Unit II - Product Design and Process Selection

PRODUCT DESIGN
Meaning and Definition of Product Design
Product selection is the process of selecting the goods and services for the purpose of offering them to the
customers. The process has been examined by cognitive engineers and marketing researchers for a long
time.

Design is the process which involves the transformation of knowledge and needs into a form which is
appropriate and expedient for manufacturing. The inputs are used for making outputs which satisfy the
customer's requirements.

Characteristics of a Good Product Design

1) Functionality: The product should be able to perform as per the requirements.

2) Reliability: The product should work properly for a minimum specified period of time.
3) Productivity: The product should be produced at a pre-defined cost for a specified quality and quantity.
4) Quality: The product should be able to meet consumers' requirements, whether explicit or implicit.
5) Standardisation: The product should be amenable to be manufactured using parts which are
standardised and consumers should not have any difficulty to find them.
6) Maintainability: The product must be able to perform for a specified period of time without requiring
extra maintenance. Provision for maintenance should also be made.
7) Safety: The product should not pose any threat to the safety of its users and others.
8) Cost Effectiveness: The product should be cost efficient and should be produced using cost feasible
techniques.

Objectives of Product Design

1) The main objective is to create unique looks for the product to increase its sales potential
2) To increase the utility of the product.
3) To make the product more efficient.
4) To maximise the quality while minimising the costs.

Types of Product Design Following are the types of product design:

1) Functional Design: This involves conversion of an idea into a concrete product. The process starts by
rendering a rough sketch so that required parts and shapes of the proposed products can be determined.
Individual parts are then rendered in their correct dimensions. These renderings are used for making
experimental models. These models should be properly tested to ensure that the product works as
intended and is durable.

2) Aesthetic Design: A product design needs to be refined before its commercial production starts. The
functional design is integrated with aesthetic design to increase the market acceptability potential of the
product. While functional designing is important, aesthetics are gaining prominence too.

3) Production Design: Conversion of functional design to production design is done to ease the process of
manufacturing. It also helps in controlling manufacturing costs without adversely affecting the
functionality of the product. The process looks into the possibility of changing the design to control the
costs without affecting the utility of the product. If there is any requirement for specialized tools, then
such requirement should be noted down.

4) Packing Design: The design should be attractive and easy to use. Different packing materials may be
used to ensure the safety of the product and its quality. The packing should be done using standardised
parts so as to minimise the cost of production. The product designer should also leave provision for
diversification and simplification of product.

Stages in Product Design Process

Stage 1: Analysing Market and Customers' Needs: The main aim of any production activity is to increase
the profit. Customers are the most important part of any business activity and in order to increase the
profitability, the customer must be satisfied which is possible only when the product is manufactured
according to their needs and market trends.
Stage 2: Planning: As product design helps in planning the approval and launch of the actual project
development process.
Stage 3: Concept Development: In this phase, the requirements of the target market are recognised,
different types of product concepts are made and analysis is done.
Stage 4: System-Level Design: The system-level design phase consists of the formation of the product
and its division into various subsystems and components.
Stage 5: Design Detail: In this phase it has the total knowledge about the geometry, materials and
allowance of the specific parts in the product and recognition of various standard parts to be bought from
the suppliers.
Stage 6: Testing and Refinement: In this phase, there is formation and analysis of different pre -
production materials as the type of production of product.
Stage7: Production Ramp-Up: In the last phase, the product is formulated by the help of planned
productionsystem.

Elements in Product Design

1) Research and Development: R&D department is responsible for carrying out the design of new
products. The main function of an R&D department is to advance the state of knowledge.
2) Reverse Engineering: This process entails putting the structure into pieces of an existing product to
understand its basic concept.
3) Manufacturability: This part implies that a product should be designed in such a way so that it can be
easily assembled or manufactured.
4) Standardisation: It refers to the process of reducing variation in the design of the product.
5) Modular Design: Modular design is another aspect of standardisation. It implies designing a product in
modules or parts, making it easier to assemble them into final products.
6) Robust Design: It implies that the design should be durable and able to work in different
circumstances.
7) Concurrent Engineering: This type of design approach involves the use of personnel from different
departments. This implies that the design team is likely to involve employees from various departments.
8) Computer Aided Design: It is a software which is helpful in rendering 3-D designs of a product. It uses
a computer for visualising the design from different angles.
9) Life Cycle of a Product: The main stages of life cycle of a product are incubation, growth, maturity,
saturation and decline
 The introduction stage sees low demand as the customers are not having knowledge of the
product.
 With increased knowledge and improved product demand start increasing in growth phase.
 Under maturity stage, the demand stabilises and product stops being attractive to the consumers
and reaches saturation phase,
 Finally leading to decline stage.
Following points illustrate the importance of product design:
1) Product design is critical as it determines the features, performance and functionality of the goods and
services.
2) Product design is important for reducing the cost of production and in dealing with competition.
3) Product design is important for increasing profits by improving packaging and design.
4) It is also essential for diversifying the portfolio by entering new product segments and markets.
5) It can be used for coordinating the activities of supply chain constituents.
6) Product design is important for dealing with competition in global markets.
7) Product design helps in determining the quality of the product.

