Process Selection and Facility

Layout
Chapter 6
 Learning Objective
• Compare the four basic processing types
• Describe product layouts and their main
advantages and disadvantages
• Describe process layouts and their main
advantages and disadvantages
• Develop simple product layouts
• Develop simple process layouts
 Process Selection
• Process selection
– Deciding on the way production of goods or
services will be organized

– Occurs when:
• Planning of new products or services
• Technological changes in product or equipment
• Competitive pressure
Process Selection and System Design

Facilities and
Forecasting Capacity Equipment
(demand)
Planning

Product and Layout

Service Design

Process
Technological Selection Work
Change Design
 Process Selection
Process choice is demand driven:
1. Variety
– How much?
2. Volume
– Expected output?
3. Standardization
4. Equipment flexibility
– To what degree?
Process Types
• Job shop
– Small scale/high variety
– e.g., doctor, tailor
• Batch
– Moderate volume/moderate variety
– e.g., bakery
• Repetitive/assembly line
– High volumes of standardized goods
or services
– e.g., automobiles
• Continuous
– Very high volumes of non-discrete
goods
– e.g., petroleum products
 Types of Processing
Repetitive/
Job Shop Batch Assembly Continuous
Description Customized Semi- Standardized Highly
goods or standardized goods or standardized
services goods or services goods or
services services
Advantages Able to handle a Flexibility; easy Low unit cost, Very efficient,
wide variety to add or high volume, very high
of work change efficient volume
products or
services
Disadvantages Slow, high cost Moderate cost Low flexibility, Very rigid, lack of
per unit, per unit, high cost of variety, costly
complex moderate downtime to change,
planning and scheduling very high cost
scheduling complexity of downtime
 Product-Process Matrix
Flexibility/Variety

Volume

• The diagonal represents the “ideal” match

• Hybrid process are possible (e.g., job-shop & batch)
• Process choice may change as products goes through its life-cycles
6-7
 Process Choice Effects
Activity/
Function Projects Job Shop Batch Repetitive Continuous
Cost estimation Simple to Difficult Somewhat routine Routine Routine
complex
Cost per unit Very high High Moderate Low Low

Equipment used Varied General purpose General purpose Special purpose Special purpose

Fixed costs Varied Low Moderate High Very high

Variable costs High High Moderate Low Very low

Labor skills Low to high High Moderate Low Low to high

Marketing Promote Promote Promote Promote Promote

capabilities capabilities capabilities; standardized standardized
semi- goods/servic goods/servic
standardized es es
goods and
services
Scheduling Complex, subject Complex Moderately Routine Routine
to change complex

• Project
– used for work that is nonroutine with a unique set of objective to be accomplished in a
limited time frame.
– E.g., plays, movies, launching a new products, publishing a book, building a dam, building a bridge 6-8
 Product and Service Profiling

• Product or service profiling

– Linking key product or service requirements to
process capabilities

– Key dimensions relate to

• Range of products or services that can be processed
• Expected order sizes
• Expected frequency of schedule changes
 Technology
• Automation
– Fixed automation
– Programmable automation
• Computer-aided manufacturing
• Numerically Controlled machines
– Flexible automation
• Flexible manufacturing systems (FMS): A group of machines
designed to handle intermittent processing requirements and
produce a variety of similar products

• Computer-integrated manufacturing (CIM)

– A system for linking a broad range of manufacturing
activities through an integrating computer system
 New Process Trend
 HBR 12/6/12 Three Examples of New Process Strategy
 There are three fundamental ways that companies can
improve their processes in the coming decade:
1. expand the scope of work managed by a company to include
customers, suppliers, and partners;
– Shift to global, virtual, cross-organizational teams of specialized entities
that are knitted together to serve customers
– To keep such a multiparty system from degenerating into chaos, virtual
process teams must have aligned goals and support systems.
2. target the increasing amount of knowledge work; and
– Big data analytics
– Crowdsourcing, e.g., mechanical turk, innocentive.com, TopCoder.com &
Heritage Health Prize
» HBR : Using the Crowd as an Innovation Partner
3. reduce cycle times to durations previously considered impossible
– Agile processes
– Managers must speed the flow of information so that decisions can be
made faster at all levels, from top to bottom.
 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

– The basic objective of layout design is to facilitate a

smooth flow of work, material, and information
through the system.
 Basic Layout Types
• Product layout
– Layout that uses standardized processing operations to achieve
smooth, rapid, high-volume flow.
– The work is divided into a series of standardized tasks, permitting
specialization of equipment and division of labor.

