I nt r oduct i on

Cellular manufacturing systems (CMS) have been viewed
as a “bridge” from conventional manufacturing to
computer integrated manufacturing (CIM) and the
factory of the future. CMS offers the potential to move
from inflexible, repetitive batch, mass production to more
flexible small-lot production at reasonable costs. The
advantages of CMS have been extensively discussed in
the literature[1]. Conversion of the conventional
production facility layout into a cellular layout has been
attacked through both the adoption of just-in-time (JIT)
production principles and through the advanced
production technology of flexible manufacturing systems
(FMS).
Cell formation design is obviously a key issue in CMS
design. In general, for a production facility with a given
number of machines and part mix to be processed in the
facility, there are three specific decisions in cell formation
design:
(1) the number of manufacturing cells to be established;
(2) the machines constituting each cell; and
(3) the parts assigned to each cell.
Significant research has been reported on part group
formation principles and part-machine grouping
algorithms[2]. Most of these algorithms have been based
on either a part-oriented approach, also called “part
geometry similarity” (i.e. parts are grouped based on the
similarity in shape, size, material, etc.), or a routing-
oriented approach, also called “part processing
similarity” (i.e. parts are grouped based on the similarity
of processing routings).
There are two important assumptions on which most cell
formation algorithms are developed. First, it is presumed
that machine set-up time between successive jobs will be
eliminated or significantly reduced. Second, a controlled
job arrival stream to each manufacturing cell is generally
assumed. That is, most reported cell formation
algorithms are based on the assumption of a “perfect”
production environment where set-up times are
eliminated and job arrivals are controlled in a
deterministic fashion. However, such a perfect production
environment is rarely attained.
There are several practical and specific decisions that
must be made during the cell formation design process.
For example, a choice must be made concerning average
cell size (part mix size). That is, managers must choose a
design along a continuum between a small number of
large cells (i.e. more parts and machines in each cell) vs. a
large number of small cells (i.e. less parts and machines in
each cell). Another key cell formation design decision
involves the choice between a part-oriented approach
formation vs. a routing-oriented approach formation. In
most reported cell formation research, the strategic
impact of these design decisions is either not explicitly
considered or totally ignored[3]. Intuitively, these design
decisions certainly affect shop manufacturing focus and
performance, which will in turn impact the firm’s
competitive advantage in the marketplace. Perhaps more
questionable is the use of a single, tactical criterion to
evaluate cell formation designs. Under the assumption of
a “perfect” production environment, explicitly or
implicitly, most reported cell formation techniques are
designed and evaluated based on a single algorithmic
criterion – the number of exceptional parts/machines that
cannot be placed in the constructed cells, rather than on
the strategic consequences resulting from the designs.
Likewise, system performance measures, such as cell
flow time, resource utilization, and other criteria directly
related to the firm’s strategy are ignored. A cell formation
design which generates a minimum number of
exceptional parts/machines may not necessarily result in
a minimum cell flow time, a maximum resource
87 STRATEGI C I MPLI CATI ONS OF MANUFACTURI NG CELL FORMATI ON DESI GN
I nvest i gat es t he l i nkage and r el at i onshi ps bet ween
speci f i ed cel l desi gn i ssues and t he f i r m’ s compet i t i ve
advant age i n t he mar k et pl ace.
St r at egi c
I mpl i cat i ons of
Manuf act ur i ng
Cel l For mat i on
Desi gn
Integrated Manufacturing Systems, Vol. 5 No. 4/5, 1994, pp. 87-96
©MCBUniversity Press Limited, 0957-6061
Jiaqin Yang and Richard H. Deane
utilization, or an enhancement of the firm’s competitive
advantage in the marketplace.
Finally, several additional factors that have a strong
impact on shop manufacturing focus and system
performance are also ignored in most of the reported cell
formation techniques. These factors include machine
capacity constraints, complexity of job routing
requirements, demand pattern and volume, and part mix
characteristics (i.e. the similarity among part processing
times or set-up times, and the size of part mix). Therefore,
it is not surprising that many suggested benefits of CMS
are not realized after implementation, or the performance
of a converted cellular shop is even worse than the
original functional job shop layout[4,5].
Recognizing the limitation of existing cell formation
design research, this article addresses the relationships
between several specific cell formation design decisions
and major system performance criteria, which in turn are
linked with the firm’s strategic objectives and competitive
advantages in the marketplace.
