CHAPTER 6

Process Se
lection and
Facilit y Layout
 LEARNING OBJECTIVES
0 After completing this chapter, you should be able to:
1. Explain the strategic importance of process selection.
2. Describe the influence that process selection has on an
organization.
3. Compare the basic processing types.
4. Explain the need for management of technology.
5. List some reasons for redesign of layouts.
6. Describe the basic layout types, and the main
advantages and disadvantages of each.
7. Solve simple line-balancing problems.
8. Develop simple process layouts.
 INTRODUCTION
0Process Selection refers to deciding on the way
production of goods or services will be organized.
0 How an organization approaches process selection is
determined by the organization’sprocess strategy.
Key aspects include:
1. Capital intensity: the mix of equipment and labor
that will be used by the organization.
2. Process flexibility: the degree to which the system
can be adjusted to changes in processing
requirements due to such factors as changes in
product or service design, changes in volume
processed, and changes in technology.
 PROCESS SELECTION
0Process choice is demand driven. Three primary
questions bear on process selection:
1. How much variety in products or services will the
system need to handle?
2. What degree of equipment flexibility will be needed?
3. What is the expected volume of output?

NOTE: Answer to these questions will serve as a guide

to selecting an appropriate process.
 PROCESS TYPES
0 Job Shop: it usually operates on a relatively small scale. It is used
when a low volume of high-variety goods or services will be
needed.
- Processing is intermittent because work includes small jobs
that each with somewhat different processing requirements.
0 Batch: it is used when a moderate volume of goods or services is
desired, and it can handle a moderate variety in products or
services.
- The equipment need not to be as flexible as in a job shop,, but
processing isstill intermittent.
0 Repetitive: it is used when higher volumes of more standardized
goods or services are needed. This type of process is sometimes
referred to asassembly. Also,mass customization is an option.
 PROCESS TYPES
0 Continuous: it is used when a very high volume of
nondiscrete, highly standardized output is desired.
These process types are found in a wide range of
manufacturing and service settings.
 PROCESS TYPES

All these process types (job shop, batch, repetitive, and

continuous ) are typically ongoing operations. However, some
situations are not ongoing but instead are of limited
durations. In such instances, the work is often organized as a
project.
 PROCESS TYPES
0 Project: it used for work that is nonroutine, with a
unique set of objectives to be accomplished in a
limited time frame. This type of process used by an
organization influences a great many activities of
the organization.
 PRODUCT AND SERVICE
PROFILING
0Product and service profiling can be used to avoid
any inconsistencies by identifying key product or
service dimensions and then selecting appropriate
processes. Key dimensions often relate to the range
of products or services that will be processed,
expected order sizes, pricing strategies, expected
frequency of schedule changes, and order-winning
requirements.
SUSTAINABLE PRODUCTION
OF GOODS AND SERVICES
0 According to theLowell Center for Sustainable Production (http://
sustainableproduction.org), sustainable
“ production is the creation of
goods and services using processes and systems that are: non-
polluting; conserving of energy and natural resources; economically
efficient; safe and healthful for workers, communities, and consumers;
and socially and creatively rewarding for all working people.”
0 To achieve this, the Lowell Center advocates designing and operating
processes in ways that:
- wastes and ecologically incompatible byproducts are reduced,
eliminated or recycled on-site
- chemical substances or physical agents and conditions that present
hazards to human health or the environment are eliminated
- energy and materials are conserved, and the forms of energy and
materials used are most appropriate for the desired ends
Work spaces are designed to minimize or eliminate chemical, ergonomic
and physical hazard
 LEAN PROCESS DESIGN
0Lean process design is guided by general principles.
One principle of particular interest here is waste
reduction, which relates to sustainability objectives.
0 It also focuses on variance reduction in workload
over the entire process to achieve level production
and thereby improve process flow.
0 Lean process design has broad applications in
seemingly diverse areas such as health care
delivery systems, manufacturing, construction
projects, and process reengineering.
 TECHNOLOGY
0Technological innovation refers to the discovery and
development of new or improved products, services, or
processes for producing or providing them.
0Technology refers to applications of scientific
discoveries to the development and improvement of
goods and services and/or the processes that produce or
provide them.