• Process layout
– Layout that can handle varied processing requirements
– The variety of jobs that are processed requires frequent adjustments
to equipment

• Fixed position layout

– Layout in which the product or project remains stationary, and
workers, materials, and equipment are moved as needed

• Combination layouts
 Product Layouts
• Product layout
– Layout that uses standardized processing operations to
achieve smooth, rapid, high-volume flow
– E.g., production line or assembly line
– How?
Raw materials Station Station Station Station Finished
or customer 1 2 3 4 item

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
• Although product layouts often follow a straight line, a
straight line is not always the best, and layouts may take
an L, O, S, or U shape. Why?

– L:
– O: Image source: mdcegypt.com
– S:
– U: more compact, increased communication facilitating team
work, minimize the material handling
 Product Layouts
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
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
 Non-repetitive Processing:
Process Layouts
• Process layouts
– Layouts that can handle varied processing requirements
– E.g., machine shop: milling, grinding, drilling, etc.

Dept. A Dept. C Dept. E

Dept. B Dept. D Dept. F

Used for Intermittent processing

Job Shop or Batch
 Process Layouts
Advantages
• Can handle a variety of
processing requirements
• Not particularly vulnerable to
equipment failures
• General-purpose equipment
is often less costly and easier
and less costly to maintain
• It is possible to use individual
incentive systems
Disadvantages
• In-process inventories can be high
• Routing and scheduling pose
continual challenges
• Equipment utilization rates are
low
• Material handling is slow and less
efficient
• Complicates supervision
• Special attention necessary for
each product or customer
• Accounting, inventory control,
and purchasing are more complex
 Fixed Position Layouts
• Fixed Position Layout
– Layout in which the product or project remains
stationary, and workers, materials, and equipment
are moved as needed
– E.g., farming, firefighting, road building, home
building, remodeling and repair, and drilling for oil
 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
 Line Balancing
 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?
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.
– Input
• Tasks sequencing (precedence diagram)
• Tasks time
• Operating time
 Precedence Diagram
• Precedence diagram
– A diagram that shows elemental tasks and their precedence
requirements
Task Duration Immediate
(min) predecessor
a Select material 0.1 -
b Make petals 1.0 a
c Select 0.7 -
rhinestones
d Glue 0.5 b, c
rhinestones
e Package 0.2 d
 Cycle Time
• Cycle time
– The maximum time allowed at each workstation to
complete its set of tasks on a unit (depending on the
number of workstations)
• Minimum Cycle Time = longest task time = 1.0 min
• Maximum Cycle time = Σt = sum of task time = 2.5 min
 Output rate of a line
• Cycle time also establishes the output rate of
a line
Operating time per day
Output rate =
Cycle time

• The cycle time is generally determined by the

desired output.
Operating time per day
Cycle time =
Desired output rate
How Many Workstations are Needed?
• The required number of workstations is a function of:
– Desired output rate
– The ability to combine tasks into a workstation

• (theoretical) Minimum number of stations

∑t
Nmin=
Cycle time
where
Nmin = theoretical minimum number of stations
∑ t = sum of task times
How Many Workstations are Needed?
• The required number of workstations is a function of:
– Desired output rate
– The ability to combine tasks into a workstation
Q: Why this is a theoretical value?
A: There are often scraps or idle times.
• (theoretical) Minimum number of stations
Example:
4 tasks, each require 6 hours ∑ tto finish
Nmin=
A station can handle 8 hours
Cycle amount
time of tasks a day.
You will need 4 stations to complete all tasks, instead of 3.
where
Nmin = (6+6+6+6) / 8 = 3
Nmin = theoretical minimum number of stations
∑ t = sum of task times
 Designing Product Layouts
 Some Heuristic (Intuitive, may not result in
optimal solution) 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.
 Example:
Assembly Line Balancing
• Arrange tasks (shown in the figure) into three
workstations
– Assume the cycle time of each workstation is 1.2 min.
– Assign tasks in order of the most number of followers
– Break tie using greatest positional weight
• Assign tasks in order of the most number of followers
Revised
Time Assign Time Station
Workstation Remaining Eligible Task Remaining Idle Time
1 1.2 a, c

2
3

Start with CT
(1.2 min. in this
example)
• Assign tasks in order of the most number of followers
Revised
Time Assign Time Station
Workstation Remaining Eligible Task Remaining Idle Time
1 1.2 a, c a 1.1

2
3
 Revised
Time Assign Time Station
Workstation Remaining Eligible Task Remaining Idle Time
1 1.2 a, c a 1.1
1.1 c, b