From a broader perspective, the issues addressed in this
article can be viewed as the important linkage between a
firm’s CMS and cell formation design decisions and its
ultimate mission – to satisfy dynamic and changing
customer requirements in the marketplace. This linkage
is accomplished by considering the firm’s competitive
advantage and strategic objectives in the CMS and cell
formation design process, as depicted in Figure 1.
Recent reports indicate that world class firms are
simultaneously competing on a variety of competitive
dimensions[6]. As such, the narrow manufacturing focus
strategy has been challenged by an emerging paradigm
that argues that firms can and must compete,
simultaneously, on a broad variety of competitive
dimensions in order to be successful in today’s complex
and constantly changing global marketplace[7]. This new
manufacturing focus paradigm brings forward a new and
significant challenge for CMS design (and manufacturing
system design in general). As shown in Figure 1,
manufacturers are facing complex and dynamic customer
requirements in terms of product quality, price,
customization and delivery. The firm’s critical CMS
design decisions (e.g. average cell size and cell
construction approach) must be more directly related to
the firm’s competitive priorities and long-term strategic
objectives (e.g. product and production flexibility, reduced
manufacturing lead time, product quality assurance and
production cost).
Within this article, the next section presents a literature
review on cell formation design issues. In the following
sections, strategic considerations of three specific cell
formation design issues are addressed: part mix
characteristics (e.g. part set-up time similarity and part
processing time similarity); part mix size; and the effects
of set-up time reduction. Conclusions and suggestions are
summarized in the final section.
Li t er at ur e Revi ew
By recognizing similarities among parts to be processed
in the same facility, GT (group technology) principles
have provided the basis for converting the conventional
job shop into a cellular layout with several manufacturing
cells, each with a dedicated part mix. With the advanced
technologies of robotics, automated guided vehicles
(AGVs), automated storage/retrieval system (AS/RS), and
computer-aided design/manufacturing (CAD/CAM), FMS
emerged in the 1970s with the advantages of production
flow line efficiency as well as the flexibility and technical
competence of job shop production. Publications on the
development of GT, CMS, and FMS are numerous[8-10].
Applications of GT, CMS, and FMS have been reported
worldwide[1,11-15]. The reported benefits from GT and
CMS include: cost reduction, decreased production flow
time, increased utilization, reduced inventory level, better
quality control, and fast response to product change[1].
For example, Meredith[16] reports that on average, the
firms (with CMS/FMS) have achieved improvements of
200 per cent in direct labour productivity, an 80 per cent
reduction in manufacturing lead time, a 150 per cent
improvement in machine utilization, a 60 per cent
decrease in inventory level, and a 90 per cent reduction in
scrap and defect rate. It is suggested that these
improvements contribute to related improvements in
innovation rate, production cost, quality assurance,
delivery promises, customization and market image. A
recent industry survey is provided by Wemmerlov and
Hyer[17] about the CMS applications in the US
companies.
There are also less successful reports, even complaints,
concerning below-expectation performances of
88 I NTEGRATED MANUFACTURI NG SYSTEMS 5,4/ 5
Cellular
manufacturing
systems
design decisions
Firm's competitive
priorities and
strategic objectives
Customer
requirements
Cell formation
approach
(part-oriented versus
routeing-oriented)
Average part
mix size
Similarity of part set-up
and processing time
requirements
G Cost reduction
G Product design quality
G Conformance quality
G Production flexibility
G Product flexibility
G Reduced manufacturing
leadtime
G Price leadership
G High quality
G New product
offerings
G Fast delivery
G Reliable delivery
G Product
customization
G
G
G
Fi gur e 1. Linkage between CMS Design Decisions and
Customer Requirements
CMS[4,18,19]. Such reports have motivated research
efforts addressing a variety of issues in the applicability,
justification, system design and implementation of
CMS[3,20]. Studies on the applicability of CMS are
reported by Dale[21], Gerwin[22], Ham and Reed[23] and
Willey and Dale[24]. CMS justification issues are
addressed in Gold[25], Kaplan[26], Michael and
Miller[27], Rosenthal[28] and Tepsic[29]. The
implementation of CMS has also attracted broad attention
from both industry and academia in terms of human
behaviour and organizational sciences[30,31].
