MGMT2026 PRODUCTION AND OPERATIONS MANAGEMENT (POM)

LECTURE 5: PROCESS SELECTION AND FACILITIES LAYOUT

Mr. Andrew Eastmond

 Learning Objectives
• Students should be able to:
 Explain process selection and various types of
process types in POM
 Explain facilities layout and the various layout
types for products and services
 Estimate output rate and cycle time based on
line balancing using workstations.
A. PROCESS SELECTION
 Introduction
• Process selection
– Deciding on the way production of
goods or services will be organized
• Major implications
– Capacity planning
– Layout of facilities
– Equipment, Capital-equipment or labor
intensive
– Design of work systems
• New product and service,
technological changes, and
competitive pressures
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 Process Selection
• Different business normally adopt one or a
combination of processes.
• Process selection is key to all organisations and
helps organise the production of various
products and services.
• Process selection is dependent on the:
 Level of variety in products or services
 Degree of equipment flexibility needed
 Expected volume of output
 5 Process Types
• Job Shops: Produces small lots/segments of different
products/services - customised and low volume output,
general equipment, skilled workers, high-variety. E.g:
print shop, veterinarian’s office, tool die shop
• Batch Processing: Produces periodic batches of the
same product - moderate volume and variety. Variety
among batches; low skill level. E.g: paint production,
airlines operation
• Repetitive/Assembly: Produces high volume of
standardised items, limited variety. E.g: auto car
factories, cafeteria
• Continuous Processing: Very high volume and no
variety. – highly automated E.g: supplying electricity,
chemical plants
• Projects: Nonroutine jobs. E.g. launching a new
product; consulting.
 EXAMPLES IN INDUSTRIES
• Job Shop: custom metal processing shop, hospital emergency
rooms, or making customised furniture and cabinets.
• Batch Processing: scheduling air travel, manufacturing
garments, furniture manufacturing, making components that
feed an assembly line, processing mortgage loans, and
manufacturing heavy equipment.
• Repetitive/Assembly: Products created by a line process
include automobiles, appliances, personal computers, and toys.
Services based on a line process are fast-food restaurants and
cafeterias.
• Continuous: are petroleum refineries, chemical plants, and
plants making beer, steel, and processed food items.
• Projects: Consultancy, putting on a play or movie, publishing a
book, building a bridge or house.
 Types of Processing
Repetitive/
Job Shop Batch Assembly Continuous
Description Customized Semi- Standardized Highly
goods or standardized goods or standardized
services goods or services goods or
services services
Advantages Able to handle Flexibility; easy Low unit cost, Very efficient,
a wide variety to add or high volume, very high
of work change efficient volume
products or
services
Dis- Slow, high cost Moderate cost Low flexibility, Very rigid, lack
advantages per unit, per unit, high cost of of variety,
complex moderate downtime costly to
planning scheduling change, very
and complexity high cost of
scheduling downtime
 Product – Process Matrix

Dimension Job Shop Batch Repetitive Continuous

Job variety Very High Moderate Low Very low
Process Very High Moderate Low Very low
flexibility

Unit cost Very High Moderate Low Very low

Volume of Very low Low High Very high
output

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 Product-Process Matrix

Flexibility/Variety

Volume

• The diagonal represents the “ideal” match

• Hybrid process are possible (e.g., job-shop & batch)
• Process choice may change as products goes through its life-cycles
6-10
 Lean Process Design
• Focuses on waste reduction and variance
reduction in workload over the entire process.
• Aims to improve process flow
• Successful lean process design leads to
reduced inventory and floor space; quicker
response time and shorter lead times.
 Automation: Machinery that has sensing and control
devices that enables it to operate
Fixed automation: Low production cost and high volume but with
minimal variety and high changes cost
– Assembly line
Programmable automation: Economically producing a wide
variety of low volume products in small batches
– Computer-aided design and manufacturing systems
(CAD/CAM)
– Numerically controlled (NC) machines
– Industrial robots (arms)
Flexible automation: Require less changeover time and allow
continuous operation of equipment and product variety
• Automated retrieval and storage
• Automated guided vehicles
– Computer-integrated manufacturing (CIM)
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Robot

13
 Flexible Manufacturing System
• Group of machines that include supervisory computer
control, automatic material handling, robots and other
processing equipment
– Advantage:
reduce labor costs and more consistent quality
lower capital investment and higher flexibility than
hard automation
relative quick changeover time
– Disadvantage
used for a family of products and require longer
planning and development times

14
 Computer-integrated manufacturing
• Use integrating computer system to link a broad range of
manufacturing activities, including engineering design,
purchasing, order processing and production planning
and control
• Advantage:
rapid response to customer order and product change,
reduce direct labor cost, high quality