2
3
 Revised
Time Assign Time Station
Workstation Remaining Eligible Task Remaining Idle Time
1 1.2 a, c a 1.1
1.1 c, b b 0.1

2
3

Break tie using

greatest
positional weight
 Revised
Time Assign Time Station
Workstation Remaining Eligible Task Remaining Idle Time
1 1.2 a, c a 1.1
1.1 c, b b 0.1
0.1 c
2
3
 Revised
Time Assign Time Station
Workstation Remaining Eligible Task Remaining Idle Time
1 1.2 a, c a 1.1
1.1 c, b b 0.1
0.1 c - 0.1
2
3

Can’t assign c to this

workstation because the
workstation doesn’t have
enough time (0.1) to
complete c (0.7).
 Revised
Time Assign Time Station
Workstation Remaining Eligible Task Remaining Idle Time
1 1.2 a, c a 1.1
1.1 c, b b 0.1
0.1 c - 0.1
2 1.2 c c 0.5

Start with CT
(1.2 min. in this
example)
 Revised
Time Assign Time Station
Workstation Remaining Eligible Task Remaining Idle Time
1 1.2 a, c a 1.1
1.1 c, b b 0.1
0.1 c - 0.1
2 1.2 c c 0.5
0.5 d d 0 0
3
 Revised
Time Assign Time Station
Workstation Remaining Eligible Task Remaining Idle Time
1 1.2 a, c a 1.1
1.1 c, b b 0.1
0.1 c - 0.1
2 1.2 c c 0.5
0.5 d d 0 0.0
3 1.2 e e 1
1.0

Start with CT
(1.2 min. in this
example)
 Revised
Time Assign Time Station
Workstation Remaining Eligible Task Remaining Idle Time
1 1.2 a, c a 1.1
1.1 c, b b 0.1
0.1 c - 0.1
2 1.2 c c 0.5
0.5 d d 0 0.0
3 1.2 e e 1
1.0

Idle time per cycle

=0.1+0.0+1.0=1.1
 Layout

a&b c&d e
(0.1+1.0) (0.7+0.5) (0.2)

Task Duration Immediate

(min) predecessor
a Select material 0.1 -
b Make petals 1.0 a
c Select 0.7 -
rhinestones
d Glue 0.5 b, c
rhinestones
e Package 0.2 d
 Measuring Effectiveness
• Balance delay (percentage of idle time)
– Percentage of idle time of a line
Idle time per cycle
Balance Delay = × 100%
Nactual × Cycle time
where
Nactual = actual number of stations

• Efficiency
– Percentage of busy time of a line
Efficiency = 100% − Balance Delay
 Example:
Measuring Effectiveness
Revised
Time Assign Time Station
Workstation Remaining Eligible Task Remaining Idle Time
1 1.2 a, c a 1.1
1.1 c, b b 0.1
0.1 c - 0.1
2 1.2 c c 0.5
0.5 d d 0 0.0
3 1.2 e e 1.0
1.0

Percentage of idle time = [(0.1 + 0 + 1.0) ÷ (3 × 1.2)] × 100% = 30.55%

Efficiency = 100% – 30.55% = 69.45%

 Exercise
 (Textbook page 267) Using the information contained in the
table shown, do each of the following:
1. Draw a precedence diagram.
2. Assuming an eight-hour workday,
compute the cycle time needed to
obtain an output of 400 units per day.
3. Determine the minimum number of
workstations required.
4. Assign tasks to workstations using
this rule: Assign tasks according to
greatest number of following tasks.
In case of a tie, use the tiebreaker of
assigning the task with the longest
processing time first.
5. Compute the resulting percent idle
time and efficiency of the system
 Solution
1. Draw a precedence diagram
 Example:
Measuring Effectiveness
2. Assuming an eight-hour
workday, compute the cycle time
needed to obtain an output of 400
units per day

Operating time 480 minutes

per day per day
Cycle time = = = 1.2 minutes per cycle
Desired output 400 units per
rate day
 Example:
Measuring Effectiveness
3. Determine the minimum number
of workstations required

∑t 3.8 minutes per unit

Nmin= = = 3.17 stations
Cycle time 1.2 minutes per cycle ( round to 4)
where time per station
Nmin = theoretical minimum number of stations
∑ t = sum of task times
 Example:
Measuring Effectiveness
4. Assign tasks to workstations using this rule: Assign tasks
according to greatest number of following tasks. In case of a
tie, use the tiebreaker of assigning the task with the longest
processing time first.
 Example:
Measuring Effectiveness
5. Compute the resulting percent idle time and efficiency of the
system

Idle time per cycle 1.0 min.