In general, there are two categories of CMS design issues
reported in the literature: structural issues (e.g. cell
formation design), and operational issues (e.g. cell
operational procedures and policies)[3]. The structural
issues are primarily focused on the cell formation design
(i.e. part-machine grouping procedures) along with the
selection of tools, fixtures, pallets and material handling
equipment. A considerable number of cell formation
techniques and algorithms have been developed[32-36].
Most of these algorithms, heuristics or analytical
formulations, are based on cluster and matrix analysis.
Major CMS operational issues include cell production
planning, scheduling and control procedures as well as
maintenance and inspection policies. Many reported
models and techniques for planning and scheduling in the
CMS/FMS environment are reviewed in Burgam[37], Hyer
and Wemmerlov[38], Kalkunte et al.[39], Mosier et al.[40],
Vaithianathan and McRoberts[41] and Whitney[42].
There are significant issues remaining in the area of CMS
and structural cell formation design. Research relating a
firm’s strategic objectives and competitive priority
considerations to the cell formation design decision has
been practically nonexistent. Wei and Gaither[43] do
consider intercell capacity imbalance and the cost and
distance of intercell shipments in an integer
programming cell formation model. Aronson and
Klein[44] formulate cell capacity, processing precedence,
and the compatibility of part mix into a mathematical
programming clustering model. A tactical treatment of
these issues is offered rather than a strategic analysis.
Finally, several important production factors such as cell
capacity constraints, stochastic job arrivals,
characteristics of part mix, and the effects of set-up time
reduction have been essentially ignored in the cell
formation design research, although these factors are
certainly present in most production environments and
directly impact system performance.
Under more realistic assumptions of stochastic job
arrivals, analytical queueing models and computer
simulation have been used as important tools in the
evaluation of the CMS design and system performance. In
a series of articles, Karmarker et al.[45-47] model a
manufacturing cell as a single facility queueing system to
investigate the impact of product lot size and set-up time
on single machine queueing time behaviour and other
related system performance measures. Kekre[48] reports
a study examining the impact of changes in part mix size
on cell queueing time. As an extension of Karmarker’s
earlier work, Zipkin[49] offers a discussion on the effect of
batch size on cell batch flow time. Jha[50] presents a study
addressing set-up time reduction in the manufacturing
cell. Modelling a closed manufacturing cell as an M/G/1
queueing system, Yang and Deane[51] investigate the
impact of batch size on manufacturing cell flow time
performance for a heterogeneous part mix. Deane and
Yang[52] further examine the relationships between the
similarity of part set-up and processing time
requirements and the improvements in major flow time
related performance. Yang and Deane[53] demonstrate
that set-up time reduction has a compounding effect on
the cell flow time improvement. Computer simulation
studies of CMS systems have also been reported.
Seidman et al.[54], for example, examine the relationship
between the variability of job flow time and part batch
size for a manufacturing cell. Carrie[55] offers a
comprehensive review on CMS computer simulation
studies.
In summary, the following issues should be further
addressed in the cell formation design literature:
(1) Cell formation techniques must be related to a
firm’s manufacturing focus, strategic objectives,
system performance measures and competitive
advantage in the marketplace – not simply the
minimum number of exceptional parts/machines
generated by a design.
(2) CMS design guidelines must be developed to
address more practical and realistic,but often very
complicated situations, such as stochastic job
arrivals and machine set-up times.
(3) Specific guidelines to answer the following
practical design questions are needed:
G How can other production factors, such as part
mix characteristics and the effects of set-up
time reduction be incorporated into the cell
formation design process?
G What strategic guidelines can be offered to
determine when a design incorporating a large
number of small cells will be desirable over a
design incorporating a small number of large
cells considering the firm’s desired
manufacturing focus and competitive
priorities?
G Under what conditions would the part-
oriented design approach be preferable over
the routeing-oriented design approach?
89 STRATEGI C I MPLI CATI ONS OF MANUFACTURI NG CELL FORMATI ON DESI GN
Par t Mi x Char act er i st i cs and Compet i t i ve
Pr i or i t i es
In general, part mix has been shown to have an important
impact on a number of cell performance measures. Part
set-up time similarity and part processing time similarity
are two specific part mix characteristics that have been
specifically related to cell performance measures such as
cell flow time. In the following discussion, part set-up
time similarity and part processing time similarity refer
to the variances of part set-up times and part processing
times among the part mix. A homogeneous part mix is
one in which part set-up times and processing times have
a high degree of similarity.
