PRODUCTION AND OPERATIONS MANAGEMENT

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Plant Layout

Layout planning in manufacturing and service organizations deals with the physical arrangement of various
resources that are available in the system with an objective to improve the performance of the operating
system, thereby providing better customer service. Typically, in the case of a manufacturing organization,
there may be over 200 machine tools of various kinds to be located in a machine shop. Similarly, in the case
of a service organization such as a hospital or a hotel, there are various resources to be physically located.
We can identify the best possible locations for various resources in an organization though a good layout
planning exercise. Layout planning provides a set of tools and techniques that help an operations manager
to decide where to locate the resources and also to assess the impact of the alternative choices that he/she
may have for locating the resources.
A good layout design will ensure that a vast majority of jobs in a manufacturing system may have to travel
shorter distances before completing their processing requirements. Similarly, in the case of service
organizations, customers may have to walk shorter distances and spend less time in the system to complete
their service requirements. This creates several problems in organizations and several key performance
measures suffer. The most significant and visible effect is the time taken to complete the process. Longer
distances would mean more time to complete the process and more material handling in the case of
manufacturing organizations, leading to higher material handling costs. Eventually, in both service and
manufacturing system, this leads to poor quality.
Implications of Layout Planning

The relationship between “volume-variety-flow” provides crucial inputs to the layout problem.

Table I: Volume – Variety – Flow: Implications for layout planning.

Variety
Very Low Variety Medium Variety High Variety One-off
Execution
Flow attributes Stream lined flow Multiple flow Disorganised Jumbled flow
Paths flow
Volume attributes High volumes Mid-volume Low volume One piece

Examples of operating Process industry Batch Job shops: Project

system Mass Manufacturing Customised Shops
product/Service firms product/Service
provider provider
Types of layout used Line layout: Group Process layout Fixed
Product layout technology position
layout layout.

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Types of Layouts

It is clear from the above discussion that alternative types of layouts are required for the above systems.
Over the years, operations management researchers and practitioners have evolved certain types of
layouts. These are described below.

Product Layout
A product layout is an arrangement of resources in which the resources are placed exactly follows
the visitation sequence dictated by a product. For the above routing information the product layout will
be as shown in Figure 1. In a product layout, the required set of resources for every product is made
available in a dedicated fashion. Due to this, it is possible to arrange the resources in the order of the
machining requirements and ensure smooth component flow in the shop. Since each product will have its
own set of resources, material handling is simpler and it is possible to invest in fixed path material handling
systems to speed up material transfer between successive workstations. Moreover, the production volume
can also be higher. The production control issues are much simpler in a product type of layout compared to
the process layout.
Very often the final assembly in several manufacturing plants follows a product layout. The assembly
workstations are designed in such a manner that at each workstation a part of the job is completed. The
feeder stations are linked to the assembly workstations to ensure material availability. As the product moves
through the assembly, the process is completed. Testing, final inspection and even packing could be part of
this layout so that at the end of the line it is ready for dispatch to the market. In product layouts, the design
of the layout is far more important as it results in a certain degree of operational control. Once the design of
individual workstations is properly made, many problems are solved.

L D M G Product A

L D L G Product B

L D M L G Product C

Fig 1: Example of a product layout

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Process Layout

A process or a functional layout is an arrangement of resources on the basis of the process

characteristics of the resources available. Consider a machine shop consisting of lathes (L), grinders
(G), milling machines (M) and drilling machines (D). A sample process layout for this shop will be as shown
in Figure 2. In the example, components belonging to Product A first visit a lathe, then they visit a drilling
machine, a milling machine, and finally a grinding machine. The major implication of this design in that each
component manufactured in the shop needs to visit the machines in the order of their processing. In reality,
when the number of components manufactured is large, there will be enormous criss-crossing in the shop,
as components need to visit machines in multiple combinations. This increases material handling and poses
challenges for production control.
Each department in a process layout is typically organized into functional groups. Thus, all the lathes will be
organized into a lathe department. Similarly, there will be a drilling department, milling department and so
on. In the fabrication are a similar arrangement would be a welding department, fitting department, shearing
department and so on. All manufacturing support areas are also arranged on a functional basis. Examples
include a maintenance department, quality control department, procurement, stores and production
planning.

Product A
L L L L D D
Product B
D D
Product C L L L L

D D
M M

G G G
M M

Fig 2: Example of a process layout

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Advantages and disadvantages of product and process layout

Process Layout Product Layout

Advantage 1. Sharing of specialized 1. Standardized product/process
and costly equipments routing
2. More flexibility. 2. Operational control is simpler.
3. Less vulnerable to 3. High output rate is possible.
breakdowns
Disadvantages 1. Large inventory buildup [Link] tolerance for breakdowns
2. Operational control 2. Duplication of equipments
difficult leading to high cost
3. Excess material 3. Less flexibility due to
handling dedication of resources.

Group Technology Layout

Group technology (GT) layout provides an alternative method for configuring resources in organizations that
have mid-volume, mid variety product portfolios. GT is a philosophy that seeks to exploit commonality in
manufacturing and uses this as the basis for grouping components and resources. The implementation of
GT is often known as cellular manufacturing. In cellular manufacturing, the available components are
grouped into part families. An appropriate measure for manufacturing similarity is used to identify part
families. Corresponding to each part family, machine groups are identified and the layout is formed
accordingly.

Cell 1 Cell 2

L M D M D L

D L D G D L

L D L D

M L G L M

Cell 3 Cell 4

Fig: 3 Example of a group technology layout