Production & Operations Management:

Facility Layout & Process planning

Dr Ravindra Ojha
(14th , 16th , 17th , 19th Jan 2023)
 Agenda
• Layout needs & objectives,

• Process categories,

• Mfg. layout categories

• Line balancing
 Strategic Layout decisions
Layout, the configuration of the Gemba (work area), is one of the key decisions in Operations
management that determines the long-run efficiency of operations.

It fundamentally rests on the process design.

Layout for manufacturing/servicing - Barber saloon, Supermarket, garment show room, Hospital,
Motorcycles, kitchen, tailoring, shuttlecock, jewelry & any Service office.

Layout has strategic implications because it establishes an organization’s competitive priorities in

regard to Quality, Capacity, Processes, Flexibility, and Cost, as well as Quality of work life of the
employees, Customer contact and organization Image.

An effective layout can help an organization achieve a strategy that supports differentiation, low
cost, or response.
https://www.youtube.com/watch?v=J-rGOZi5Mrs
 Factors Influencing Process
Choices
• Volume: Average quantity of the products produced in a manufacturing system
• Low volume: Turnkey project management firms such as L&T, BHEL & HMT
• High volume: Consumer non-durable/FMCG sector, Automobile, Chemical Processing
• Mid-volume: Consumer durables, white goods and several industrial products

• Variety: Number of alternative products and variants of each product that is offered by a
manufacturing system
• Variety of product offerings is likely to introduce variety at various processes in the
system; alternative production resources, materials, and skill of workers

• Velocity or Flow: Flow indicates the nature and intensity of activities involved in
conversion of components and material from raw material stage to finished goods stage
 Manufacturing with Volume & Variety

High Volume Mid-volume

Mid-variety High Variety

Mass Production Mixed production Project Organizations

• Petrochemicals, • Motor production • Power plants
• Automobile • Pharmaceuticals • Aircraft manufacturing
• FMCGs • White Goods • Bridges and Large
• Consumer non-durables • Consumer Durables constructions
 Process Selection
Two key questions in manufacturing process selection:
1. Variety of product / service?
2. Volume of product/service to handle?

Job
Shop

Batch

Repetitive Continuous
 Broad categories in Processing
Job Shop Batch Repetitive /Assembly Continuous
Description Customized Semi-standardized Standardized goods or services Highly standardized
goods or goods or Goods or services
services services

Advantages Able to handle Flexibility; easy Low unit Very efficient, very
a wide variety to add or change cost, high volume, efficient high volume
of work products or
services
Dis - Slow, high cost Moderate cost Low flexibility, Very rigid, lack of
advantages / unit, complex / unit, moderate high cost of downtime variety, costly to
Planning & scheduling change, very high
Scheduling complexity cost of downtime
 Process Types
(in order of decreasing volume)
1. Continuous Flow

2. Production Line

3. Job Shop Shuttlecock

4. Batch (High Volume)

5. Batch (Low Volume)

6. Project
 Continuous Flow

• Large production volumes

• High level of automation
• Basic material passed along, converted as it moves
• Usually cannot be broken into discrete units
• Usually very high fixed costs, inflexible

Oil refinery, Electrical power generation, fiber formation, public

utilities etc.
 Continuous Flow System
• Characterized by a streamlined flow of products in the operating system
• Conversion process begins with input of raw material at one end,
progresses through the system in an orderly fashion to finally become
finished goods at the final stage
• Production process is sequential and the required resources are
organized in stages

• Examples:
• several chemical processing industries such as manufacture of
petrochemicals, steel, pharmaceutical, cement and glass
• In a discrete manufacturing industry high volume production of
very few varieties (such as electrical bulbs or spark plugs)
 Production Line
High-volume production of standard products

• Processes arranged by product flow

• Often “paced” (‘takt’ time discussed later)
• Highly efficient, but not too flexible
Automotive manufacturing
 Job Shop
• Low volume, one-of-a-kind products
• Job shops sell their capability

• Highly flexible equipment, skilled workers

• Equipment arranged by function

Electrical panels, marriage suite, Modular kitchen

 Batch I

• Somewhere in-between Job-shop and Product line processes

• Moderate volumes, multiple products
• Production occurs in “batches”

Can manufacturing, carton makers, advertising mailers, etc.