Flow time (or cell throughput time) reduction is one of the
major objectives for the CMS management. Among three
major components of flow time through a manufacturing
cell – batch set-up time before processing, batch
processing time, and batch waiting time in queue – CMS
management must focus efforts on reducing the queueing
time within the cell, which will in turn generate
reductions in batch flow time and improvement on other
flow time related performance measures. As
demonstrated in the M/G/1 queueing model for a
manufacturing cell, cell queueing time is in general a
function of part batch size, part set-up and processing
times, and part mix size[51].
Traditionally, manufacturing cells in a CMS are
constructed based on a coding scheme of part geometry
similarity or part routing similarity. That is, part set-up
time similarity and part processing time similarity are
normally not considered in cell formation design.
However, Deane and Yang[52] demonstrate that for a
manufacturing cell that processes a heterogeneous part
mix and has a manufacturing focus on reducing
production flow time, the cell manager may considerably
improve cell flow time and related performance measures
by considering part set-up time similarity and part
processing time similarity in cell formation design
decisions. Specifically, four propositions are developed in
Deane and Yang[52] to show that as the part set-up time
similarity and part processing time similarity increase:
(1) the variance of part batch processing time will
decrease;
(2) the batch flow time through the cell will decrease;
(3) the variance of batch flow time through the cell
will decrease; and
(4) the optimal part batch sizes that minimize cell flow
time will decrease.
These relationships are depicted in Figure 2.
These results can be explained by the fact that in a
manufacturing cell, similar part set-up times and
processing times will result in smaller and similar part
batch sizes since the variance of part batch sizes is
derived from the deviations of part set-up times and
processing times. Further, similar part set-up times and
processing times plus similar part batch sizes will
generate a smaller variation in part batch processing
times. Since part queueing times result from the
variations in part batch arrival intervals and batch
processing times, reduced cell queueing time and flow
time are thus a direct consequence of increased part set-
up time similarity and part processing time similarity.
Improvements in cell flow time, the variance of cell flow
time, and optimal part batch sizes have a direct impact on
the firm’s manufacturing focus and competitive
advantage. More specifically, reduced cell flow time will
result in improvements in firm’s delivery speed, level of
work-in-process inventory, and response to market
changes. In addition, a reduction in the variance of cell
flow time will improve delivery reliability, stabilize
production scheduling and control activities, and reduce
the requirements for safety stock inventory. Smaller part
batch sizes will result in better control of work flow, faster
feedback for quality control, more efficient utilization of
tooling and transportation devices, and greater flexibility
in production planning and scheduling. As a result, the
production environment for JIT manufacturing will be
enhanced. A summary of the strategic relationship
between these key cell formation design decisions and the
firm’s competitive priorities is shown in Figure 3.
In practice, it is possible that considerations of part set-up
time similarity and part processing time similarity in the
90 I NTEGRATED MANUFACTURI NG SYSTEMS 5,4/ 5
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Variance of cell flow time
Average cell flow time
Average optimal batch size
Low High
Similarity of part set-up and processing times
Fi gur e 2. System Performance vs. Similarity of Part Set-up
and Processing Times
cell formation design decision may conflict with other cell
formation principles such as part geometry similarity or
part routing similarity. Considering the firm’s strategic
objectives and competitive priorities, this cell formation
design conflict may suggest two design alternatives:
(1) Incorporating part set-up time similarity and part
processing time similarity into the traditional
clustering/matrix analysis (or mathematical
programming) models along with the part
geometry similarity/part routing similarity. In this
approach, a key issue involves the appropriate
“weighting” of part set-up time similarity and part
processing time similarity in comparison with part
geometry similarity/part routing similarity (or
other design factors such as: intercell capacity,
part processing compatibility, etc.).
(2) From the results of a traditional clustering/matrix
analysis model, adjusting the final cell
construction based on part set-up time similarity
and part processing time similarity. Ex post facto
“trade-offs” would be evaluated when part set-up
time similarity and part processing time similarity
results in a conflict with other cell formation
principles.
