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

Forecasting
(demand)

Capacity
Planning

Layout

Product and
Service Design

Technological
Change

Facilities and
Equipment

Process
Selection

Work
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/
Assembly

Job Shop

Batch

Description

Customized
goods or
services

Semistandardized
goods or
services

Standardized
goods or
services

Highly
standardized
goods or
services

Advantages

Able to handle a
wide variety
of work

Flexibility; easy
to add or
change
products or
services

Low unit cost,

high volume,
efficient

Very efficient,
very high
volume

Moderate cost
per unit,
moderate
scheduling
complexity

Low flexibility,
high cost of
downtime

Very rigid, lack of

variety, costly
to change,
very high cost
of downtime

Disadvantages Slow, high cost

per unit,
complex
planning and
scheduling

Continuous

Product-Process Matrix
Flexibility/Varie
ty

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

Repetiti
ve

Continu
ous

Projects

Cost
estimation

Simple to
complex

Difficult

Somewhat
routine

Routine

Routine

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
capabilities

Promote
capabilitie
s

Promote
capabilities;
semistandardized
goods and
services

Promote
standardiz
ed
goods/serv
ices

Promote
standardiz
ed
goods/serv
ices

Scheduling

Complex,
subject
to change

Complex

Moderately
complex

Routine

Routine

Project

Job
Shop

Batch

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
or customer

Station
1

Station
2

Station
3

Material

Material

Material

Material

and/or
labor

and/or
labor

and/or
labor

and/or
labor

Station
4

Used for Repetitive Processing

Repetitive or Continuous

Finished
item

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:
Image source: mdcegypt.com
O:
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

Select material 0.1

Make petals

1.0

Select
rhinestones

0.7

Glue
rhinestones

0.5

b, c

Package

0.2

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 = t = sum of task time = 2.5 min

Output rate of a line

Cycle time also establishes the
output rate of a line
Output rate =

Operating time per

day
Cycle time

The cycle time is generally

determined by the desired output.
Cycle time =

Operating time per

day
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

Nmin=

t
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:
tto finish
4 tasks, each require 6 hours
Nmin=
A station can handle 8 hours
of tasks a day.
Cycle amount
time
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 tasks 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

Time
Workstation Remaining
1

2
3

Start with CT
(1.2 min. in this
example)

1.2

Eligible
a, c

Revised
Assign Time
Task
Remaining

Station
Idle Time

 Assign tasks in order of the most number of followers

Time
Workstation Remaining
1

2
3

1.2

Eligible

Revised
Assign Time
Task
Remaining

a, c

1.1

Station
Idle Time

Time
Workstation Remaining
1

2
3

1.2
1.1

Eligible
a, c
c, b

Revised
Assign Time
Task
Remaining
a

1.1

Station
Idle Time

Time
Workstation Remaining
1

2
3

Break tie using

greatest
positional weight

1.2
1.1

Eligible

Revised
Assign Time
Task
Remaining

a, c
c, b

a
b

1.1
0.1

Station
Idle Time

Time
Workstation Remaining
1

2
3

1.2
1.1
0.1

Eligible
a, c
c, b
c

Revised
Assign Time
Task
Remaining
a
b

1.1
0.1

Station
Idle Time

Time
Workstation Remaining
1

1.2
1.1
0.1

2
3

Cant assign c to this

workstation because the
workstation doesnt have
enough time (0.1) to
complete c (0.7).

Eligible

Revised
Assign Time
Task
Remaining

a, c
c, b
c

a
b
-

Station
Idle Time

1.1
0.1
0.1

Eligible

Revised
Assign Time
Task
Remaining

1.2
1.1
0.1

a, c
c, b
c

a
b
-

1.1
0.1

1.2

0.5

Time
Workstation Remaining
1

2
3

Start with CT
(1.2 min. in this
example)

Station
Idle Time

0.1

Eligible

Revised
Assign Time
Task
Remaining

1.2
1.1
0.1

a, c
c, b
c

a
b
-

1.1
0.1

1.2
0.5

c
d

c
d

0.5
0

Time
Workstation Remaining
1

2
3

Station
Idle Time

0.1
0

Eligible

Revised
Assign Time
Task
Remaining

1.2
1.1
0.1

a, c
c, b
c

a
b
-

1.1
0.1

1.2
0.5

c
d

c
d

0.5
0

1.2

Time
Workstation Remaining
1

2
3

Station
Idle Time

0.1
0.0
1.0

Start with CT
(1.2 min. in this
example)

Eligible

Revised
Assign Time
Task
Remaining

1.2
1.1
0.1

a, c
c, b
c

a
b
-

1.1
0.1

1.2
0.5

c
d

c
d

0.5
0

1.2

Time
Workstation Remaining
1

2
3

Station
Idle Time

0.1
0.0
1.0

Idle time per cycle

=0.1+0.0+1.0=1.1

Layout
a&b

c&d

(0.1+1.0)