 Batch II (cellular)
Layout is a cross between that found in a line and that
found in a job shop:

Group Technology

Cable industry, hosiery industry

Cellular manufacturing system
 Project
• Used when a product is:
• one-of-a-kind / unique
• too large to be moved
• Resources moved to where needed
• Equipment, people, etc. are highly flexible
• Finite duration, often with deadline
Construction projects, ship / airplane production, equipment
installation
 Comparing Process Types...

Job Shop Batch Line

Volume Very Low High

Variety Very High Low

Skills Broad Limited

Advantage Flexibility Price and

Delivery
 Facilities Layout
Layout

• the configuration of departments, work centers, and equipment, with

particular emphasis on movement of work (operator or materials)
through the system

• Facilities layout decisions arise when:

• Designing new facilities
• Re-designing existing facilities

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 Need for Layout Planning
1. Inefficient operations 5. Changes in output volume or
•High cost product mix
•Bottlenecks 6. Changes in methods or
2. Accidents or safety hazards equipment
3. Changes in product /service design 7. Changes in environmental or
other legal requirements
4. Introduction of new products or
services 8. Morale problems
 Layout Objectives
• Basic Objective
• Facilitate a smooth flow of work, material, and information
through the system

• Supporting objectives
1. Facilitate product or service quality (Quality)
2. Use workers and space efficiently (Utilization)
3. Avoid bottlenecks (Value flow)
4. Minimize material handling costs (Cost)
5. Eliminate unnecessary movement of workers or material (NVA )
6. Minimize production time or customer service time (Lead time )
7. Design for safety (Safety)
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
Station Station Station Station Finished
or customer item
1 2 3 4

Material Material Material Material

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

labor labor labor labor
Used for Repetitive Processing
Repetitive or Continuous
Product Layouts: Advantages & Disadvantages
Advantages Disadvantages
• High rate of output • Creates dull, repetitive jobs
• Low unit cost • Poorly skilled workers may not maintain
• Labor specialization equipment or quality of output
• Low material handling cost per unit • Fairly inflexible to changes in volume or
• High utilization of labor and product or process design
equipment • Highly susceptible to shutdowns
• Established routing and scheduling • Individual incentive plans are impractical
• Routine accounting, purchasing, • Preventive maintenance, capacity for
and inventory control quick repair and spare-parts inventories
are necessary expenses
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
 Process Layouts: Advantages & Disadvantages
Advantages Disadvantages
• Can handle a variety of processing • In-process inventories can be high
requirements • Routing and scheduling pose
• Not particularly vulnerable to continual challenges
equipment failures • Equipment utilization rates are low
• General-purpose equipment is often • Material handling is slow and
less costly and easier and less costly inefficient
to maintain
• Reduced spans of supervision
• It is possible to use individual
incentive systems • Special attention necessary for each
product or customer
• Accounting, inventory control, and
purchasing are more involved
 Fixed Position Layouts
• Fixed Position layout
• Layout in which the product or project remains stationary, and
workers, materials, and equipment are moved as needed. Examples;
Ship/ Airplane/ Refinery / Highway construction
 Line Balancing in Product Layout
Line balancing
• The process of assigning tasks to workstations in such a way that the
workstations have approximately equal time requirements

Goal:
• Obtain task grouping that represent approximately equal time
requirements since this minimizes idle time along the line and results in
a high utilization of equipment and labor

Why is line balancing important?

• It allows us to use labor and equipment more efficiently.
• To avoid unfairness issues that arise when one workstation must work
harder than another.
 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

Operating time per day Operating time per day

Cycle time  Output rate 
Desired output rate Cycle time

Finished item
Raw materials Station Station Station Station
1 2 3 4

3 mins 2 mins 4 mins 1 min.