From a managerial decision-making perspective, it will
be methodologically difficult to consider part set-up
time similarity and part processing time similarity in
the cell formation design. However, as illustrated in this
section, such factors must not be ignored because of
methodological difficulties. The suggestions above will
allow a CMS manager to recognize when part set-up
time similarity and part processing time similarity
should be further addressed in the cell formation design
decision.
The Par t Mi x/ Cel l Si ze Deci si on
The literature offers little guidance to the manager
attempting to select an appropriate cell size during the
cell formation design process. For example, a larger
number of smaller cells (e.g. ten cells of four machines
each) might be considered by a manager as a cell
formation design alternative to a smaller number of
larger cells (e.g. five cells of eight machines each). The
manager is generally instructed by the literature to
evaluate the two competing cell formation designs based
on the number of exceptional parts that cannot be
processed within each design. However, other factors
such as cell capacity constraints, part processing
capability, tooling and associated devices, and other
engineering considerations, may also be important
factors in this trade-off decision. In reality, each of the two
hypothetical designs offers different strategic advantages
that must be considered in light of a firm’s objectives and
competitive priorities.
The impact of part mix size on single-machine cell
performance for a homogeneous product mix (i.e. all
parts in the mix have identical set-up and processing time
requirements) was originally examined by Kekre[48] and
extended for a general heterogeneous product mix (i.e.
parts in the mix have different set-up and processing time
requirements) by Deane and Yang[52]. Based on a
simulation result, Kekre shows that cell queueing time
and flow time will increase at a decreasing rate as the size
of a homogeneous part mix increases. Kekre explains his
results based on the fact that a manufacturing cell with a
smaller part mix will result in more “savings” in terms of
job set-ups when consecutive batches of arrivals at the
cell are of same part type. The reduced number of job set-
ups directly translates into a reduction in cell queueing
time and cell flow time and an increase in effective cell
utilization. The part batch sizes can also be reduced as
the number of job set-ups is reduced, since it is the job set-
ups which force the parts to be processed in relatively
larger batch sizes.
For a general heterogeneous part mix, Deane and
Yang[52] develop two propositions regarding the impact
of part mix size on cell performance: cell queueing time
and flow time will increase as part mix size increases; and
the optimal part batch sizes that minimize cell queueing
time and flow time will increase as part mix size
increases. These relationships are depicted in Figure 4.
Based on an empirical demonstration, Yang and
Deane[53] further show that improved cell flow time
performance is not only the result of the savings from
processing consecutive part batches of the same type, but
more important, from improvements arising from the fact
that more machine time must be allocated to job set-ups
as part mix size increases under a fixed cell processing
workload level. As a consequence, either the cell work
91 STRATEGI C I MPLI CATI ONS OF MANUFACTURI NG CELL FORMATI ON DESI GN
Improved delivery
reliability
Stabilized
production flow
Reduced safety
stock level
Improved delivery
speed
Fast response to
market changes
Fast feedback to
quality control
More flexibility
in planning
Better control of
work flow
Reduced
variance
of flow
times
Improved
queueing
and cell
flow time
performance
Reduced
optimal
product
lotsize
Reduced
variance
of batch
processing
times
Similar batch
processing
times
Similar
product batch
sizes
Part
set-up
time
similarity
Part
processing
time
similarity
(Intermediate consequences)
Competitive priorities
Fi gur e 3. Part Set-up Time and Processing Time Similarity
and Competitive Priorities
intensity level must increase or the effective processing
time must decrease, either of which will result in a longer
cell queueing time and flow time, and force the part batch
sizes to increase. That is, as the part mix size increases, it
is the increased proportion of machine time devoted to job
set-ups that results in the major deterioration of cell flow
time performance.
The results from Kekre[48] and Deane and Yang[52]
provide managerial insights in deciding whether to build
a CMS facility with a larger number of smaller cells or a
smaller number of larger cells. First, the propositions
developed by Deane and Yang[52] indicate that when
other factors (e.g. cell capacity constraints, part
processing compatibility, tooling requirements, etc.) do
not dictate a preference between the two approaches, a
CMS facility with a larger number of smaller cells will
ensure better performance in terms of flow time and other
related measures as compared to a CMS facility with a
smaller number of larger cells. Another managerial
implication is evident when considering prospective
“new” parts to be added to an existing CMS. As cell flow
time and delivery performance (i.e. delivery speed and
reliability) become more important to a firm’s competitive
strategy, the formation of new cells in the system to
process new parts becomes a more attractive alternative
than adding the new parts (and new machines) to existing
cells. As a result of improved flow time performance and
smaller part batch sizes, the potential competitive
advantage from the “larger number of smaller cells” type
design may include improvements in delivery speed and
reliability, response to market changes, faster feedback
for quality control, and stabilization of production
scheduling and control activities. The suggested savings
in job set-ups in such smaller sized cells may help ensure a
cost reduction in labour and material handling, and an
upgraded quality management process.