Ethical Issues in Product Design

1) Impact of Product on Customer: The designers need to assess how safely and easily the products,
can be used by the end users.
2) Protection of Intellectual Property: Infringement of intellectual property rights is not looked upon
in go light.
3) Privacy: Designers need to make sure that products do not affect the privacy of customers and
other.
4) Exposure to the Undesirable: There are certain design which gives an unaccepted results,
information and capabilities.
5) Advertising of Designs: Companies need to make sure that advertisement of their products is not
racists or offensive.

Environmental Issues in Product Design

1) Global Warming: The various gases present in the atmosphere protect the earth from the heat of
sun.
2) Ozone Layer: The ozone layer is formed for protecting the earth from ultraviolent radiation of the
sun There are certain products which produce Chlorofluorocarbons (CFCs). So, the designers need
to design with the alternative of CFCs.
3) Tropical Deforestation: Deforestation is clearing of forest area for the purpose of putting it to non-
forest activity like industrialization.
4) Waste: Excessive waste or disposal of waste in unsafe manner adds to environmental issues.
Designers should adopt proper waste management techniques especially for materials that are
hazardous for environment.
5) Pollution: Product should be such that it does not increase any kind pollution like air, water, soil
pollution.
6) Resource Conservation: Natural resources especially non-renewable resources need to be
conserved tor sustainable development. The decisions which have the impact on the designers are
the nature of materials used, source of energy and lowering the need to consume.
Factors Affecting Product Design
1) Customer's Perspectives: The product should be redesigned to meet the demands of the consumers.

i) Functions: The product or the service should be as per the requirements of the consumer. Such
requirements may be classified as "needs'" and "wants".
ii) Aesthetics: The aesthetics of a product are represented by its external appearance. It is
important for of the consumers as well as for determining the price which may be gaining
consumer acceptance offered in the market.
iii) User Friendliness: The product should be intuitive so that the user does not face any difficulty
using it.
iv) Esteem Associated with Possession: There are two types of value attached to a product or
service. These are the use value and the esteem value. In order to retain its value in market, the
product or service should be able to service the basic requirements of customers.

2) Organisational Perspective: The value analysis for a product or service should pay attention to internal
factors of products and services.

i) Intrinsic Cost of Material: The main purpose of value analysis is to minimise the material cost
by reducing wastage and improper use of materials.
ii) Intrinsic Cost of Labour: Labour is also an important factor as it is related to the quality of the
product and efficiency, Labour cost and productivity may be properly managed by using
various managerial techniques such as work study, time study, method study, motion study
and work measurement, etc.
iii) Replacement, Exchange and Disposal: The cost of replacing or removing machines, materials,
labouron account of redesigning of the product is an important part of the value analysis.

PROCESS SELECTION
Process selection involves deciding the way goods or services are produced by an organisation. This is
done by properly analysing the availability of technology facilities layout and the capacity of production.
An important Step in production and operations management systems is process selection. It helps an
organization in creating the safe and consistent product by using innovative design and proper capacity
planning. Process selection can help in proper understanding of different processes including manual and
automatic ones.
Process Selection Decision
1) Process by Market Orientation: Following are the main four market orientations:
 Make to Stock (MTS): Such process is used for goods which are standard in their specification. Make
to stock products include garments, shoes, food items, etc.
 Assemble to Order (ATO): Assembly to Order' products are also standard items and are assembled
using sub-parts kept in stock. For example, a computer shop may set up a desktop using various pus
such as keyboard, CPU, etc. to match the given specifications.
 Make to Order (MTO): Such products are made using previously engineered designs. This is generally
done for products which have erratic demand or are of high value, making it prohibitive to keep them
in stock. For example, commercial airplanes.
 Engineer to Order (ETO): This is used for products which are unique and may not have been produced
before. Such products generally call for high level of customization. For example, furniture made by
carpenter.
2) Processes as Production Systems: A production system is the way an organization designs the flow of
material. It involves the use of different process technologies. Following are five main classes of
production systems:
 Project
 Job Shop
 Batch Production
 Assembly Line
 Continuous Flow
3) Processes and Customer Involvement: Processes are designed to maximize the value of the finished
goods provided to the buyers. There are different degrees to which a customer may be involved in the
process as shown below:

i) Self Service: Self service means that consumers may walk around in the store to pick what they want.
This is the departure from earlier practice where customers used to give their requirements to the shop
manager and get the goods.
ii) Product Selection: there is a new trend to involve customers in the process of product design offering
them different options. This type of customization provides higher purchase satisfaction to the clients.
The main example in this regards is automobile companies which let their customers select different
variables such as colour of their vehicle, the brake type, the window system, etc. Such gestures help the
companies in generating goodwill and increasing the demand of their products.
iii) Partnership: This refers to remaining in touch with the clients. Such interactions may be facilitated by
the use of several technological measures.