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FACILITIES LAYOUT
 Facilities Layout
• Layout
– The configuration of departments, work centers, and
equipment, with particular emphasis on movement of
work (customers or materials) through the system

– Facilities layout decisions arise when:

• Designing new facilities
• Re-designing existing facilities

– The basic objective of layout design is to facilitate a

smooth flow of work, material, and information through
the system.
 The Need for Layout Decisions

Inefficient operations
For Example: Changes in the design
High Cost of products or services
Bottlenecks

Accidents
The introduction of new
products or services

Safety hazards
 The Need for Layout Design (Cont’d)

Changes in
environmental Changes in volume of
or other legal output or mix of
requirements products

Morale problems
Changes in methods
and equipment
 Other Objectives of Facilities Layout
Decisions
• To facilitate attainment of product or service quality
• To use workers and space more efficiently
• To avoid bottlenecks
• To minimise material handling costs
• To eliminate unnecessary movements of workers and
materials
 Basic Layout Types
• Product Layout
– A layout in which workstations or departments are arranged
in a linear path.
E.g. Auto plants, cafeterias
• Process Layout
– A layout that organises resources (employees) and
equipment by function rather than by service or product.
E.g. department stores, universities, hospitals.
• Fixed Position Layout
– Layout in which the product or project remains
stationary, and workers, materials, and equipment are
moved as needed
• Building projects, disabled patients at hospitals
• Combination Layouts
- An arrangement in which some portions of the facility
have a process layout and others have a product layout.
 Process Layout

A job shop has a process layout.

Grinding Forging Lathes

Painting Welding Drills

Milling
Office machines Foundry
 Product Layout

A production line has a product layout.

Station 1 Station 2 Station 3 Station 4

 Product Layouts
• Product layout
– Layout that uses standardized processing operations to achieve
smooth, rapid, high-volume flow
– E.g., production line or assembly line
– How?
Raw materials Station Station Station Station Finished
or customer 1 2 3 4 item

Material Material Material Material

and/or and/or and/or and/or

labor labor labor labor
Used for Repetitive Processing
Repetitive or Continuous
 Product Layouts
• Although product layouts often follow a straight line, a straight
line is not always the best, and layouts may take an L, O, S, or U
shape. Why?

– L:
Image source: mdcegypt.com
– O:
– S:
– U: more compact, increased communication facilitating team work,
minimize the material handling
 Product Layouts
Advantages Disadvantages
• High rate of output Creates dull, repetitive jobs
• Low unit cost Poorly skilled workers may not
• Labour specialisation maintain equipment or quality of
output
• Low material handling cost Fairly inflexible to changes in
per unit
volume or product or process
• High utilisation of labour design
and equipment Highly susceptible to shutdowns
• Established routing and Preventive maintenance,
scheduling capacity for quick repair and
• Routine accounting, spare-parts inventories are
purchasing, and inventory necessary expenses
control Individual incentive plans are
impractical
 Non-repetitive Processing:
Process Layouts
• Process layouts
– Layouts that can handle varied processing requirements
– E.g., machine shop: milling, grinding, drilling, etc.

Dept. A Dept. C Dept. E

Dept. B Dept. D Dept. F

Used for Intermittent processing

Job Shop or Batch
 Process Layouts
Advantages Disadvantages
• Can handle a variety of • In-process inventories can be high
processing requirements • Routing and scheduling pose
• Not particularly vulnerable continual challenges
to equipment failures • Equipment utilisation rates are low
• General-purpose • Material handling is slow and less
equipment is often less efficient
costly and easier and less • Complicates supervision
costly to maintain • Special attention necessary for each
• It is possible to use product or customer
individual incentive • Accounting, inventory control, and
systems purchasing are more complex
 Fixed Position Layouts
• Fixed Position Layout
– Layout in which the product or project remains
stationary, and workers, materials, and equipment
are moved as needed
– E.g., farming, firefighting, road building, home
building, remodeling and repair, and drilling for oil
 Combination Layouts
• Some operational environments use a
combination of the three basic layout types:
– Hospitals
– Supermarket
– Shipyards

• Some organisations are moving away from

process layouts in an effort to capture the
benefits of product layouts.
 Service Layouts

• Fixed-position layouts (e.g. appliance repair,

roofing, landscaping, etc): materials, labour and
equipment are brought to customer’s residence.
• Process Layouts: Very common in services sector
(hospitals, supermarkets, department stores, etc)
• Product Layouts: Service is organised
sequentially with all customers or work following
the same sequence (e.g. car wash or cafeteria
line).
 Service Layouts

