RBS Chapter 7 – Layout design

Unit 2
Management of Conversion System
Chapter 7: Layout designs
Lesson 21 - Layout concepts

Learning Objectives
After reading this lesson you will be able to understand
Layout planning
Layout as an indicator of competitiveness
Layout types

Today we will learn the meaning of layout planning and the question it addresses. We
will also learn the four basic layout types and their applicability in various areas.

Dear students, all of us have visited a cafeteria or a hospital at some point of time. Have
you ever wondered how such activities are efficiently co-coordinated? Well, layout plays
an important role in this behalf.

To start with, one can state that, Layout planning involves decisions about the physical
arrangement of economic activity centers within a facility. An economic activity center
can be anything that consumes space: a person or group of people, a teller window, a
machine, a workstation, a department, a cafeteria or storage room, and so on. The goal of
layout planning is to allow workers and equipment to operate most effectively. In
general, the inputs to the layout decision are as follows:
1. Specification of the objectives and corresponding criteria to be used to evaluate
the design. The amount of space required, and the distance that must be traveled
between elements in that layout, are common basic criteria
2. Estimates of product or service demand on the system

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3. Processing requirements in terms of number of operations and amount of flow

between the elements in that layout
4. Space requirements for the elements in that layout
5. Space availability within the facility itself, or if this is a new facility, possible
building configurations.
Before making a decision regarding physical arrangement, few questions must be
addressed.
Can you guess some of the pertinent issues? Well, the first and foremost question could
be:

1. What centers the layout should include? Centers should reflect process
decisions and maximize productivity. For example, a central storage area for tools
is most efficient for certain processes, but keeping tools at individual workstations
makes more sense for other processes.
2. How much space and capacity does each center need? Inadequate space can
reduce productivity, deprive employees of privacy, and even create health and
safety hazards. However, excessive space is wasteful, can reduce productivity,
and can isolate employees unnecessarily.
3. How each center’s space should be configured? The amount of space, its shape,
and the elements in a center are interrelated. For example, placement of a desk
and chair relative to the other furniture is determined by the size and shape of the
office, as well as the activities performed there. Providing a pleasing atmosphere
also should be considered as part of the layout configuration decisions, especially
in retail outlets and offices.
4. Where each center should be located? Location can significantly affect
productivity. For example, employees who must frequently interact with one
another face to face should be replaced in a central location rather than in
separate, remote locations to reduce time lost traveling back and forth.

Dear friends, now we are in a position to focus on the main Layout Objectives

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Layout Objectives:

1. Simplify the manufacturing process.

2. Build in flexibility.
3. Hold down equipment investment.
4. Use door area economically.
5. Keep employees safe.
6. Reduce materials handling.
7. Achieve a more productive facility!
8. Organize your layout projects!

Ponder for a moment, dear students.

Are You Involved with:

• process changes?
• updating technology?
• rearrangements?
• expansions?
• consolidations?
• relocations?
• new installations?

Thus, we see that the location of a center has two dimensions, i.e.:
1) Relative location, or the placement of a center relative to other centers,
and
2) Absolute location, or the particular space that the center occupies within
the facility.

Layout reflects competitive priorities

Layout choices can help us immensely in communicating an organization’s product plan
and competitive priorities. Layout has many practical and strategic implications. Altering

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a layout can affect an organization significantly. It would have a direct bearing on the
organisation’s capability to meet its competitive priorities by

Facilitating the flow of materials and information

Increasing the efficient utilization of labour and equipment
Increasing customer convenience and sales at a retail store
Reducing hazards to workers
Improving employee morale, and
Improving communication.

The type of operation determines layout requirements. Let us consider the example of
a warehouse a retail store and a typical office.
In a warehouse, materials flows and stock picking costs are dominant
considerations, while in retail stores, customer convenience and sales may dominate,
whereas communication effectiveness and team building may be crucial in an office.

POM in practice*
Let us consider a couple of cases. We will start with the case of The Limited and then
move over to Wal-Mart.

The Limited
The Limited, Inc., the specialty-clothing retailer with more than 5600 stores across North
America, uses the look of its stores to match its strategy. Once a small outlet geared to
teenagers, the store has quadrupled in size and changed its look to that of a European
boutique in order to attract older customers. From the grainy wood floors to the black
lacquered display cases, the store serves as a stage for trendy sportswear for women.
While rivals left their store layouts basically unchanged, The Limited tripled the size of
its stores and spent millions on a fresh look. The look is intended to attract customers to
spend more time in its stores and pay more for merchandise.