0High technology refers to the most advanced and
developed equipment and methods.
0Process technology includes methods, procedures, and
equipment used to produce goods and provide services.
0Information technology is the science and use of
computers and other electronic equipment to store,
process, and send information.
 AUTOMATION
0 Automation is machinery that has sensing and control devices that
enable it to operate automatically.
0 Three (3) kinds of automation:
- Fixed automation: it is the least flexible. It uses high-cost, specialized
equipment for a fixed sequence of operations.
- Programmable automation: it involves the use of high-cost, general-
purpose equipment controlled by computer program that provides both
the sequence of operations and specific details about each operation.
1.Computer-aided manufacturing (CAM) refers to the use of
computers in process control, ranging from robots to automated quality
control,
2.Numerically controlled (N/C) machines are programmed to
follow a set of processing instructions based on mathematical
relationships that tell the machine the details of the operations to be
performed.
 AUTOMATION
0Computerized Numerical Control (CNC) : individual machines that
often have their own computer.
0Direct Numerical Control (DNC) : one computer may control a number
of N/C machines.
- Flexible automation: it evolved from programmable automation. It
uses equipment that is more customized than that of programmable
automation.
1.Flexible manufacturing system (FMS) is a group of machines
that include supervisory computer control, automatic material handling,
and robots or other automated processing equipment.
2.Computer-integrated manufacturing (CIM) is a system that uses
an integrating computer system to link a broad range of manufacturing
activities, including engineering design, flexible manufacturing systems,
purchasing, order processing, and production planning and control.
 PROCESS STRATEGY
0Flexibility does not always offer the best choice in
processing decisions.
0 The implication is clear: flexibility should be adopted
with great care, its applications should be matched
with situations in which a need for flexibility clearly
exists.
0 Two reasons for decision makers to choose flexible
systems:
1. Demand variety or uncertainty exists about
demand.
2. Overcome through improved forecasting.
 STRATEGIC RESOURCE
ORGANIZATION: FACILITIES
LAYOUT
0Layout refers to the configuration of departments, work centers,
and equipment, with particular emphasis on movement of work
(customers or materials) through the system.
0 Three (3) basic reasons why layout decision is important:
1. They require substantial investments of money and effort.
2. They involve long-term commitments, which makes mistakes
difficult to overcome.
3. They have a significant impact on the cost and efficiency of
operations.
0 The most common reasons for redesign of layouts include
inefficient operations, accidents or safety hazards, changes in the
design of products or services, introduction of new products or
services, changes in the volume of output or mix of outputs,
changes in methods or equipment, changes in environmental or
other legal requirements, and morale problems.
 STRATEGIC RESOURCE
ORGANIZATION: FACILITIES
LAYOUT
0 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.
REPETITIVE PROCESSING:
PRODUCT LAYOUTS
0Product layouts are used to achieve a smooth and
rapid flow of large volumes of goods or customers
through a system.
0Production line is the standardized layout arranged
according to a fixed sequence of production tasks.
0Assembly line is the standardized layout arranged
according to a fixed sequence of assembly tasks.
 MAIN ADVANTAGES OF
PRODUCT LAYOUTS
0 A high rate of output.
0 Low unit cost due to high volume. The high cost of
specialized equipment is spread over many units.
0 Labor specialization, which reduces training costs and time,
and results in a wide span of supervision.
0 Low material-handling cost per unit. Material handling is
simplified because units follow the same sequence of
operations. Material handling is often automated.
0 A high utilization of labor and equipment.
0 The establishment of routing and scheduling in the initial
design of the system. These activities do not require much
attention once the system is operating.
0 Fairly routine accounting, purchasing, and inventory control.
PRIMARY DISADVANTAGES
OF PRODUCT LAYOUTS
0 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.
0 Poorly skilled workers may exhibit little interest in maintaining
equipment or in the quality of output.
0 The system is fairly inflexible in response to changes in the volume of
output or changes in product or process design.
0 The system is highly susceptible to shutdowns caused by equipment
breakdowns or excessive absenteeism because workstations are
highly interdependent.
0 Preventive maintenance, the capacity for quick repairs, and spare-
parts inventories are necessary expenses.