However, there are also strategic disadvantages
associated with the “larger number of smaller cells” type
design, compared with its alternative – the “smaller
number of larger cells” type design. For example, by
constructing smaller cells with fewer parts and machines
in each cell, the system may lose flexibility in terms of
product change, part redesign, and potential volume
expansion. In addition, increased cost from additional
duplication of machines and tools must also be
considered, since a lower utilization will be realized on
duplicate machines and tools and some of these
duplications may be avoided in the “smaller number of
larger cells” type design. Conversely, a smaller number of
larger cells will allow more flexibility for product change,
part redesign, engineering change, new product
introductions, product volume expansion, and cell
production planning and scheduling. There are also
potential cost savings froma reduction in machine and
tool duplication, maintenance for machines and
equipment, planning and control activities, and employee
training. The overall strategic comparison between the
two design approaches is summarized in Figure 5.
Since many other factors must also be considered in the
structural cell formation design decision, there may, in
practice, not be a dominant design choice. However,
important strategic guidelines can be offered. Unless
there are strong contravening factors, the “larger number
of smaller cells” design approach, as suggested in Figure
5, will be more appropriate for firms that have a narrow
and stable product mix and a high priority on minimal
production lead time. Such a design choice can offer the
firm competitive advantages associated with delivery
speed and delivery reliability. In contrast, the “smaller
number of larger cells” design approach will be more
appropriate for firms that have a broad and changing
product mix with competitive priorities associated with
production flexibility, product innovation and
customization. In general, the “larger number of smaller
cells” approach is more supportive of production systems
where simplified work flow and fast feedback from a
short manufacturing lead time will also enhance product
conformance quality and inventory cost reduction.
Comparatively, the “smaller number of larger cells”
approach is more appealing to small-to-medium batch
production systems where flexibility in product change,
part redesign, and frequent engineering changes will
improve product design quality and cost reduction by
eliminating duplication of machines and tools.
Product life cycle considerations may certainly play a role
in this cell formation design decision, as a firm’s
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Average cell flow time
Average optimal batch size
Small Large
Part mix size
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Fi gur e 4. System Performance vs. Cell Part Mix Size
manufacturing priorities may change as groups of
products evolve through their life cycles. For example, at
the introduction and growth stages, production flexibility
(i.e. flexibility in part redesign and product volume
expansion) may be a key competitive priority as the firm
competes on the basis of new product introduction and
high product design quality. The “smaller number of
larger cells” design approach may thus be a preferable
choice at these early product life cycle stages. Such an
approach increases production flexibility and reduces
risk should new products not be well-received by
customers. However, for products that have succeeded in
the marketplace and are in more maturity product life
cycle stages, the firm is facing more stable production
requirements. Such a firm usually has a competitive
priority that is focused on reduced production lead time
and cost effectiveness. Customer requirements for such
firms usually include delivery performance (both
delivery speed and delivery reliability), product
conformance quality, and price leadership. Such a firm
may find that the “larger number of smaller cells” design
approach is more appropriate.
In summary, managers must make the part mix/cell size
structural design decision based on the consideration of
all relevant factors, especially the firm’s long-term
strategic objectives and competitive advantage in the
marketplace.
Set - up Ti me Reduct i on Ef f ect s: Par t - or i ent ed vs.
Rout ei ng- or i ent ed
The importance of reducing job set-up times to achieve
JIT manufacturing is well recognized[56]. Set-up time
reduction is particularly important to firms attempting to
convert traditional job shops into CMS cellular shops.
Research efforts addressing specific set-up time reduction
techniques, the benefits from set-up time reduction, and
the cost trade-offs involved in set-up time reduction
decisions have been widely reported in the literature[57-
63]. The suggested potential benefits from set-up time
reduction include reduced job flow time, smaller batch
sizes, improved quality control, increased flexibility, and
reduced inventory and backorder costs[58].
