BATANGAS STATE UNIVERSITY

College of Accountancy, Business Economics and International Hospitality Management

GRADUATE SCHOOL

OPERATIONS/PRODUCTION MANAGEMENT

Narrative Report on the Topic

LAYOUT DESIGN: DESIGNING PRODUCT AND PROCESS LAYOUTS
Marini Joy M. Doria

INTRODUCTION

Designing product and process layouts are important since the success and failure
of these contributes to the efficiency of the production of a company. The sequencing of
each process in making a product is significant as well as the location of each work
station. In this report, we are going to dig deeper on the role of layout design in the
performance of the company and how the organization can take advantage of this through
proper management and scheduling.

OBJECTIVES

1. To be able to know how to design product and process layouts in accordance to

the economic goal of the company.
2. To learn the importance of designing product and process layouts.
3. To know how to balance assembly lines.
4. To understand and apply techniques in process layouts.

DISCUSSION

Designing Product Layouts

The goal of a product layout is to arrange workers or machines in the sequence

that operations need to be performed. Such sequence is known as assembly lines which
may range from fairly short, with just a few operations, to long lines that have large
number of operations. Automobile assembly lines are examples of long lines.
Design is a critical issue because it is difficult and costly to change a product
layout that is inefficient. Many of the benefits of a product layout relate to the ability to
divide required work into a series of elemental tasks that can be performed quickly and
routinely by low-skilled workers or specialized equipment.

Line Balancing

This is the process of assigning tasks to workstations in such a way that the
workstations have approximately equal time requirements. This minimizes the idle time
along the line and results in a high utilization of labor and equipment. Idle time occurs if

P a g e 1 | 11
 BATANGAS STATE UNIVERSITY
College of Accountancy, Business Economics and International Hospitality Management
GRADUATE SCHOOL

the task times are not equal among workstation, some stations are producing at higher
rates than others.
Unbalanced lines are undesirable in terms of inefficient utilization of labor and
equipment and because they may create morale problems at the slower stations for
workers who must work continuously, while balanced lines will have a smooth flow of
work activities along the line which are synchronized to achieve maximum utilization of
labor and equipment.

Deciding the Number of Workstations

The primary determinant of how many stations shall we choose is the cycle time.
Cycle 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.
Example: Suppose that the work required to fabricate a certain product can be divided up
into five elemental tasks, with the tasks times and precedence relationships shown in the
following diagram.

The minimum cycle time is the longest task time while the maximum cycle time is
the sum of all the task times. In this example, the minimum cycle time is 1 minute while
the maximum cycle time is 2. 5 minutes. The minimum and maximum cycle times are
important because they establish the potential range of output for the line, which can be
computed as:

Output rate = Operating time per day/Cycle time

If the line will operate 8 hours a day or 480 minutes, and cycle time of 1 minute:

480 min/day / 1 min/unit = 480 units per day

If the cycle time is 2.5 min/unit = 192 units per day

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.
Cycle time = Operating time/day / desired output rate
Assuming output rate is 480 units…
The cycle time shall be 1 minute per unit.

P a g e 2 | 11
 BATANGAS STATE UNIVERSITY
College of Accountancy, Business Economics and International Hospitality Management
GRADUATE SCHOOL

We can determine the theoretical minimum number of stations necessary to provide a

specified rate of output as follows:

Suppose the desired rate of output is the maximum 480 units per day (cycle time of 1
min),

Minimum No. of station = 2.5 mins/unit/1 min. per station

= 2. 5 stations rounded off to 3 stations

Guidelines in Line Balancing

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. The eligible tasks are checked to see which of them in
the workstation being loaded. A heuristic is used to select one of the tasks that will fit.
This process is repeated until there are no eligible tasks that will fit. The next workstation
can be loaded. This continues until all tasks are assigned. The objective is to minimize
the idle time for the line subject to technological and output constraints.
Technological constraints can result from precedence or ordering relationships
among the tasks. The precedence relationships require that certain tasks must be
performed before others. Technological constraints may also result from two tasks being
incompatible. Output constraints determine the maximum amount of work that a
manager can assign to each workstation, and these determine whether an eligible task will
fit a workstation.
The desired output rate determines the cycle time and the sum of the task times
assigned to any workstation must not exceed the cycle time. Once it is known which tasks
are eligible and will fit, the manager can select the task to be assigned. This is where the
heuristic rules help us decide which task to assign from among those that are eligible and
will fit. 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.