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In 1999, The Limited spun off Limited Too, a rapidly growing retailer that sells apparel,
swimwear, underwear, lifestyle and personal care products for active, fashion-wear girls
between 7 and 14 years. The company markets and sells “Limited Too” brand name
merchandise exclusively in its 408 stores, through its catazine and on its web site. The
layout of theses stores is quite different- they are colourful and fun with a high-energy
atmosphere. The lighting, which includes handmade globe lights with broken-glass clour
mosaics, enhances the excitement. Limited TOO added a new high-tech element in select
store- full-spectrum digital lighting. It uses a light-emitting diode (LED)-based system.
Unlike conventional techniques that use gels and moving parts to produce colours, this
system generates colours and coloured-lighting effects via microprocessor controlled red,
green, and blue LEDs. The system has no moving parts and generates almost no heat.
Limited Too is using the digital lighting to highlight its signature and most eye-catching
layout element- a 3-D banner soffit curved-wall projection that is 5 feet high and about
50 feet long. The colour-changing digital lights bring the banner soffit to life and reflect
the playful, youthful spirit of the store.
It’s time now for the next case.

Wal-Mart
Wal-Mart, the discount giant that is the largest U.S. retailer, experimented with a
prototype store in Rogers, Arkansas, to appeal to customers who are as concerned about
service as about low prices. With wide aisles, less-cramped racks, sitting area for
customers, and attractive displays, the store looks more like an upscale department store
than a discount store. As in department stores, the displays organize related products-such
as shower curtains, towels, and ceramic bathroom accessories – into visual “vignettes”
that encourage sales of “multiples”, or related products. Unlike department stores,
however, the store has the same bargain-basement prices and wide selection offered in all
its outlets. Many retailing executives consider Wal-Mart the leader in attention to the
layout details that help shape shoppers’ attitudes. The chain is particularly adept at
striking the delicate balance needed to convince customers that its prices are low without
making people feel that its stores are cheap.

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Wal-Mart’s web site (www.walmartstores.com) provides a virtual storefront that is quite

consistent with the shopping experience at its brick—and-mortar physical store. Behind
the Amazon.com-like site architecture is the floor plan of your local superstore: products
organized by department in aisles, with checkout registers and customer service at the
door. While the web site might be exactly right for its target customers, some critics
believe the site reflects a legacy mindset and that Wal Mart’s excellence in the brick-and-
mortar physical world seems to have imposed a mental straitjacket on its efforts in the
virtual world.

*Source – Operations Management Strategy and Analysis (L. J. Krajewski, L. P.

Ritzman) Prentice Hall

Dear students, the choice of a particular layout influences and is influenced by the
process adopted for transformation. We devote the next few minutes in discussing the
Layout types

Layout types
The choice of layout type depends largely on process choice. There are four basic types
of layout: process, product, hybrid, and fixed position.
Process layout
Process layout consists of functional groupings of machines or activities that do similar
work. For example, in the metal-working job shop shown in Figure 7.1, all drills are
located in one area of the machine shop and all milling machines are located in another.

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Figure 7.1 Process layout

The process layout is most common when the same operation must intermittently produce
many different products or serve many different customers. Process arrangement is
typical of a job shop in that it provides high flexibility in the type of products that can be
made. In addition, the diversity of jobs offers more satisfaction to workers. However,
handling and transportation costs are high, since the products must be moved frequently
between departments. There is often high in-process inventory, and scheduling of both
production and movement is more difficult.
Many service organizations use a process arrangement. Libraries have such items
as reference materials, serials, and microfilms grouped in separate areas. Insurance
companies have office layouts in which claims, underwriting, filing, and so on are
grouped as individual departments. Nearly all office layouts are process layouts.

Product layout
Continuous-flow, mass-production, and batch-processing arrangements are usually
organized by product layout. Equipment arrangement is based on the sequence of
operations performed in production, and products move in a continuous path from one
department to the next. An example of a product layout is winemaking, which uses a
layout of the type shown in Figure 7.2. Product arrangements allow for continuity of

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production and the use of specialized handling equipment, since all products move in the
same directions.

Station 1 Station 2 Station 3 Station 4

Figure 7.2 Product layout

Although product layouts often follow a straight line, a straight line is not always best,
and layouts may take an L, O, S, or U shape. A product layout often is called a
production line or an assembly line. The difference between the two is that an assembly
line is limited to assembly processes, whereas a production line can be used to perform
other processes such as machining.

Hybrid layout (Group technology or cellular layout)

In hybrid layout some portions of the facility are arranged in a process layout and others
are arranged in a product layout. Hybrid layouts are used in facilities having both
fabrication and assembly operations. Fabrication operations – in which components are
made from raw materials – have a jumbled flow, whereas assembly operations – in which
components are assembled into finished products – have a line flow.
A retail store is an example of a hybrid layout in a nonmanufacturing setting. The
manage may group similar merchandise, enabling customers to find desired items easily
(a process layout). At the same time, the layout often leads customers along
predetermined paths, such as up and down aisles (a product layout). The intent is to
maximize exposure to the full array of goods, thereby stimulating sales.

Fixed-position layout
The construction of large items, such as heavy machine tools, airplanes, locomotives, and
so on, is usually accomplished in one place. Rather than move the item from one work

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center to another, tools and components are brought to one place for assembly. Many
project processes have this arrangement. A fixed-position layout minimizes the number
of times that the product must be moved and often is the only feasible solution.

With that, we have come to the end of today’s discussions. I hope it has been an
enriching and satisfying experience. See you around in the next lecture.

Points to ponder