Factors in Process Selection

1) The number of components to be made.

2) The component size.
3) The component weight.
4) The precision required.
5) The surface finish and appearance required,

All these factors need to be considered at the material assessment stage. The focus at this stage is on
Processability and Manufacturability.
Process selection greatly impacts the quality of the product or the service. It should be ensured that the
process is suitable for the material involved in the process. In cognizance with the technical factors, the
stress should also be put on the economic factors. It is important that the costs do not overrun the
budgeted ones. Other factors such as economic batch size and the production rate should also be taken
care of.

Stages in Process Selection Method

Stage 1: Drawing Interpretation: Such interpretations may be analysedin three different stages which are
as follows:
The first stage is geometry analysis stages. This stage allows for the identification of different candidates
which meets the requirements ofstated complex shape. The size of the part should also be considered
while taking this decision.
The Second part involves manufacturing information in the design documents. The information involves
dimensional tolerance, geometric tolerance, surface finish, various limits and gauge references.
The third and final analysis is related to the assessment. It involves the consideration of material on basis
or the required geometry. It also considers the desired properties of the material and processes.

Stage 2: Critical Processing Factors: The results from the first stage are used for identifying the critic
processing factors. This is especially important for the outputs of geometry analysis and the material
assessment. These two processes help in determining the limits within which all the planning needs to be
made
Stage 3: Consult Process Tables: The most important tool used for the purpose of correlating the data
from the previous stage is a process selection table. This stage helps in determining the process to be
used. If there more than one process which is optimal then economic data such as various costs related to
material and labour batch size and production capacity should be considered for deciding on the best
process. In many cases, the decisions regarding make or buy situation also need to be made. It is
important to use costing information at the earliest possible opportunity in the process.
Stage 4: Identifying a Process: If the data is used for arriving at a decision, the process is complete.
However in many cases, the procedure may be required to be repeated in order to reach a conclusion. If
the product needs further processing then critical factors should be considered and stage third should be
repeated.

VALUE ANALYSIS

In a value investigation, value is known as an economic value which is classified into four kinds like cost
value, exchange value, use value and esteem value.

It is defined as, "Value analysis is an organized procedure for efficient identification of unnecessary cost".

The Value Analysis (VA) and Value Engineering (VE) is same. They can be used in place of each other.
Earlier, VE was also used for defining design stage while VA for the present product. Value engineering
is related to the proper collection and optimum use of materials.

Objectives of Value Analysis

i) Maintain the Functional Objectives of an Item: The value analysis help in the formulation of functional
objective The value analysis helps the functional objective of an item at the required level. The function
determines the importance of the product or the use of the product. The three functions of product are as
follows:
a) Primary Function: The primary function of value analysis is to save it from dirt, cracks, scratches.
damage, etc.
b) Secondary Function: The secondary function is to make easy identification of the product to the
customers.
c) Tertiary Function: The tertiary function is to provide a better presentation of the product which is
required by the customers. For example, packaging of juice in tetra packs.

2) Cost Reduction: The basic objective of value analysis is cost reduction which helps in saving money
and increasing profit. This helps in providing benefit to both the organisation and society or country.

3) Value of Time: The value analysis takes into account the time value. The value of an item can only be
determined when it is present on the required time or date. It will have no value if it is not present at the
required time. The product may be needed for the short term use only than it is not necessary to use
costlier materials. So, for this the value analysis determines the cheaper alternative method.

4) Quality Promotions: The value analysis helps in promoting the quality. The continuous failure or
rejection leads to the analysis of the quality. The value analysis helps in maximising the productivity,
competitiveness, serviceability, better marketability and in export promotion which leads to lowering the
rejections and promotion of quality.

5) Standardization: The engineering industries which are going globalised will increase the
standardisation of materials, processes and procedure for manufacturing the reasonable and quality
product. The standardisation can be attained by process improvement, producing quality awareness, work
simplification, technology upgradation, etc.