Steps in Line Balancing

1. Draw a precedence diagram

2. Find cycle time
3. Find NT (Theoretical Minimum Number of Work Stations
NT = SUM OF TASK TIMES (T)
CYCLE TIME (C)

P a g e 3 | 11
 BATANGAS STATE UNIVERSITY
College of Accountancy, Business Economics and International Hospitality Management
GRADUATE SCHOOL

4. Select and use assignment heuristic.

a. THE LARGEST OPERATION TIME (Assign tasks in the order of longest
operation time first)
b. THE LARGEST NUMBER OF FOLLOWING TASKS (Assign tasks in the
order of largest number of following tasks)
5. Determine efficiencies
6. Rebalance (if desired and necessary)
7.
EXAMPLE: Line Balancing
288 units of a product must be made in an 8-hour shift. Use the longer operations time
heuristic to develop a plan for assembly line.

1. Draw a precedence diagram according to the immediate predecessors in the given

example.

P a g e 4 | 11
 BATANGAS STATE UNIVERSITY
College of Accountancy, Business Economics and International Hospitality Management
GRADUATE SCHOOL

2. Find cycle time.

CYCLE TIME = TIME AVAILABLE/UNITS TO BE MADE
Since task times are in seconds, cycle time must also be in seconds
8 hours = 28,880 seconds
28,880 seconds/288 units =
100 sec (This is the cycle time)
3. Find NT (Theoretical Minimum Number of Work Stations

MINIMUM NO. STATIONS NEEDED

• Cycle time = 100 seconds
• Just one person will require 390 seconds (summation of all task time)
NT = SUM OF TASK TIMES (T)
CYCLE TIME (C)
390 seconds/100 seconds = 3.9 rounded to 4 stations

4. Select and use assignment heuristic.

c. THE LARGEST OPERATION TIME (Assign tasks in the order of longest

operation time first)
d. THE LARGEST NUMBER OF FOLLOWING TASKS (Assign tasks in the
order of largest number of following tasks)
In this example, we are going to use the longest operation time heuristic.

1. Find the task with the longest time, which is A (90 seconds) where we still have
10 seconds left , option for task ready is B (30 seconds) and C (70 seconds),
however, both of them are over 10 sec so this time will be wasted and we’ll
proceed with Station 2.

P a g e 5 | 11
 BATANGAS STATE UNIVERSITY
College of Accountancy, Business Economics and International Hospitality Management
GRADUATE SCHOOL

2. C has a longer time than B, so we will put it at Station 2. There is a remaining 30

seconds and tasks ready are B, F, and G. We’ll choose B, since F (60 seconds)
and G is 50 seconds. So the tasks ready would be D,F,G.
3. In D, G and F, the longest task time is F, so allocate F. Tasks ready are D and G.
Since the remaining time is 40 seconds, let us allocate D which is 10 seconds with
time remaining turns to 30 seconds. Tasks ready are E, G. Then, lets allocate E
since G is over 30 seconds.
4. Let’s allocate G, with 50 seconds and the remaining 50 seconds will be for H.
Finishing the assembly line.

Other Approaches

Parallel workstations is one approach used by companies. These are beneficial for
bottleneck operations which would otherwise disrupt the flow of product as it moves
down the line. Parallel workstations increase the work flow and provide flexibility.

Designing Process Layouts

This is a process where we allocate business units, departments or machines to the

right location within a facility so that either we can minimize overall costs,
transportation, distance or satisfying the required closeness rating. The main issue in
designing process layouts concerns the relative positioning of the departments involved.
For example, some departments may benefit from adjacent locations whereas others
should be separated. 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.
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. A major obstacle to finding the most efficient layout of departments is the
large number of possible assignments. Unfortunately, no algorithms exist to identify the
best layout arrangement under all circumstances. Often, planners must rely on heuristic
rules and trial and error to come to a solution.
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. 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 in Designing Process Layouts

1. A list of departments or work centers to be arranged, their approximate

dimensions, and the dimensions of the buildings that will house the departments.
2. A projection of future work flow between the various work centers.