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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 min 
t
Cycle time
where
N min  theoretica l minimum number of stations
 t  Sum of task time s
 Measuring Effectiveness
• Balance delay (percentage of idle time)
• Percentage of idle time of a line

Idle time per cycle

Balance Delay   100
N actual  Cycle time
where
N actual  Actual number of stations

• Efficiency
• Percentage of busy time of a line Line efficiency = (total time used by all stations) /
Efficiency  100% - Balance Delay (no of stations x Cycle time of the line )
 Precedence Diagram

• Precedence diagram
• A diagram that shows elemental tasks and their precedence
requirements

start

Finish

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 Example
A computer manufacturer needs to design the assembly stations in the factory where the cabinet
housing the hard disk, motherboard and other accessories are to be done. The factory currently
works for one shift of 8 hours. The tasks, their duration and their precedence relationships are
given below:
Precedence relationship among the tasks
Task Description Duration
B
(seconds)
A Assemble and position the base unit 70 F
B Install Hard disk 80
C Install Mother Board 40 A C
G H
D Insert Ports 20
E Install speaker 40
F Connect relevant modules to mother board & Disk 30 D
G Install controller 50
H Visually inspect & close with a cover plate 50
E

• If the cycle time is 80 seconds, what will be the daily production of cabinets?
• If the desired production rate is 320 cabinets per day, what is the maximum permissible cycle time?
• What is the maximum and minimum number of workstations required to maintain this daily production rate?
• Design an assembly setup with 5 workstations and 6 workstations.
 Solution to the example
• Total available time per day = 8*60*60 = 28,800 seconds
• If the cycle time is 80 seconds, then
Total Available Time 28,800
• Daily production rate =   360
Cycle Time 80

• Since the desired production rate is only 320 cabinets, one can obtain the
maximum permissible cycle time for the assembly stations
Total Available Time 28,800
• Maximum Cycle Time =   90 Seconds
Desired Pr oduction Rate 320

• Minimum number of workstations is dictated by the maximum cycle time

permissible
• Sum of all task times = 380 seconds
380
• Minimum number of workstations =  4.22  5
90
 Solution to the example
Design with 5 work stations

• We assign tasks to the five workstations on the basis of the following two criteria:
• Workstation times should not exceed maximum permissible cycle time of 90 seconds
• The precedence relationships need to be honoured

Workstation Workstation Workstation Workstation Workstation

1 2 3 4 5
Tasks A,D B C,G E,F H
Assigned
Workstation 90 80 90 70 50
Times
Cycle time 90 90 90 90 90
Workstation 0 10 0 20 40
idle time
Workstation 100% 89% 100% 78% 56%
utilization

Sum of all task times 380

  84.4%
Average Utilisation = No. of work stations*Cycle time 5 * 90
 Solution to the example
Design with 6 work stations

Work Work Work Work Work Work

station station station 3 station 4 station 5 station 6
1 2
Tasks A B C,D E,F G H
Assigned
Workstation 70 80 60 70 50 50
Times
Cycle time 80 80 80 80 80 80
Workstation 10 0 20 10 30 30
idle time

Workstation 87.5% 100% 75% 87.5% 62.5% 62.5%

utilisation

Sum of all task times 380

Average Utilisation =   79.2%
No. of work stations* Cycle time 6 * 80
 Caselet – Layout change in a running
1.
plant
The plant is running in all 3 shifts / day.
2. Three components Tripod, Tulip & IC shaft
being made in-house and rest are coming
from vendors.
3. Bought-out items like grease, circlips, steel
balls, boots etc are procured and stored in
the stores area.
4. Items of sl no 2 and 3 go to assembly room
for assembly of the aggregate- end product
5. Assembly of the aggregate being done,
followed by inspecting & packing and then
dispatched to customers.
6. The capacity needs to be doubled with
additional machines and better systems in
the same floor area.
• What 5 issues do you observe in the layout? layout
• What 5 improvements you suggest in layout?
 Combination Layouts