0 Incentive plans tied to individual output are impractical since they
would cause variations among outputs of individual workers, which
would adversely affect the smooth flow of work through the system.
REPETITIVE PROCESSING:
PRODUCT LAYOUTS
0U-Shaped Layouts is more compact; it often
requires approximately half the length of a straight
production line.
0 It also permits increased communication among
workers on the line because workers are clustered,
thus facilitating teamwork.
NONREPETITIVE PROCESSING:
PROCESS LAYOUTS
0 Process layouts (functional layouts) are designed
to process items or provide services that involve a
variety of processing requirements. The layouts
feature departments or other functional groupings
in which similar kinds of activities are performed.
- Intermittent processing : discontinuous work flow.
 MAIN ADVANTAGES OF
PROCESS LAYOUTS
0 The systems can handle a variety of processing
requirements.
0 The systems are not particularly vulnerable to
equipment failures.
0 General-purpose equipment is often less costly than
the specialized equipment used in product layouts
and is easier and less costly to maintain.
0 It is possible to use individual incentive systems.
PRIMARY DISADVANTAGES
OF PROCESS LAYOUTS
0 In-process inventory costs can be high if batch processing
is used in manufacturing systems.
0 Routing and scheduling pose continual challenges.
0 Equipment utilization rates are low.
0 Material handling is slow and inefficient, and more costly
per unit than in product layouts.
0 Job complexities often reduce the span of supervision and
result in higher supervisory costs than with product layouts.
0 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.
0 Accounting, inventory control, and purchasing are much
more involved than with product layouts.
FIXED-POSITION LAYOUTS
0Fixed-position layouts is layout in which the product
or project remains stationary, and workers,
materials, and equipment are moved as needed.
0 It is used in large construction projects (buildings,
power plants, dams) whereas the nature of the
product dictates this kind of arrangement: weight,
size, bulk, or some other factor makes it
undesirable or extremely difficult to move the
product.
 COMBINATION LAYOUTS
0 The three basic layout types are ideal models, which may be altered
to satisfy the needs of a particular situation. It is not hard to find
layouts that represent some combination of these pure types.
0 Process layouts and product layouts represent two ends of a
continuum from small jobs to continuous production. Process layouts
are conducive to the production of a wider range of products or
services than product layouts, which is desirable from a customer
standpoint where customized products are often in demand. However,
process layouts tend to be less efficient and have higher unit
production costs than product layouts. Some manufacturers are
moving away from process layouts in an effort to capture some of the
benefits of product layouts. Ideally, a system is flexible and yet
efficient, with low unit production costs. Cellular manufacturing, group
technology, and flexible manufacturing systems represent efforts to
move toward this ideal.
 CELLULAR LAYOUTS
0Cellular production is a type of layout in which
workstations are grouped into what is referred to as
a cell. Groupings are determined by the operations
needed to perform work for a set of similar items,
or part families, that require similar processing.
 CELLULAR LAYOUTS
0Single-minute exchange of die (SMED) enables an organization to
quickly convert a machine or process to produce a different (but
similar) product type. Thus, a single cell can produce a variety of
products without the time-consuming equipment changeover
associated with large batch processes, enabling the organization
to quickly respond to changes in customer demand.
0Right-sized equipment is often smaller than equipment used in
traditional process layouts, and mobile, so that it can quickly be
reconfigured into a different cellular layout in a different location.
0Group Technology is an effective cellular manufacturing which
have groups of identified items with similar processing
characteristics.
 SERVICE LAYOUTS
0Service layouts can often be categorized as product,
process, or fixed-position layouts. In a fixed-position
service layout (e.g., appliance repair, roofing, landscaping,
home remodeling, copier service), materials, labor, and
equipment are brought to the customer’s residence or
office). Process layouts are common in services due
mainly to the high degree of variety in customer
processing requirements.
0Service layout requirements are somewhat different from
manufacturing layout requirements.