Importance/Utility of Value Analysis

1) Lowering Cost: Value analysis is an important method used for lowering down the cost. As the main
objective of value analysis is to reduce the irrelevant cost of the products or services. It also helps in the
effective elimination of the costs without changing the quality and efficiency.
2) Use of Scientific Method: The value analysis is a scientific method which helps in maximising the
productivity of the business as it helps in finding various alternatives for the optimum use of resources in
giving the quality product with the minimum cost the production of goods and services. It also helps
involved.
3) Keep Management Update: The importance of value analysis helps in providing various kind of
information to the management. This information can be the recent development in technology. The value
chain analysis helps in analysing various methods and techniques used for lowering down the cost and
increasing the value of the product.
4) Use of Resources: The value analysis helps in effective utilisation of resources as it helps in
minimising the unwanted costs.
5) Creative Ability: It helps in enchasing the creative ability of the employees for estimating the
unwanted costs. It helps in framing new plans in which least cost is involved for doing same work.
6) Friendly Environment: The value analysis helps in creating friendly environment for maximising the
productivity as it work in finding the ways to increase the productivity.
7) Import Substitution: The value analysis helps in the import substitution as it helps in finding the new
ways for manufacturing indigenous goods which may act in the same way as the imported goods, It
provides assistance for saving foreign exchange currency.
8) Applicable to All Stages: The value analysis is applied to all the stages, starting from the production
stage to final stage of the product which is packing and dispatching. It helps in finding the irrelevant costs
for all the stages and also help in reducing them.

Limitations of Value Analysis

1) Time Consuming and Expensive: Value analyses are used only in certain way because of it expensive
and time consuming nature.
2) Worked on Scientific Theory: The value analysis does not work on the specific scientific theoretical
development. It is being used by various users which are present in the assembly lines of factories or the
operations in a production process.
3) Difficult Rules and Regulation: The value analysis follows very difficult rules and regulations in
recording data, generation and selection of any plan. The merits of value analysis cannot be attained
because of improper use of methods.
4) Required Specialised Knowledge: Value analysis requires the advice and time from the senior
executives which have knowledge in a particular area. The experts need to have knowledge about various
subjects and should have experience and experts in the subject.

Meaning and Definition of Facility/Plant Location

The decision for the plant location depends upon availability of uninterrupted raw material and labour,
efficient utilisation of the production capacity plant layout, and the cost of the production.

According to Bethel Smith and Alwater, "Facility location stands for that spot where in consideration of
business as a whole, the total cost of production and delivering goods to all the consumers is the lowest".

The factory location has the following characteristics:

1) The success of business is depends upon the appropriate location of the plant. Earlier, it was not
significant to decide about the plant location and it's totally depends upon the priority of owner of the
business and practices prevailing in the society. Many of these organisations failed because of the wrong
decisions taken in respect of plant location. If proper care was taken, it is possible that they may have
success.
2) Government is taking various decisions to make overall development in the country. In order to
encourage industrial development, it has provides subsidies, tax rebates and various other assistance to
those industrialists, whose factories are located in undeveloped areas or located in specific area decided
by the government.
3) The nature and size of the business are the other important determinant in selecting the plant location.
While in many cases, the nature of product is also considered for selecting an appropriate location. For
example, the organisation requiring unskilled workforce may locate its plant at undeveloped area and the
organisation requiring skilled workforce may locate its plant at metropolitan city.

4) In small scale industry, the plant location is decided on the basis of demand for the product and it can
move to other place, if the need arises. But for large scale industry, it is not possible to move the plant to
other place because it is costly procedure. The decision for locating the plant for large scale industry must
be taken with proper care.

Need for Selection of Location

1) Selecting a Location for the First Time for New Organisations: When selecting a plant location for a
newly established organisation, the cost factor needs to be considered. One should consider that the
business is going to operate for indefinitely long period of time. Layout should be made after considering
the present and the future requirements:

i) Identification of Region: Some key factors like availability of technology, marketing, internal
management, regional resources availability, social and legal environment, geographical positioning,
operating facilities, etc., influences the decision about the location.

ii) Choosing a Site in a Region: After the region has been duly selected, the next step is the identification
of the site within that particular region. Selection of the site is remotely related with the long-term
strategy of the organisation. Various alternate sites may be considered and evaluated in terms of both
tangible as well as intangible costs. This problem of site selection can be best answered by adopting cost
oriented non-interactive model, also popularly termed as the dimensional analysis.

iii) Dimensional Analysis: It would be better and easy if the costs can be quantified and were tangible in
nature. The answer would have been straightforward and the location having minimum cost would have
automatically been selected. In majority of cases, intangible costs expressed in relative terms over the
absolute terms are considered. The benefits and the limitations could have also been compared easily.

2) Selecting Location for an Existing Organisations: Here an existing set-up requires multiple plant
locations or wishes to shift from the existing location to extract economies to scale. The new location may
dwell within the existing location itself or may require a distinct location. The following factors are
considered in this case:

i) Plant Manufacturing Different Products: Ideally a plant should be able to cater the requirement of the
total market of the organisation. This strategy holds the key while satisfying the technological and other
needs for the alternate product lines and channels.

ii) Manufacturing Plants Supplying to a Specific Market Area: In this case, every plant of the company
manufactures all the products that the company deals in. However, the set-up requires a very high degree
of co-ordination between the corporate office and the manufacturing unit. The same is best experienced in
the case of bottling plants of the soft drinks.

iii) Plants Divided on the Basis of the Process or Stages in Manufacturing: Sometimes the product may
pass through several stages before final completion and all the stages or processes may not even be
completed in one plant set-up i.e. different processes are carried out in different plant layouts. Such may
be made to factors like availability of the equipment, labour, technology or even the management's
policies, Since the output of one plant is the input for the other plant, extreme co-ordination is required in
this case and the control by the head office should also be exercised.
iy) Plants Emphasising Flexibility: The layout demands co-ordination among various plants to cater to the
change in the requirement while managing the usage of various resources and the facilities. If regular
changes are made in the long-term strategies of the company, the same may not be a healthy sign for an
organisation. While finalising a particular location for a plant its long-term sustainability and ability to
incorporate the change in the requirement should be judged before hand.