P a g e 6 | 11
 BATANGAS STATE UNIVERSITY
College of Accountancy, Business Economics and International Hospitality Management
GRADUATE SCHOOL

3. The distance between locations and the cost per unit of distance to move loads
between locations.
4. The amount of money to be invested in the layout.
5. A list of any special considerations. (operations that must be close to each other or
operations that must be separated)
6. The location of key utilities, access and exit points, loading docks, and so on, in
existing buildings.

Minimizing Transportation Costs or Distances

Example:

Assign business units to the available places, so the total transportation costs or the
distances will be minimum using heuristics with the greatest interdepartmental work flow
first to locations that are closest to each other.

B 30
20

40
A C

In this illustration, we have three departments 1, 2 and 3 and three stations, A, B and
C. We can also see the distance between stations and the corresponding workflow.

From this listing, you can see that departments 1 and 3 have the highest
interdepartmental work flow, and that locations A and B are the closest. Thus, it is
reasonable to consider assigning 1 and 3 to locations A and B although it is not known
which department should be assigned to which location. The total distance traveled is the
product of the distance and the corresponding workflow, that is the total transportation
distance is 3,400 which is the lowest travel distance. Then, pick the next heaviest

P a g e 7 | 11
 BATANGAS STATE UNIVERSITY
College of Accountancy, Business Economics and International Hospitality Management
GRADUATE SCHOOL

workflow, which is 2 and 3 and the next shortest distance which is B and C. After
assigning 2 and 3, we will now know which department shall be assigned in each
location. As we can see, we can know that department 3 should be allocated at location
B, because if department 3 is located at location A, it cannot satisfy the 2 nd condition
which means that 2 and 3 should be located at B and C. With that, we can arrive on the
following answers:
• Department (1,3) should be located at (A., B)
• Department (2,3) should be located at (B, C)
• Department 3 should be at B
• Department 1 should be at A
• Department 2 should be at C

Closeness Ratings

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.

Read the grid in the same way as you read a mileage chart on the road map, except
that letters rather than distances appear at the intersections. The letters represent the
importance of closeness for each department pair.

P a g e 8 | 11
 BATANGAS STATE UNIVERSITY
College of Accountancy, Business Economics and International Hospitality Management
GRADUATE SCHOOL

In practice, the letters on the grid are often accompanied by numbers that indicate the
reason for each assignment; they are omitted to simply the illustration. Muther suggest
the following list:
1. They use same equipment of facilities.
2. They share the same personnel or records.
3. Required sequence of work flow.
4. Needed for ease of communication.
5. Would create unsafe or unpleasant conditions.
6. Similar work is performed.

Example:

Assign the following six departments to a 2 X 3 set of locations using the heuristic rule:
Assign critical departments first, because they are the most important.

We will refer to the closeness ratings table. Then, we need to identify the critical
pairs of departments, which are A and X Links.

With this table, we can now construct the basic relationship chart. Starting from
the A Link table, we need to identify the department that is most involved in all A links

P a g e 9 | 11
 BATANGAS STATE UNIVERSITY
College of Accountancy, Business Economics and International Hospitality Management
GRADUATE SCHOOL

which is 6. This tells us that 6 has the highest requirement to be located at the center of
the locations. So we start from 6, which 2, 4 and 5 shall be allocated close to it. Then we
fill up the chart with the rest of the A links then construct the X links.

From the chart, we can see that 1 and 3 should be far from 2 and 6. Remembering
the 2 X 3 locations, we can know that we should put 1 and 3 and 4 and 6 at the other end
of the locations and fill the remaining with 2 and 5 according to the closeness to each
location.

Therefore this would be the final location:

P a g e 10 | 11
 BATANGAS STATE UNIVERSITY
College of Accountancy, Business Economics and International Hospitality Management
GRADUATE SCHOOL

Key Points

 Process choice is demand driven

 Process type and layout are a function of expected demand volume and the degree
of customization that will be needed
 Each process type and layout type has advantages and limitations that should be
clearly understood when making process selection and layout decisions.
 Process design is crucial in a product-focused system, whereas managing is
critical in a process-focused system

REFERENCES

Stevenson, William J. (2012).Operations Management (12th ed., pp. 262-276).McGraw

Hill.

P a g e 11 | 11