• Degree of customer contract and degree of

customisation are two key factors in service
layout.
 Other Service Layouts:
• Warehouse and storage layouts
• Retail Layouts
• Office Layouts
Line balancing
Line Balancing
The process of assigning tasks to workstations in such a way that
the workstations have approximately equal time requirements
Goal:
Obtain task grouping that represent approximately equal time
requirements since this minimizes idle time along the line and
results in a high utilization of equipment and labor
Why is line balancing important?
1. It allows us to use labor and equipment more efficiently.
2. To avoid fairness issues that arise when one workstation must
work harder than another.
– Input
• Tasks sequencing (precedence diagram)
• Tasks time
• Operating time
 Line Balancing
• Line balancing involves assigning tasks to
workstations.
• A manager can decide to use anywhere from
one to five workstations (each controlled by a
single worker) to handle five tasks.
• How does a manager decide how many
stations to use?
• Answer: Cycle time
 Precedence Diagram
• Precedence diagram
– A diagram that shows elemental tasks and their precedence
requirements
Task Duration Immediate
(min) predecessor
a Select material 0.1 -
b Make petals 1.0 a
c Select 0.7 -
rhinestones
d Glue 0.5 b, c
rhinestones
e Package 0.2 d
 Cycle Time
• Cycle time
– The maximum time allowed at each workstation to
complete its set of tasks on a unit before work moves
on (depending on the number of workstations):
• Minimum Cycle Time = longest task time = 1.0 min
• Maximum Cycle time = Σt = sum of task times =
2.5 min
 Cycle Time
• Cycle time
• The Minimum Cycle Time would apply if there
were five workstations
• The Maximum Cycle time would apply if all tasks
were performed at a single workstation.
• Both minimum and maximum times determine
potential range of output for the line.
 Output rate of a line
• Cycle time also establishes the output rate of a
line
Operating time per day
Output rate =
Cycle time

• Assuming the line operates 8 hrs per day (i.e.

480 mins), with a minimum cycle time of 1
minute, output would be
480 units per day = 480 minutes per day
1.0 minute per unit
 Output rate of a line
• With a maximum cycle time of 2.5 minutes,
the output would be
480 minutes per day
192 units per day=
2.5 minutes per unit

• Hence, assuming no parallel activities are

being used (e.g. two lines), the line must fall in
the range of 192 units per day to 480 units per
day.
 Determining Cycle Time
• The cycle time is generally determined by the
desired output.
Operating time per day
Cycle time =
Desired output rate
• Hence, suppose desired output rate is 240
units per day (8 hours), cycle time will be:
480 minutes per day
2 minutes per unit =
240 units per day
 How Many Workstations are Needed?
• The required number of workstations is a function of:
– Desired output rate
– The ability to combine tasks into a workstation

• (theoretical) Minimum number of stations

∑t
Nmin=
Cycle time
where
Nmin = theoretical minimum number of stations
∑ t = sum of task times
 How Many Workstations are Needed?
• We know already that ∑ t is 2.5 minutes (maximum
cycle time).
• Cycle time is determined by our previous formula which
is based on some desired output. Let’s say we want 480
units as our desired output in an 8 hr day.

∑t
Nmin=
Cycle time
where
Nmin = theoretical minimum number of stations
∑ t = sum of task times
 How Many Workstations are Needed?
• Cycle time is 1 minute per unit based on a desired
output of 480 units in 8hr day.
480 minutes per day
1 minute per unit =
480 units per day
• So sum of task time is 2.5, and cycle time is 1.
= 2.5 stations or
2.5 minutes per 3 stations
Nmin= unit
1 min per unit per
station
 Line Balancing Example 2
Performance Task Must Follow
Time Task Listed
Task (minutes) Below
A 10 —
B 11 A This means that
C 5 B tasks B and E
cannot be done
D 4 B until task A has
E 12 A been completed
F 3 C, D
G 7 F
H 11 E
I 3 G, H
Total time 66
Let’s work out Cycle Time and Min. Number of
Workstations for Scenario
Performance Task Must Follow
Time Task Listed
Task (minutes) Below
A 10 —
B 11 A
C 5 B
D 4 B
E 12 A
F 3 C, D 5

G 7 F 10 11
C
3 7
H 11 E
A B F G
I 3 G, H 4
3
Total time: 66 D I
12 11
E H

Figure 9.13
 Performance Task Must Follow 480 available mins
Time Task Listed per day
Task (minutes) Below 40 units required
A 10 —
B 11 A Production time available
C 5 B per day
D 4 Cycle
B time = Units required per day
E 12 A = 480 / 40
F 3 C, D 5
= 12 minutes per unit
G 7 F 10 11
C
3 7
H 11 E n
Minimum A ∑ BTime for task i F G
I 3 G, H 4
number of = i = 1 3
Total time 66 workstations Cycle time
D
12 11 I
= 66 / 12
E H
= 5.5 or 6 stations
Figure 9.13