3) Case of Global Location: Since the inception of globalisation, many multi-national companies have
opened their units in India and similarly Indian companies have also established their units in foreign
countries. In such circumstances, there is:

i) Virtual Proximity: The advancement that is made in the telecommunication sector has brought the
concept of virtual proximity into the picture. In firms that are into the line of providing the software
services, majority of work takes place only through this route. High end communicating devices are used
to share the information through long distances. The cost and the time involved in the logistics have
certainly reduced and these are also considerable factors in finalising the location. The market reach has
increased and thus there is also increase in the customer base.

ii) Virtual Factory: Especially in U.S.A. and U.K. majority of the large-sized service or the manufacturing
units outsource a part of their work to locations like India, where the technology and the labour force is
available and the work can be carried out at a lesser cost. Thus, investing and developing own operations
are substituted by utilising the facilities of others by paying a nominal cost. The outsourcing firm in India,
procuring orders from outside is termed as the virtual service factory of the foreign- based unit.

Advantages of Facility Location

Selecting a facility location is a strategic decision that is to be made by an organisation. A number of

factors have to be taken into consideration while fixing the facility location:

1) Fixation of the Production Technology and the Cost Structures: Issues relating to the production
technology and the cost structures are answered once the location is finalised. For example, if the site is
established in an underdeveloped economy, then the project is bound to be labour intensive and the
majority of processes are to be carried-out in manual form and the costs associated will also be less.
2) Determine Nearness of Location from the Market: Location of the plant also depends on the size and
structure of the market. A small organisation where the requirement in terms of land and capital is less,
the location that is close to the market is preferred. On the contrary, large firms put their operations
basically in the out part of the city
3) Better Service to the Customers: Location of the plant also affects the ability of the company to
provide timely and uninterrupted service to the customers. For example, location of a transport company
should be close to the highway with connectivity lines to the main city to provide uninterrupted supply of
the material.
4) Withstand Competition: Considering the competitive aspect, the decision as to the location of the plant
also holds a significance. For this purpose, the location that brings reduction in the transportation cost,
reduces the labour cost and brings economies to scale is preferred.
5) Select the Best Location: After considering the different alternatives for the location, the geographic
location that comes up with the maximum facilities at a lower cost is selected. Emphasis is given on the
productivity, costs, customer service and number of other varied issues. In case, error in selection of
location happens, it results in shut down or shifting the location.

Disadvantages of Facility Location

The decision regarding the 'plant location' is not an easy task. Before deciding the area of location
following disadvantages can be taken into consideration:

1) In Urban Areas
i) The cost involved in purchasing a land is high, as compared to the rural areas.
ii) Due to less availability of the land, the expansion of business operations is not possible.
ii) The standard of living in the urban areas is high which results in high labour cost.
iv) The trade union activities are very active that may result in strike and lockouts.
v) The relation between the management and employees is influenced through the union activities.
vi) There are restrictions on office building or on plants working by the Municipal and other authority.
vii) The labour turnover ratio is high as the employees in these areas leave the organisation very
frequently.

2) In Rural Areas

i) Rural areas do not have proper transportation facilities that sometimes lead to delay in providing the
product on time.
ii) These areas lack proper communication networks.
iii) The resources which are not available, obtained from the outside sources which increases the cost of
the production.
iv) The markets are far away to send products to the market; the involved transportation cost may
increases the price of the product.
v) The employees working in the organisation are from village itself and may involve in agricultural
activities. At the time of harvesting seasons, they collectively take leaves which affect the productivity in
negative way.
vi) Rural areas have less amenities like education, medical facilities etc.

3) In Suburban Areas

i) Suburban areas are developing gradually and after sometime they become as like the urban areas.
ii) These are developing areas, hence the employees has high tendency to migrate that may results in high
labour turnover.
iii)The government is providing subsidies and incentives to stimulate development in industries.

