

Product Layout

Low

Low Volume High

 6-24 Process Selection and Facility Layout

Product Layout
Figure 6.4

Raw Finished
Station Station
Station Station
Station Station
Station
materials 1 22 33 44 item
or customer
Material Material Material Material

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

labor labor labor labor

Used for Repetitive or Continuous Processing

6-25 Process Selection and Facility Layout

Advantages of Product Layout

• High rate of output

• Low unit cost

• Labor specialization

• Low material handling cost

• High utilization of labor and equipment

• Established routing and scheduling

• Routing accounting and purchasing

6-26 Process Selection and Facility Layout

Disadvantages of Product Layout

• Creates dull, repetitive jobs

• Poorly skilled workers may not maintain
equipment or quality of output
• Fairly inflexible to changes in volume

• Highly susceptible to shutdowns

• Needs preventive maintenance

• Individual incentive plans are impractical

 6-27 Process Selection and Facility Layout

A U-Shaped Production Line

Figure 6.6

In 1 2 3 4

Workers

Out 10 9 8 7
 6-28 Process Selection and Facility Layout

Process Layout
Figure 6.7
Process Layout
(functional)

Dept. A Dept. C Dept. E

Dept. B Dept. D Dept. F

Used for Intermittent processing

Job Shop or Batch
6-29 Process Selection and Facility Layout

Product Layout
Figure 6.7
(cont’d)
Product Layout
(sequential)

Work Work Work

Station 1 Station 2 Station 3

Used for Repetitive Processing

Repetitive or Continuous
6-30 Process Selection and Facility Layout

Advantages of Process Layouts

• Can handle a variety of processing

requirements
• Not depend on equipment failures

• Equipment used is less costly

• Possible to use individual incentive plans

6-31 Process Selection and Facility Layout

Disadvantages of Process Layouts

• 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

6-32 Process Selection and Facility Layout

Cellular Layouts

• Cellular Production
• Layout in which machines are grouped into a
cell that can process items that have similar
processing requirements
• Group Technology
• The grouping into part families of items with
similar design or manufacturing characteristics
6-33 Process Selection and Facility Layout

Lathing Milling Drilling

L L D D
M M

D D
L L M M

Grinding

L L M M
G G

L L Assembly
G G
A A

Receiving and A A G G
shipping
6-34 Process Selection and Facility Layout

L L M D G Assembly
area

Cell 1 Cell 2 A A

Receiving L M G G

Cell 3

L M D
Shipping
 6-35 Process Selection and Facility Layout

Functional vs. Cellular Layouts

Table 6.3
Dimension Functional Cellular
Number of moves between many few
departments
Travel distances longer shorter
Travel paths variable fixed
Job waiting times greater shorter
Throughput time higher lower
Amount of work in process higher lower

Supervision difficulty higher lower

Scheduling complexity higher lower
Equipment utilization lower higher
6-36 Process Selection and Facility Layout

Other Service Layouts

• Warehouse and storage layouts

• Retail layouts

• Office layouts
6-37 Process Selection and Facility Layout
Design Product Layouts: Line
Balancing

Line Balancing is the process of assigning

tasks to workstations in such a way that
the workstations have approximately
equal time requirements.
6-38 Process Selection and Facility Layout

Cycle Time

Cycle time is the maximum time

allowed at each workstation to
complete its set of tasks on a unit.
6-39 Process Selection and Facility Layout

Determine Maximum Output

OT
Output cap acity =
CT

OT = operating time per day

D = Desired o utput rate

OT
CT = cycle tim e =
D
6-40 Process Selection and Facility Layout
Determine the Minimum Number
of Workstations Required

(D)(∑ t)
N =
OT

∑t = sum of task times

 6-41 Process Selection and Facility Layout

Precedence Diagram
Figure 6.10

Precedence diagram: Tool used in line balancing to

display elemental tasks and sequence requirements
0.1 min. 1.0 min.
A Simple Precedence
a b Diagram

c d e
0.7 min. 0.5 min. 0.2 min.
6-42 Process Selection and Facility Layout

Example 1: Assembly Line Balancing

• Arrange tasks shown in Figure 6.10 into

three workstations.
• Use a cycle time of 1.0 minute
• Assign tasks in order of the most number of
followers
6-43 Process Selection and Facility Layout

Example 1 Solution

Revised
Time Assign Time Station
Workstation Remaining Eligible Task Remaining Idle Time
1 1.0 a, c a 0.9
0.9 c c 0.2
0.2 none - 0.2
2 1.0 b b 0.0 0.0
3 1.0 d d 0.5
0.5 e e 0.3 0.3
0.3 - - 0.5
6-44 Process Selection and Facility Layout

Calculate Percent Idle Time

Idle time per cycle

Percent idle time =
(N)(CT)

Efficiency = 1 – Percent idle time

6-45 Process Selection and Facility Layout

Line Balancing Rules

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 task’s
time and the times of all following tasks.
6-46 Process Selection and Facility Layout

Example 2

0.2 0.2 0.3

a b e

0.8 0.6
c d f g h
1.0 0.4 0.3
6-47 Process Selection and Facility Layout

Solution to Example 2

Station 1 Station 2 Station 3 Station 4

a b e
f g h
c d
6-48 Process Selection and Facility Layout

Parallel Workstations

30/hr. 30/hr. 30/hr. 30/hr.

1 min. 1 min. 2 min. 1 min.

Bottleneck

30/hr. 1 min. 30/hr.

60/hr. 60/hr.
1 min. 1 min. 1 min.
30/hr.
1 min. 30/hr.

Parallel Workstations
6-49 Process Selection and Facility Layout

Designing Process Layouts

Information Requirements:
1. List of departments

2. Projection of work flows

3. Distance between locations

4. Amount of money to be invested

5. List of special considerations

6. Location of key utilities

 6-50 Process Selection and Facility Layout
Example 3: Interdepartmental Work Flows
for Assigned Departments
Figure 6.12

30

170 100
1 3 2

A B C
6-51 Process Selection and Facility Layout

• Author’s note:
• The following three slides are not in the 8e,
but I like to use them for alternate examples.
6-52 Process Selection and Facility Layout

Process Layout

Milling

Assembly
Grinding
& Test

Drilling Plating
Process Layout - work travels
to dedicated process centers
6-53 Process Selection and Facility Layout

Functional Layout

222 222 222

111

2
Mill Drill Grind

22
444 3333
444

22
33

1111
2222 Assembly
33

44
111333

33
33

44
33

4
33

111 111
33
Heat 111 Gear
3

333Lathes
treat cutting 444
6-54 Process Selection and Facility Layout

Cellular Manufacturing Layout

Heat Gear
-1111 Lathe Mill Drill -1111
treat cut

Heat
Mill Drill Grind - 2222

Assembly
222222222 treat

Heat
3333333333 Lathe Mill Grind - 3333
treat

44444444444444 Mill Drill Gear - 4444

cut