• Some operational environments use a combination of the three basic layout

types:
• Hospitals
HOW?
• Supermarket

• Some organizations are moving away from process layouts in an effort to

capture the benefits of product layouts
• Cellular manufacturing Benefits & limitations of Cellular mfg.?
• Flexible manufacturing systems

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 Types of Service Processes
Process Service Characteristics Management
types examples challenges
Project Consulting One-of-a-kind engagement Staffing and scheduling
Job Shop Hospital Many specialized departments Balancing utilization and
scheduling patients
Batch Airline Group of customers treated Pricing of perishable asset
simultaneously (seat inventory)
Flow/Mass Cafeteria Fixed sequence of operations Adjust staffing to demand
fluctuations
Continuous Electric Utility Uninterrupted delivery Maintenance and capacity
planning
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Product Layout: Work Allocation Problem

Automobile Driver’s License Office

1 2 3 4 5 6
240 120 60 90 180 120
In 15 30 60 40 20 30
Review Payment Violations Eye Test Photograph Issue Out

Activity
Number(s)
Capacity
per hour
Cycle Time
in seconds

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Automobile Driver’s License Office
(Improved Layout)

1,4 3
In 65 60
55 60
2 5 6 Out
120 180 120
30 20 30

1,4 3
In 65 60
55 60

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Process Layout: Ocean World Theme Park

How are you going to define

the layout of this theme park?

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 Process Layout:
Relative Location Problem
Ocean World Theme Park Daily Flows

A B C D E F A B C D E F
A 7 20 0 5 6 15 30 0 15 6
B 8 6 10 0 2 12 40 10 8
Net
C 10 6 15 7 8 flow 20 8 8
D 0 30 5 10 3 30 6
E 10 10 1 20 6 10
F 0 6 0 3 4

Flow matrix Triangularized matrix

Description of attractions: A=killer whale, B=sea lions, C=dolphins, D=water skiing,

E=aquarium, F=water rides.

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 Ocean World Theme Park
(Proposed Layout)
(a) Initial layout (b) Move C close to A

Pair Flow distances Pair Flow distances

C
A B C AC 30 * 2 = 60 CD 20 * 2 =40
AF 6 * 2 = 12 A B CF 8 * 2 =16
DC 20 * 2 = 40 DF 6 * 2 = 12
D E F DF 6 * 2 = 12 D E F
AF 6 * 2 = 12
Total 124 CE 8 * 2 = 16
Total 96

(c ) Exchange A and C (d) Exchange B and E and move F

Pair Flow distances Pair Flow distances

AE 15 * 2 = 30 AB 15 * 2 =30
A CF 8 * 2 = 16 A F AD 0*2=0
AF 6 * 2 = 12 FB 8 * 2 = 16
C B AD 0*2= 0 C E FD 6 * 2 = 12
DF 6 * 2 = 12 Total 58
D E F
Total 70 D B

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Health Maintenance Organization (A)
A B C D E F
Reception A - 30 0 5 0 0
Waiting room B 10 - 40 10 0 0
Examination C 15 20 1 15 5 5
Laboratory D 5 18 8 - 6 3
X-ray E 0 4 1 2 - 4
Minor surgery F 2 0 0 0 1 -

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 HMO (A) Questions

1. Beginning with a good initial layout, use operations sequence

analysis to determine a better layout that would minimize the
walking distance between different areas of the clinic.
2. Defend your final layout based on features other than minimizing
walking distance.

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Health Maintenance Organization (B)

Activity Time (sec.)

Receive prescriptions 24
Type labels 120
Fill prescriptions 60
Check prescriptions 40
Dispense prescriptions 30

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Normal Grocery Store
Dairy Meat

Produce
Frozen

Grocery & Staples

Deli
Cashiers
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 Summary
• In manufacturing the product type/quantity/ variety, manufacturing process,
flow of material, equipment and operator would define the layout.

• Cellular layouts are common in product floors operating in multi product but
with similar processes.

• Process layout play a critical role in inventory control, maintenance of machines

and labour productivity.

• Layouts in service operations is fundamentally governed by Customer

experience.

• Line balancing facilitates operations.