Meaning and Definition of Facility/Plant Layout

Plant layout is the arrangement and location of production machinery, work centers and auxiliary
facilities and activities (Expectation, handling of material storage and shipping) for the purpose of
achieving efficiency in manufacturing products or supplying consumer services

The characteristics of 'facility layout' can be discussed as under:

1) It refers to the positioning of the factors of production like plant, machinery, material, human resource
etc. in an organisation or at factory.
2) It starts with designing the building of a factory and continues to the selection of location and the
movement of work.
3) It involves the new layout for the organisation and all sort of improvements in it are also mentioned.
4) It involves the decision regarding the space required and the space is utilised in such a manner that the
functioning of the process is performed with minimum cost.
5) It involves proper arrangement of material handling, storage of work in progress, storage of scraps and
storage of tools and fixtures at the work area.
6) Facility layout helps in proper flow of the materials that increases the productivity and morale of the
employees.

The basic objective of having plant layout in a manufacturing unit is to cut the cost of production and
bring it to the minimum possible level.
Objectives of Facility Layout

1) Handling and transportation of materials are facilitated, which leads to handling of such materials in a
cost effective manner.
2) Available floor space is put to use in the most optimal way.
3) Various resources, viz. plants, machineries, equipment and even the human resources are utilised
economically.
4) As the production activity is smoothened due to reduction in delays and other hurdles to a great extent,
the work in process (WIP) inventory remains at the minimum level. The final outcome is maximum
inventory turnover.
5) The entire process of production may be planned and monitored efficiently.
6) Manpower involved in production process develops high moral because of the security and facilities
made available to them under a good plant layout.
7) It provides service centres in abundance at appropriate locations.

Types of Facility Layout Facility/plant layouts have been categorised into following types:
 Product Layout
 Process Layout
 Fixed Position Layout
 Flexible Manufacturing System
 Cellular Manufacturing Layout
 Hybrid or Combined

Product Layout
Product Layout is also referred to as 'Straight Line Layout', Line Processing Layout', 'Flow Line Layout',
a "Layout for Serialised Manufacture'. This type of layout provides arrangement of equipment in an order
the represent their sequential role in the process of production.

Advantages of Product Layout

1) Regulation of Production: Regulation of the production process is an inherent feature of the product
layout. The entire exercise of production is carried out according to a planned sequence. and each
involved therein may be monitored and controlled, wherever required.

2) Scientific Materials Handling: Under the product layout, materials are handled in a cost-effective
manner through the use of modern scientific devices like roller, conveyors, monorails, chutes, etc.

3) No Bottleneck in Production: No scope is left for any bottleneck in a well-thought sequential plant line
Phenomena like back-tracking, interruption in product flow and other forms of obstacles in work flow can
be totally wiped out through the techniques like balancing of equipment, operations handling and workers
assignments.

4) Speedier Production: As the entire process of production - right from the receipt of raw materials to the
shipment of finished goods - takes place through a system of shortened built-in sequence of the plant
complex, the total time taken is very short. The level of working capital (in the form of raw materials,
work in process and finished goods) is kept at the lowest one.

5) Lesser Supervision: A pre-decided sequence of various stages of production requires less supervision
or inspection. A limited inspection is undertaken at the points of critical situation is considered.
Disadvantages of Product Layout
1) Heavy Capital Expenditure: Under the product layout, capital investment for acquiring machines and
equipment is of a rather high order. Further, the provision to have special facilities and sustain the serially
ordered operations in place also needs huge investment.

2) High Overhead Charges: The overhead charges, under the product layout, are also high, in proportion
to the heavy investment. If due to any reason, there is a reduction in the demand of the product, the fixed
overhead cost becomes a burden on the face of overcapitalised equipment and underutilised capacity
thereof.

3) Breakdown: A breakdown in any of the machines (or processes) arranged in a sequential order may
bring the entire process to a standstill; all the machines and manpower in the queue subsequent to broken
machinery would be compelled to stay inactive till the time the broken machine is brought to normal
working condition.

4) Inflexibility: Under the product layout, all the machines and men have specialisation for performing
certain kind of job. Performance of neither the machines nor the men is interchangeable (lack of
flexibility).
5) Additional Output not Possible: Under the product layout, manufacturing capacity of the entire setup is
limited. Reduction in such capacity is possible only at a cost, but to enhance the capacity with a view to
meeting an increase in demand of the product, is just not possible.

Process Layout

Process Layout is also referred to as Functional Layout' or 'Job Shop Layout'. This type of layout is
characterised by the following:

1) The grouping of machines and services is done on the basis of their functions; and
2) Areas are set aside for the operations of the same kind.

Departments are created on functional premise, i.e. one type of function is carried out in one department
and another type of function is carried out by another department.

Advantages of Process Layout

1) Lower Capital investment: No heavy capital investment is required under the process layout. In the
absence of any prescribed sequential order for various operations, a lot of flexibility is available with
regard to the quantity and variety of products manufactured, using the same general machines/equipment.

2) Greater Flexibility: Machines are not specialised: they are general machines, which can undertake a
variety of operations. Irrespective of the level of production, whether high or low, the same layout may be
used without causing much disturbance to the departmental set-up.