(0.7+0.5)

(0.2)

Task

Duration Immediate
(min)
predecessor

Select material 0.1

Make petals

1.0

Select
rhinestones

0.7

Glue
rhinestones

0.5

b, c

Package

0.2

Measuring Effectiveness
Balance delay (percentage of idle time)
Percentage of idle time of a line

Balance Delay =

Idle time per cycle

Nactual Cycle time

where
Nactual = actual number of stations

Efficiency
Percentage
of busy
time ofBalance
a line Delay
Efficiency
= 100%

100%

Example:
Measuring Effectiveness
Eligible

Revised
Assign Time
Task
Remaining

1.2
1.1
0.1

a, c
c, b
c

a
b
-

1.1
0.1

1.2
0.5

c
d

c
d

0.5
0

1.2

1.0

Time
Workstation Remaining
1

2
3

Station
Idle Time

0.1
0.0
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

Cycle time
=

Operating
time per
day
Desired
output rate

480
minutes
per day
400 units
per day

= 1.2 minutes per

cycle

Example:
Measuring Effectiveness
3. Determine the minimum number
of workstations required

3.8 minutes per unit

Nmin=
= 3.17 stations
=
Cycle time
1.2 minutes per cycle
( round to 4)
time per station
where
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

Percent idle time

=

Idle time per

cycle
Nactual Cycle
time

1.0 min.
=

4 1.2
min.
= 20.83%

100%

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.

 Goal:

Designing Process Layouts

Minimize Transportation Costs

Assign departments 1, 2, 3 to locations A, B, C in a way that

minimizes transportation costs.

Heuristic:
Assign departments with the greatest interdepartmental work
flow first to locations that are closet to each other.

Example: Minimize Transportation

Costs
Distance
Location
From\To
A

A
-

40

Trip
C

A-B

20

20

40

B-C

30

30

A-C

40

Closest

From\To

30

170

100

2
3

20

30

Place dept. 1&3

in A&B

Work flow
Department

Pair

Work
flow

1-3

170

2-3

100

1-2

30

Highest work flow

Example: Minimize Transportation

Costs
40

Place departments 1&3 in A&B (2 options)

11

33

33

11

2&3 have higher work flow than 1&2 (100>30)

2&3 should be located closer than 1&2
C closer to B than to A (30<40)
Solution:
30
1

170

100

20

Trip

30

Pair

Work flow

A-B

20

1-3

170

B-C

30

2-3

100

A-C

40

1-2

30

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.

Muthers grid

Closeness Ratings
Production
Offices
Stockroom
Shipping
and
receiving
Locker room
Toolroom

O
U
A
U
O

A
O
U
O

I
X
O

AA
EE
II
OO
UU
XX

E
U

Absolutely
Absolutelynecessary
necessary
Very
Veryimportant
important
Important
Important
Ordinary
Ordinaryimportance
importance
Unimportant
Unimportant
Undesirable
Undesirable

Closeness Ratings : Example

Dept. 1
Dept 2.
Dept 3.
Dept 4.
Dept. 5
Dept 6.

A
E
X
O
A

A
U
A
A

X
I
X

U
A

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

12

1-4

Dept 2.

13

3-6

Dept 3.

3-4

26
35
46
56

Dept 4.
Dept. 5
Dept 6.

E
X
U U
X
O
I
A
A
O X
A
A

Closeness Ratings : Example

2. Form a cluster of A
links (beginning with the
department that appears
most frequently)
4
2

6
5

A
12
13
26
35
46

3. Take the remaining A links in 5order and add them to this cluster
6
where possible (rearranging as
necessary)
Form separate clusters for
departments that do not link with
the main cluster.

Dept. 1

Dept 2.
Dept 3.
Dept 4.
Dept. 5
Dept 6.

E
X
U U
X
O
I
A
A
O X
A
A

4
2
1

6
5

Closeness Ratings : Example

4. Graphically portray
the X links
1
3

X
1-4

Dept. 1

3-6

Dept 2.

3-4

4
6

Dept 3.
Dept 4.
Dept. 5
Dept 6.

E
X
U U
X
O
I
A
A
O X
A
A

5. Adjust A cluster as
necessary.
(in this case, the A
cluster also satisfies
the X cluster).

4
2
1

6
5

Closeness Ratings : Example

4
2

Dept. 1

5
1

3
3

4
6

6. Fit cluster into arrangement

(e.g., 2x3)
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.

7. Check for possible

improvements

Dept 2.
Dept 3.
Dept 4.
Dept. 5
Dept 6.

E
X
U U
X
O
I
A
A
O X
A
A