Given its significant impact on the firm’s strategic
objectives and competitive priorities, the consideration of
set-up time reduction effects must be actively addressed
during cell formation design. Specifically, the
consideration of potential effects from set-up time
reduction efforts in a key cell formation design choice –
the part-oriented cell construction vs. the routing-
oriented cell construction – is discussed in this section.
In the existing literature, the decision to construct
manufacturing cells based on the part-oriented approach
or the routing-oriented approach has been addressed in
terms of the dominance between part geometry similarity
and part routing similarity. That is, this design choice is
primarily viewed as an industrial engineering issue,
rather than a strategic managerial concern. However, as
suggested by Wemmerlov and Hyer[3], such a favourable
dominance may not exist in most practical industrial
settings, especially for those in the conversion process
from traditional job shops into CMS cellular shops.
Instead, such a design choice in the cell formation process
must be made based on more comprehensive information
that includes not only part processing compatibility and
part geometry similarity, but also part demand volume
and pattern, machine capacity, and other related
production factors. This section suggests that the firm’s
strategic objectives must also be considered in this key
cell formation design decision. The linkage between the
potential effects of set-up time reduction and this key cell
formation design decision is addressed through two
specific considerations: set-up time commonalty and set-
up time reduction method.
Set-up Time Commonalty
“Set-up time commonalty” refers to the homogeneity
among part set-up time requirements so that a single set-
up time reduction effort (e.g. a procedure innovation, or
93 STRATEGI C I MPLI CATI ONS OF MANUFACTURI NG CELL FORMATI ON DESI GN
Improved delivery
speed and reliability
Stabilized production
scheduling
and control activities
Fast feedback to
quality control
Reduced work in
progress inventory
High utilization
of system resources
Reduced cost in labour
and material handling
Better control of
work flow
Efficient utilization
transportation
Reduced
part batch
flow time
Reduced
part batch
sizes
Reduced
job
set-ups
A larger
number
of smaller
cells
(Intermediate consequences)
New product
introduction flexibility
Engineering change
flexibility
Volume expansion
flexibility
Planning and scheduling
flexibility
Cost reduction in
equipment investment
Cost reduction in
equipment maintenance
Cost reduction in
employee training
Efficient utilization
system resources
More
flexible
to changes
Less
duplication
of machines
and tools
A smaller
number
of larger
cells
Competitive priorities Design
approach
Fi gur e 5. Part Mix Size – Design Approach and Competitive
Priorities
the use of a new set-up device) will result in reductions in
set-up time for all related parts. In general, set-up
operations between job changeovers are required due to
changes in job geometry (e.g. changes in part material
type, shape, or size) or the changes in processing
procedures (e.g. changes in tools and fixtures), or both,
depending on the specific nature of the operation and the
industry. As a result, the degree of part set-up time
commonalty will normally be strongly related to the
selection of the design approach (i.e. part-oriented or
routing-oriented) by which cells are constructed.
Specifically, the part-oriented cell construction approach
should be preferable when part set-up time commonalty
derives from part geometry similarity, while the routing-
oriented cell construction approach should be favoured
when the part set-up time commonalty results from part
processing similarity. It may be possible that the part set-
up time commonalty is dominated by part geometry
similarity in one subset of parts and dominated by part
processing similarity in another subset of parts. In such
instances, a combination of the two cell construction
approaches may be a preferred choice. That is, parts with
geometrical part set-up time commonalty are placed in
cells based on a part-oriented technique, and parts with
processing part set-up time commonalty are placed into
cells with a routing-oriented procedure.
Set-up Time Reduction Method
Research addressing the more technical issues in set-up
time reduction has been reported in the literature[62]. In
general, reported set-up time reduction methods can be
classified into two categories: adoption of new
technologies; and incremental industrial engineering
improvements. Set-up time reduction through the
adoption of new technology is usually accomplished
through the implementation of advanced manufacturing
systems (e.g. FMS). While the advantages of adopting
new technologies have been widely reported, the initial
investment in implementing new technologies can be
quite high. Accordingly, incremental set-up time
reduction through a series of relatively low-cost industrial
engineering improvements has been observed as an
increasing trend in many industries, especially for firms
that are in the process of converting traditional functional
layout job shops into CMS cellular shops[50]. Managerial
considerations of the two set-up time reduction methods
provide insights in choosing between a part-oriented
design approach vs. a routing-oriented design approach.