3) Specialisation: The departments are created on the basis of functional performance; each department
and its personnel are considered having specialisation in their own area. The full potential of their skill is
put to use.
4) Effective Supervision: As each supervisor is responsible for the supervision of a limited number of
operations in the department, the exercise of supervision is quite effective. His/her supervisory skills
attain maturity with the passage of time.
5) Lower Overhead Costs: Overhead costs in the process layout are low due to the following:
i) Low initial capital investment decreases the risk levels; and
ii) Flexibility in production equipment ensures less obsolescence due to fluctuations in the market
demand of a product.
Disadvantages of Process Layout

1) Complexity of Production Planning and Control: Under the process layout, in the absence of a system
of sequential order of production process, routing and scheduling becomes unmanageable and exhaustive.
The entire production process is divided into fragmented functions to be carried out by various
departments.

2) Frequency of Inspection: Under the process layout, every individual department is assigned a
specialised job, for which it is responsible. Output of one department becomes the input for another
department.

3) Difficulty of Materials Handling: The level of material handling is higher under the process layout due
to the simple reason that materials are required to be moved from one department to another and many a
time longer distances are covered.

4) Greater Floor Area: Floor space requirement under the process layout is more as compared to the
requirement under the product layout. Besides various departments, a lot of space is needed for setting up
miscellaneous utilities for purposes like temporary storage, provisions for aisles, inspection cribs service
facilities, etc.

5) Wasteful Backtracking: Process layout essentially analyse a large number of operations taking place in
various departments. Keeping a mark of all the ongoing operations, therefore, becomes unavoidable This
is an additional job, which besides being unproductive, results in increased overhead cost, but is required
to be undertaken.

Fixed Position Layout

Under the fixed position layout, manufacturing the most important product is stable or fixed at one place.
That location is the focal point of all the activities; all the machineries, equipment, tools, components,
labour, etc. are brought to that site. Such an arrangement (bringing men and machinery to the place of
manufacturing site of the key product) is logical in view of the fact that between the option of moving the
key product of enormous size and moving the men and machine to the site of production, the latter is
convenient. This kind of layout is most suited to the manufacturers of heavy engineering goods like ships,
generators, wagons, aircrafts, etc. For a small scale industry, it is not considered appropriate.

Advantages of Fixed Position Layout

1) Substantial time and money are saved, as the site of manufacturing the key product is permanent and
there is no movement of machineries and men from one location to another.
2) The job design and the sequence of working activity are easily changeable, giving a lot of elasticity to
the layout.
3) It is possible to accomplish a number of orders at various stages concurrently, which makes the layout
cost effective.
4) Due to flexibility in the order of operations, it is easy to carry out the necessary modifications to
overcome the shortage of men and materials.

Disadvantages of Fixed Position Layout

1) Huge funds are invested and the process of production is prolonged;
2) Cost associated with equipment handling is at a higher level;
3) A lot of space is needed for the storage of various equipments and material at the manufacturing site of
the key product;
4) Utilisation level of men and machineries is rather at a lower level; and
5) As this type of layout provides the scope of carrying out various operations concurrently by a number
of departments, chances of misunderstandings and inconsistencies amongst various groups cannot be
ruled out.
Flexible Manufacturing System (FMS)
Under FMS, there are clusters of processing work centers, which are linked with each other through an
automatic system of storage and material handling. The entire system is monitored and controlled by an
integrated computerised terminal. It is characterised by the following:

1) It can manufacture various parts without resorting to the exercise of re-tooling:

2) It is a measurement of the speed with which a company changes its processes from manufacturing an
old line of goods to the production of an entirely new product;
3) It is competent to (i) bring about changes in production schedule, (1) amend a part, and (ii) manage
multiple parts; and
4) In a nutshell, FMS is a layout with some flexibility, which ensures that the system responds
appropriately to the changes.

Advantages of FMS
1) Flexible Manufacturing System is considered a competent system, which may be utilised with a view
to getting completely rid of or atleast shrink various problems that disturb the manufacturing sectors;
2) Flexibility and a prompt reaction to any stimulus are two hallmarks of FMS:
3) Under FMS, manufacturers are able to get an extensive range of jobs done in an efficient and
trustworthy manner with the help of a few machines and few personnel;
4) As a result of a better monitoring l control mechanism, automation of various processes, less
dependence upon human resources, etc., the length of the entire process of production is reduced to a
great extent under FMS:
5) It has an edge over other systems because of its result-oriented efficiency;
6) Inventory requirements, in general and WIP in special, are at a low level;

Disadvantages of FMS
1) Ability to adjust according to changes in a product is restricted:
2) Investment is of a higher order and also required meticulous planning and
3) There are additional requirements pertaining to tooling and fixture.