0 Two (2) key factors in service layout design:
1. Degree of customer contact
2. Degree of customization
WAREHOUSE AND STORAGE
LAYOUTS
0 The design of storage facilities presents a different set of
factors than the design of factory layouts. Frequency of
order is an important consideration; items that are
ordered frequently should be placed near the entrance to
the facility, and those ordered infrequently should be
placed toward the rear of the facility. Any correlations
between items are also significant (i.e., item A is usually
ordered with item B), suggesting that placing those two
items close together would reduce the cost and time of
picking (retrieving) those items. Other considerations
include the number and widths of aisles, the height of
storage racks, rail and/or truck loading and unloading,
and the need to periodically make a physical count of
stored items.
 RETAIL LAYOUTS
0 The objectives that guide design of manufacturing layouts
often pertain to cost minimization and product flow. However,
with retail layouts such as department stores, supermarkets,
and specialty stores, designers must take into account the
presence of customers and the opportunity to influence sales
volume and customer attitudes through carefully designed
layouts. Traffic patterns and traffic flow are important factors
to consider. Some large retail chains use standard layouts for
all or most of their stores. This has several advantages. Most
obvious is the ability to save time and money by using one
layout instead of custom designing one for each store.
Another advantage is to avoid confusing consumers who visit
more than one store. In the case of service retail outlets,
especially small ones such as dry cleaners, shoe repair, and
auto service centers, layout design is much simpler.
 OFFICE LAYOUTS
0Office layouts are undergoing transformations as
the flow of paperwork is replaced with the
increasing use of electronic communications. This
lessens the need to place office workers in a layout
that optimizes the physical transfer of information
or paperwork. Another trend is to create an image
of openness; office walls are giving way to low-rise
partitions, which also facilitate communication
among workers.
AUTOMATION IN SERVICES
0 One way to improve productivity and reduce costs in services is
to remove the customer from the process as much as possible.
Automated services is one increasingly used alternative. For
example, financial services use ATMs, automated call answering,
online banking, and electronic funds transfers; retail stores use
optical scanning to process sales; and the travel industry uses
electronic reservation systems. Other examples of automated
services include shipping, mail processing, communication, and
health care services.
0 Automating services means more-standardized services and less
need to involve the customer directly. However, service
standardization brings trade-off. Generally costs are reduced and
productivity increases, but the lack of customization and the
inability to deal with a real person raise the risk of customer
dissatisfaction.
 DESIGNING PRODUCT
LAYOUTS: LINE BALANCING
0Line balancing is the process of assigning tasks to
workstations in such a way that the workstations
have approximately equal time requirements.
0 The goal of line balancing is to obtain task groupings
that represent approximately equal time
requirements.
0 Lines that are perfectly balanced will have a smooth
flow of work as activities along the line are
synchronized to achieve maximum utilization of labor
and equipment. The major obstacle to attaining a
perfectly balanced line is the difficulty of forming
task bundles that have the same duration.
 DESIGNING PRODUCT
LAYOUTS: LINE BALANCING
0Cycle time is the maximum time allowed at each
workstation to perform assigned tasks before the work
moves on. The cycle time also establishes the output
rate of a line.
0 Formula:
Output rate = Operating time per day/Cycle time
0 As a general rule, the cycle time is determined by the
desired output; that is, a desired output rate is selected,
and the cycle time is computed. If the cycle time does
not fall between the maximum and minimum bounds, the
desired output rate must be revised.
0 Formula:
Cycle time = Operating time per day/Desired output rate
 DESIGNING PRODUCT
LAYOUTS: LINE BALANCING
0
 DESIGNING PRODUCT
LAYOUTS: LINE BALANCING
0Precedence diagram is a very useful tool in line
balancing whereas it is a diagram that shows
elemental tasks and their precedence requirements.
0 It visually portrays the tasks that are to be
performed along with the sequential requirements,
that is, the order in which tasks must be performed.
The diagram is read from left to right, so the initial
task/s are on the left and the final task is on the
right.
 DESIGNING PRODUCT
LAYOUTS: LINE BALANCING
0Balance delay is the percentage of idle time of a line
0Formula:
% of idle time = Idle time per cycle
N actual (Cycle Time) x 100
where:
N actual = actual number of stations
0 In effect, this is the average idle time divided by the cycle
time, multiplied by 100.
NOTE: That cycle time refers to the actual cycle time that is
achieved.