First, for a new manufacturing system with advanced
technologies, the routing-oriented design approach
should prove more advantageous since the effects of new
technologies on set-up time reduction is normally realized
through innovative processing devices and procedures. In
contrast, for a CMS where set-up time reduction is to be
achieved through a series of incremental industrial
engineering improvements, the design choice will depend
more on the technical details of the planned set-up time
reduction procedures. That is, if the planned series of set-
up time reduction techniques is based on the commonalty
of part geometrical characteristics (e.g. material type,
shape of part), the part-oriented approach will be
preferable. These set-up time reduction relationships are
shown in Figure 6.
For firms converting traditional job shops into CMS
cellular shops, consideration of set-up time commonalty
and set-up time reduction method should be related to
this key cell construction design choice between a part-
oriented cell design approach and a routing-oriented cell
design approach. These choices in turn have a direct
impact on the firms’ desired manufacturing focus and
competitive priorities. For example, when converting a
job shop which has a wide part mix range and processing
oriented part set-up time commonalty, the design choice
of a routing-oriented cell construction approach may
provide the firm with the opportunity to reduce job set-up
times significantly on a continuing basis. Such an
advantage will enhance the firm’s manufacturing focus
on minimal production lead time and competitive
priorities associated with delivery speed and delivery
reliability, and market-oriented production flexibility.
Concl usi ons and Fut ur e Resear ch Needs
Cell formation design is one of the critical issues in CMS
design. Recognizing limitations in the existing literature,
this article addresses the importance of considering
firm’s strategic objectives and competitive priorities in
the cell formation design decision. Specifically, three
practical cell formation design issues are discussed:
considerations of part set-up time similarity and part
processing time similarity, part mix size determination
94 I NTEGRATED MANUFACTURI NG SYSTEMS 5,4/ 5
Improved delivery
reliability
Stabilized production
scheduling
and control activities
Reduced safety stock
requirements
Improved delivery
speed
Reduced work in
progress inventory
Fast response to
market changes
More flexibility in
production scheduling
Better control of
work flow
Part-
oriented
approach
Enhance
set-up time
reduction
effects
Geometrical
part set-up
time
commonalty
Cell
formation
design
approach Competitive priorities
Consideration
of set-up time
reduction
effects
Efficient utilization of
tooling and transportation
Set-up time
reduction
through
incremental
improvement
Routeing-
oriented
approach
Processing
oriented part
set-up time
commonalty
Set-up time
reduction
through
new
technology
Fast feedback to
quality control
Fi gur e 6. Set-up Time Reducation Effects: Cell Formation
Design Approach and Competitive Priorities
(i.e. a smaller number of larger cells vs. a larger number of
smaller cells), and considerations of set-up time reduction
effects in choosing between a part-oriented and a routing-
oriented cell construction approach. This research does
not suggest that cell formation design decisions should be
made exclusively on the basis of the factors highlighted
in this article. In contrast, this article suggests that cell
formation design decisions must not be made only on the
basis of more tactical, although perhaps more convenient
decision criteria. Rather, cell design decisions must be
viewed as multi-criteria decision-making problems,
including strategic considerations. Discussion of cell
formation as a tactical decision is a disservice to CMS and
to management. This article does offer insights for the
development of guidelines to the cell formation design on
a more broad and practical basis. The investigation of
other consequential factors (e.g. part routing flexibility,
part demand pattern and volume, intercell capacity
balance, etc.) and their strategic impact on the CMS and
cell formation design also need to be addressed further.
The CMS and cell formation design literature is
continuously growing, especially with regard to
methodological expansion. Examples of recent
developments that are likely to have an impact in cell
formation design include computerized expert systems
(ES) and the application of neural computing techniques.
The strategic considerations in the CMS and cell
formation design should also be addressed along with
these new methodological developments. Comprehensive
and distinctive studies must be undertaken in order to
offer decision makers a more diverse set of guidelines for
CMS design in the often very complicated situations that
occur in industry.
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96 I NTEGRATED MANUFACTURI NG SYSTEMS 5,4/ 5
Jiaqin Yang is Assistant Professor of Management, University of North Dakota, Grand Forks, ND and Richard H. Deane is
in the Department of Management, Georgia State University, Atlanta, Georgia, USA.