Cellular Manufacturing/Production Layout

Cellular Manufacturing Layout is a kind of layout wherein machines are put together in groups as per the
process needs for a group of similar items, which are required to be put through the similar processing.
Such groups are referred to as 'Cells'. Once the processing in one cell is completed, the processed end
products are passed on to the next cell for further processing at their level. A cellular layout may, thus, be
considered as an equipment layout designed to facilitate cellular manufacturing.

Advantages of Cellular Production/Cellular Manufacturing Layout

1) Reduced Flow Times: Flow time is comparatively at a reduced level under the cellular production
layout, due to less number of hurdles.
2) Process Time Saves: Because of the removal of needless new set-ups or amendments to the existing
set- ups, there is substantial saving in the process time.
3) Inventory Reduction: Less number of hurdles results in significant decrease in the level of WIP
inventories.
4) Produce Variety of Products: Group technology layout ensures production of requisite varieties of
items.
5) Rush Order can be Produced: Even the orders received at a short notice can be executed within the
required time-frame without compromising with the routine production activities.
6) JOB Satisfaction: Job satisfaction level of the personnel attached to a Cell is rather quite high.
Disadvantages of Cellular Production/Cellular Manufacturing Layout
1) High Cost: The cost involved in this type of layout tends to be exorbitant. Proficiency in group
technology is generally not available within the organisation and as such the services of a consultant are
required for the purpose.
2) Not Suitable for Large Variety of Products: This type of layout is inappropriate for the factories
engaged with the manufacturing of a large number of products.
3) Does Not Suits all Applications: Group technology codes are numerous and a single group technology
code cannot be uniformly suitable in respect of all the applications.
4) Difficult to Conceive: All the processes for a group of components are difficult to take care of in a cell,
created for the purpose.
5) Impractical: Group technology cells may be required to undergo frequent amendments, due to frequent
changes being taken place in the range of product mix.

Hybrid or Combined Layout

A blend of two layouts, viz. process layout and product layout is termed as hybrid/combined layout. The
advantages of both the layouts may be put to use to have a synergic benefit, provided the products
manufactured have some level of similarities without any form of complexity.

Advantages of Hybrid/Combined Layout Combined

1) It provides a synergic benefit of the goodness of various layouts
2) Men, materials and machines are put to their most advantageous use
3) Overall time taken in the production exercise is less, and
4) Low cost and better quality in respect of material handling.

Disadvantages of Hybrid/Combined Layout

1) Investment is relatively high,
2) Low level of flexibility,
3) Heavy capital investment is involved,
4) Replacement of machineries, if warranted, is not easy, and
5) Some of the machines are compelled to remain unused for a significant period of time.

Advantages of Facility Layout

1) Reduce Cost: The overall manufacturing cost is likely to be reduced considerably due to efficient
material management, if the layout is appropriately structured.
2) Efficient Use of Space: A system of well-designed layout ensures efficient use of the available space
especially in urban and semi-urban areas.
3) Monitoring of Quality: It is possible to have a close monitoring of the quality of a product or service
produced as the quality control department is competent enough under an appropriately structured layout.
4) Supervision: The supervision job of managers/supervisors becomes smooth and hassle-free under a
properly designed layout.
5) Optimum Utilisation: An efficient layout ensures optimum utilisation of various inputs, including the
manpower.
6) Productivity: Higher productivity achieved through a better designed layout results in an increase in the
incentives earned by the employees and workers. It also improves their morale and they are encouraged to
perform better which further improves productivity. Thus, a virtuous cycle is created, which is good for
the organisation as a whole.

7) Safety: Safety aspect is also taken care by a good layout design. The number of accidents is drastically
reduced due to this.
8) Flexibility: The design of the layout must be such that if in future the need arises, it can be easily
change with the changing environment.
9) Balance: The manufacturing concern involves various processes and machines to produce a product.
Layout is meant for arrangement of these machines in an efficient way, so that a proper balance between
each process can be maintained. An effective layout helps the organisation to save time, cost and energy.
The output of one machine acts as the input of other machinery, so it is very important to maintain the
balance between each process. The time and cost involved in the movement of material and labour should
be minimised, so that they can be utilised elsewhere.

10) Sequence of Operations: Layout design specifies the sequence of operations and this sequence of
operation helps to get an idea about the requirement of space for the placement of machines, equipment
and tools As a layout is concerned with the arrangement of machines and departments, it provides a
direction in which the material has to move to convert it into a final product.

Disadvantages of Facility Layout

1) Re-Layout for a Design Change: The layout designs are required to be changed in response to change
in process design or production process.
2) Enlarged Department: In cases where the production of some parts or products is required to be
increased then the layout plan may also be required to be changed

3) Reduced Departments: Change in the number of departments may impact the process flow and may
require the facility layout change. If the production of the plant decreases than it is advisable to remove
extra department and use that space for other work

4) Addition of New Departments: The new departments may be required to be added to the production
process, leading to facility layout change. Such changes are required as additional inputs require extra
space for storage and placement, etc.