OPM 2103

Operations Management

Class 12 – Facility Layout

Copyright ©2018 McGraw-Hill Higher Education. 1

Class 12 Course Learning Outcomes

3. Apply appropriate qualitative and quantitative methods in various areas of

operations management that will facilitate managerial decisions aligned to the
strategic priorities of an organization.

Session Learning Outcomes

12.1 List some reasons for redesign of layouts.

12.2 Describe product layouts and their main advantages and disadvantages.

Copyright ©2018 McGraw-Hill Higher Education. 2

Introduction to Facility Layout

Layout refers to the configuration of departments, work centers, and equipment, with
particular emphasis on movement of work (customers or materials) through the system.

As in other areas of system design, layout decisions are important for three basic
reasons:

(1) they require substantial investments of money and effort;

(2) they involve long-term commitments, which makes mistakes difficult to overcome;
and
(3) they have a significant impact on the cost and efficiency of operations.

The need for layout planning

The need for layout planning arises both in the process of designing new facilities and in
redesigning existing facilities.

The most common reasons for redesign of layouts include

1. inefficient operations (e.g., high cost, bottlenecks), accidents or safety hazards,

2. changes in the design of products or services, introduction of new products or
services,
3. changes in the volume of output or mix of outputs, changes in methods or
equipment,
4. changes in environmental or other legal requirements, and morale problems (e.g.,
lack of face-to-face contact).

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Objective of layout design

The basic objective of layout design is to facilitate a smooth flow of work, material, and
information through the system.

Supporting objectives generally involve the following:

1. To facilitate attainment of product or service quality.

2. To use workers and space efficiently.
3. To avoid bottlenecks.
4. To minimize material handling costs.
5. To eliminate unnecessary movements of workers or materials.
6. To minimize production time or customer service time.
7. To design for safety.

Layout types

The three basic types of layout are product, process, and fixed-position.

1. Product layouts are most conducive to repetitive processing,

2. Process layouts are used for intermittent processing, and

3. Fixed-position layouts are used when projects require layouts.

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Repetitive Processing: Product Layouts

Product layouts are used to achieve a smooth and rapid flow of large volumes of goods
or customers through a system.

This is made possible by highly standardized goods or services that allow highly
standardized, repetitive processing.

The work is divided into a series of standardized tasks, permitting specialization of

equipment and division of labor.

The large volumes handled by these systems usually make it economical to invest
substantial sums of money in equipment and job design.

Example: Product Layouts

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Repetitive Processing: Product Layouts

Product layouts achieve a high degree of labor and equipment utilization, which tends to
offset their high equipment costs. Because items move quickly from operation to
operation, the amount of work-in-process is often minimal.

Repetitive processing can be machine paced (e.g., automatic car wash, automobile
assembly), worker paced (e.g., fast-food restaurants such as McDonald’s, Burger King), or
even customer paced (e.g., cafeteria line).

Advantages: Product Layouts

The main advantages of product layouts are:

1. A high rate of output.

2. Low unit cost due to high volume. The high cost of specialized equipment is spread
over many units.
3. Labor specialization, which reduces training costs and time, and results in a wide
span of supervision.
4. Low material-handling cost per unit. Material handling is simplified because units
follow the same sequence of operations. Material handling is often automated.
5. A high utilization of labor and equipment.

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Disadvantages: Product Layouts

1. The intensive division of labor usually creates dull, repetitive jobs that provide little
opportunity for advancement and may lead to morale problems and to repetitive
stress injuries.
2. Poorly skilled workers may exhibit little interest in maintaining equipment or in the
quality of output.
3. The system is fairly inflexible in response to changes in the volume of output or
changes in product or process design.
4. The system is highly susceptible to shutdowns caused by equipment breakdowns or
excessive absenteeism because workstations are highly interdependent.
5. Preventive maintenance, the capacity for quick repairs, and spare-parts inventories
are necessary expenses.

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Nonrepetitive Processing: Process Layouts

Process layouts (functional layouts) are designed to process items or provide services
that involve a variety of processing requirements.

The variety of jobs that are processed requires frequent adjustments to equipment. This
causes a discontinuous work flow, which is referred to as intermittent processing.

A manufacturing example of a process layout is the machine shop, which has separate
departments for milling, grinding, drilling, and so on.

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Example: Comparison of process and product layouts

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Nonrepetitive Processing: Process Layouts

Process layouts are quite common in service environments.

Examples include colleges and universities, airlines, and public libraries.

Universities have separate schools or departments that concentrate on one area of study
such as business, engineering, science, or math.

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Advantages: Process Layouts

The main advantages of process layouts are:

1. The systems can handle a variety of processing requirements.

2. The systems are not particularly vulnerable to equipment failures.
3. General-purpose equipment is often less costly than the specialized equipment used
in product layouts and is easier and less costly to maintain.
4. It is possible to use individual incentive systems.

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Disadvantages: Process Layouts

The main disadvantages of process layouts are:

1. Routing and scheduling pose continual challenges.

2. Equipment utilization rates are low.
3. Material handling is slow and inefficient, and more costly per unit than in product
layouts.
4. Job complexities often reduce the span of supervision and result in higher
supervisory costs than with product layouts.
5. Special attention necessary for each product or customer (e.g., routing, scheduling,
machine setups) and low volumes result in higher unit costs than with product
layouts.

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Fixed-Position Layouts

In fixed-position layouts, the item being worked on remains stationary, and workers,
materials, and equipment are moved about as needed.

This is in marked contrast to product and process layouts.

Fixed-position layouts are used in large construction projects (buildings, power plants,
dams), and production of large aircraft and space mission rockets.

In those instances, attention is focused on timing of material and equipment deliveries so

as not to clog up the work site and to avoid having to relocate materials and equipment
around the work site.

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Activity 12.1 Facility Layout

Instruction Read each item in Activity 11.1 and mark with a tick (✔) by identifying
the facility layout.

SLO 12.2

Format Individual Exercise

Time Limit 5 Minutes

Discussion 5 Minutes

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Questions?

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 Activity 12.1 – Facility Layout

Sl.
Example Product Process Fixed
No

1 Toyota Car Production ⃝ ⃝ ⃝

2 Hospital ⃝ ⃝ ⃝

3 Hardee’s Fast Food ⃝ ⃝ ⃝

4 Auto Repair ⃝ ⃝ ⃝

5 Space Mission Rockets ⃝ ⃝ ⃝

6 Bank ⃝ ⃝ ⃝

7 Garment Manufacturing ⃝ ⃝ ⃝

8 Shipbuilding ⃝ ⃝ ⃝

Number of Right Answers Number of Wrong Answers Percentage

Version 1.0 OPM 2103 – Operations Management