Percent idle time = = × 100%
Nactual × Cycle time 4 × 1.2 min.

= 20.83%
 Designing Process Layouts
• The main issue in designing process layouts
concerns the relative placement of the
departments

• Measuring effectiveness
– key objectives in designing process layouts are to
minimize:
• transportation cost
• distance
• time
 Information Requirements
• In designing process layouts, the following
information is required:
1. A list of work stations (departments) to be arranged and
their dimensions
2. A projection of future work flows between the pairs of
work centers
3. The distance between locations - and the cost per unit of
distance to move loads between them
4. The amount of money to be invested in the layout
5. A list of any special considerations
6. The location of key utilities, access and exit points, etc.
 Designing Process Layouts
• Goal:
Minimize Transportation Costs
– Assign departments 1, 2, 3 to locations A, B, C in a way that
minimizes transportation costs.

A B C
• Heuristic:
– Assign departments with the greatest interdepartmental
work flow first to locations that are closet to each other.
 Example: Minimize Transportation
Costs
Distance
40
Location Trip
From\To A B C A-B 20 Closest
A - 20 40
C
B-C 30 A B 30
20
B - 30 A-C 40
C -
Place dept. 1&3
Work flow in A&B
Department Pair Work flow
From\To 1 2 3 1-3 170 Highest work flow
1 - 30 170 2-3 100
2 - 100 1-2 30
3 -
 Example: Minimize Transportation
Costs
• Place departments 1&3 in A&B (2 options) 40

1 3 3 1
A B C A B C C
A B 30
20
• 2&3 have higher work flow than 1&2
(100>30) Trip Pair Work flow
• 2&3 should be located closer than 1&2
A-B 20 1-3 170
• C closer to B than to A (30<40)
B-C 30 2-3 100
• Solution:
A-C 40 1-2 30
30

170 100
1 3 2

A B C
 Closeness Ratings
(Relationship Diagramming)
• Allows the considerations of
multiple qualitative criteria.

• Input from management or

subjective analysis.

• Indicates the relative

importance of each
combination of department
pairs.

Muther’s grid
 Closeness Ratings
A Absolutely necessary
E Very important
I Important
Production O Ordinary importance
O U Unimportant
Offices A X Undesirable
U I
Stockroom O E
A X A
Shipping and
receiving U U
U O
Locker room O
O
Toolroom
 Closeness Ratings : Example

Dept. 1
A
Dept 2. A
E X
Dept 3. U U
X I O
Dept 4. A A
O X
Dept. 5 A
A
Dept 6.

Assign department using the heuristic:

Assign critical departments first (they are most important)
 Closeness Ratings : Example
1. List critical departments (either A or X):
Dept. 1
A X A
1-2 1-4 Dept 2. A
E X
1-3 3-6 Dept 3. U U
2-6 3-4 X I O
Dept 4. A A
3-5 O X
Dept. 5 A
4-6 A
5-6 Dept 6.
 Closeness Ratings : Example
2. Form a cluster of A links A
(beginning with the 1-2 Dept. 1
department that appears 1-3
A
most frequently)
Dept 2. A
2-6 E X
Dept 3. U U
3-5 X I O
4 Dept 4. A A
4-6
O X
2 6 5-6 Dept. 5 A
A
5 Dept 6.

3. Take the remaining A links in

order and add them to this cluster 4
where possible (rearranging as
necessary) 2 6
Form separate clusters for 1 5
departments that do not link with
the main cluster. 3
 Closeness Ratings : Example
4. Graphically portray the X
X links 1-4 Dept. 1
3-6
A
Dept 2. A
1 3-4 E X
4 Dept 3. U U
3 X I O
Dept 4. A A
6 O X
Dept. 5 A
A
Dept 6.
5. Adjust A cluster as
necessary.
4

2 6
(in this case, the A cluster
1 5
also satisfies the X cluster).
3
 Closeness Ratings : Example
4

2 6 Dept. 1
1 5
A
Dept 2. A
3 1 E X
4 Dept 3. U U
3 X I O
Dept 4. A A
6 O X
Dept. 5 A
6. Fit cluster into arrangement A
(e.g., 2x3) Dept 6.
may require some trial and error.
Departments are considered close not only when they touch
side to side but also when they touch corner to corner.

1 2 6
3 5 4

7. Check for possible

improvements