0Efficiency of the line, formula:
Efficiency = 100% - percent idle time
 SOME GUIDELINES FOR
LINE BALANCING
0 In balancing an assembly line, tasks are assigned one at a time to the line,
starting at the first workstation. At each step, the unassigned tasks are checked to
determine which are eligible for assignment.
0 Technological constraints tell us which elemental tasks are eligible to be
assigned at a particular position on the line. Technological constraints can result
from the precedence or ordering relationships among the tasks.
0 Output constraints, on the other hand, determine the maximum amount of work
that a manager can assign to each workstation, and this determines whether an
eligible task will fit at a workstation.
0 To clarify the terminology, following tasks are all tasks that you would encounter
by following all paths from the task in question through the precedence diagram.
Preceding tasks are all tasks you would encounter by tracing all paths backward
from the task in question.
0 The positional weight for a task is the sum of the task times for itself and all its
following tasks.
0 Neither of the heuristics guarantees the best solution, or even a good solution
to the line balancing problem, but they do provide guidelines for developing a
solution. It may be useful to apply several different heuristics to the same problem
and pick the best (least idle time) solution out of those developed.
 OTHER APPROACHES
0Parallel workstations increase the work flow and
provide flexibility.

0Cross-train is used often in lean production systems

whereas workers are able to perform more than one
task. This is sometimes referred to as dynamic line
balancing.
0Mixed model line is a line that handles more than one
product on the same line. This approach offers great
flexibility in varying the amount of output of the
products.
 DESIGNING PROCESS
LAYOUTS
0 The main issue in designing process layouts concerns
the relative positioning of the departments involved.
Layouts can also be influenced by external factors such
as the location of entrances, loading docks, elevators,
windows, and areas of reinforced flooring. Also
important are noise levels, safety, and the size and
locations of restrooms.
0 The majority of layout problems involve single rather than
multiple locations, and they present unique combinations
of factors that do not lend themselves to a standardized
approach. Consequently, these layouts require
customized designs. A major obstacle to finding the most
efficient layout of departments is the large number of
possible assignments.
 MEASURES OF
EFFECTIVENESS
0 One advantage of process layouts is their ability to satisfy a
variety of processing requirements. Customers or materials in
these systems require different operations and different
sequences of operations, which causes them to follow different
paths through the system. Material-oriented systems necessitate
the use of variable-path material-handling equipment to move
materials from work center to work center. In customer-oriented
systems, people must travel or be transported from work center
to work center. In both cases, transportation costs or time can be
significant. Because of this factor, one of the major objectives in
process layout is to minimize transportation cost, distance, or
time. This is usually accomplished by locating departments with
relatively high interdepartmental work flow as close together as
possible.
 INFORMATION
REQUIREMENTS
0 A list of departments or work centers to be arranged, their
approximate dimensions, and the dimensions of the
building or buildings that will house the departments.
0 A projection of future work flows between the various
work centers.
0 The distance between locations and the cost per unit of
distance to move loads between locations.
0 The amount of money to be invested in the layout.
0 A list of any special considerations (e.g., operations that
must be close to each other or operations that must be
separated).
0 The location of key utilities, access and exit points,
loading docks, and so on, in existing buildings.
MINIMIZING TRANSPORTATION
COSTS OR DISTANCES
0 The most common goals in designing process
layouts are minimization of transportation costs or
distances traveled. In such cases, it can be very
helpful to summarize the necessary data in from-to
charts and indicates the distance between each of
the locations, and actual or projected work flow
between each pair.
 CLOSENESS RATINGS
0 Although the preceding approach is widely used, it suffers from the
limitation of focusing on only one objective, and many situations involve
multiple criteria. Richard Muther developed a more general approach to
the problem, which allows for subjective input from analysis or managers
to indicate the relative importance of each combination of department
pairs that information is then summarized in a grid.
0 Muther suggests the following list:
1. They use same equipment or facilities.
2. They share the same personnel or records.
3. Required sequence of work flow.
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 KEY POINTS
0 Process choice is demand driven.
0 Process type and layout are a function of expected
demand volume and the degree of customization
that will be needed.
0 Each process type and layout has advantages and
limitations that should be clearly understood when
making process selection and layout decisions.
0 Process design is critical in a product-focused
system, whereas managing is critical in a process
focused system.