Process Selection and Facility Layout

Process selection: Process selection refers to deciding on the way production of goods or services will be
organized. It has major implications for capacity planning, layout of facilities, equipment, and design of
work systems. Process selection occurs as a matter of course when new products or services are being
planned. However, it also occurs periodically due to technological changes in products or equipment, as
well as competitive pressures.

Forecasts, product and service design and technological considerations all influence capacity planning
and process selection. Moreover, capacity and process selection are interrelated, and are often done in
concert. They, in turn, affect facility and equipment choices, layout, and work design.

Process choice is demand driven. The two key aspects in process selection are:
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 types: Different process types are found in a wide range of manufacturing and service settings.
The ideal is to have process capabilities match product or service requirements. Failure to do so can
result in inefficiencies and higher costs than are necessary, perhaps creating a competitive disadvantage.
There are five basic process types:

1. Job shop: A job shop 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; work includes small
jobs, each with somewhat different processing requirements. High flexibility using general-
purpose equipment and skilled workers are important characteristics of a job shop. An example
of a job shop process can be a hospital medical team that performs a diagnostic procedure.
2. Batch: Batch processing 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 be as flexible as
in a job shop, but processing is still intermittent. The skill level of workers doesn’t need to be as
high as in a job shop because there is less variety in the jobs being processed. Examples of batch
systems include movie theaters, which show movies to groups of people.
3. Repetitive: When higher volumes of more standardized goods or services are needed, repetitive
processing is used. The standardized output means only slight flexibility of equipment is needed.
Skill of workers is generally low. Examples of this type of system include production lines and
assembly lines. In fact, this type of process is sometimes referred to as assembly. An example of
a service system is an automatic carwash. Also, mass customization is an option.
4. Continuous: When a very high volume of non-discrete, highly standardized output is desired, a
continuous system is used. These systems have almost no variety in output and hence, no need
for equipment flexibility. Workers’ skill requirements can range from low to high, depending on
the complexity of the system and the expertise workers need. Generally, if equipment is highly
specialized, worker skills can be lower. Examples of non-discrete products made in continuous
systems include steel. Continuous services include supplying electricity.
5. Project: A project is used for work that is non-routine, with a unique set of objectives to be
accomplished in a limited time frame. Examples range from simple to complicated. Equipment
flexibility and worker skills can range from low to high. The type of process or processes used by
 an organization influences a great many activities of the organization. Some situations are not
ongoing but instead are of limited duration. In such instances, the work is often organized as a
project.

Job variety, process flexibility and unit cost are highest for a job shop and get progressively lower
moving from job shop to continuous processing. Conversely, volume of output is lowest for a job shop
and gets progressively higher moving from job shop to continuous processing. If the goal is to be able to
process a small volume of jobs that will involve high variety, job shop processing is most appropriate.
For less variety and a higher volume, a batch system would be most appropriate and so on. Products and
services often go through life cycles that begin with low volume, which increases as products or services
become better known. When that happens, a manager must know when to shift from one type of
process to the next. Some operations remain at a certain level, while others increase or decrease over
time. Again, it is important for a manager to assess his products and services and make a judgment on
whether to plan for changes in processing over time.

Process type also impacts supply chain requirements. Repetitive and continuous processes require
steady inputs of high-volume goods and services. Delivery reliability in terms of quality and timing is
essential. Job shop and batch processing may mean that suppliers have to be able to deal with varying
order quantities and timing of orders. In some instances, seasonality is a factor, so suppliers must be
able to handle periodic large demand.

Automation: Automation is machinery that has sensing and control devices that enable it to operate
automatically. Automation can range from factories that are completely automated to a single
automated operation.

Automation offers a number of advantages over human labor. It has low variability, whereas it is difficult
for a human to perform a task in exactly the same way, in the same amount of time and on a repetitive
basis. In a production setting, variability is detrimental to quality and to meeting schedules. Moreover,
machines do not get bored or distracted, nor do they go out on strike, ask for higher wages, or file labor
grievances. Still another advantage of automation is reduction of variable costs. In order for automated
processing to be an option, job-processing requirements must be standardized.

Both manufacturing and service organizations are increasing their use of automation as a way to reduce
costs, increase productivity, and improve quality and consistency. Automation is frequently touted as a
strategy necessary for competitiveness. However, automation also has certain disadvantages and
limitations compared to human labor. To begin with, it can be costly. Technology is expensive; usually it
requires high volumes of output to offset high costs. In addition, automation is much less flexible than
human labor. Once a process has been automated, there is substantial reason for not changing it.
Moreover, workers sometimes fear automation because it might cause them to lose their jobs. That can
have an adverse effect on morale and productivity.

Decision makers must carefully examine the issue of whether to automate or the degree to which to
automate, so that they clearly understand all the ramifications. Also, much thought and careful planning
are necessary to successfully integrate automation into a production system. Automation has important
implications not only for cost and flexibility, but also for the fit with overall strategic priorities. If the
decision is made to automate, care must be taken to remove waste from the system prior to
automating, to avoid building the waste into the automated system.
Types of automation: There are three kinds of automation: fixed, programmable and flexible.
1. Fixed automation: Fixed automation is the least flexible. It uses high-cost, specialized equipment
for a fixed sequence of operations. Low cost and high volume are its primary advantages;
minimal variety and the high cost of making major changes in either product or process are its
primary limitations.
2. Programmable automation: Programmable automation involves the use of high-cost, general-
purpose equipment controlled by a computer program that provides both the sequence of
operations and specific details about each operation. This type of automation has the capability
of economically producing a fairly wide variety of low-volume products in small batches.
Numerically controlled (NC) machines and some robots are applications of programmable
automation.
3. Flexible automation: Flexible automation evolved from programmable automation. It uses
equipment that is more customized than that of programmable automation. A key difference
between the two is that flexible automation requires significantly less changeover time. This
permits almost continuous operation of equipment and product variety without the need to
produce in batches. In practice, flexible automation is used in several different formats.

Computer-aided manufacturing: CAM refers to the use of computers in process control, ranging from
robots to automated quality control. NC 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. The instructions are stored on a device such as magnetic tape or microprocessor.

Individual machines often have their own computer; this is referred to as computerized numerical
control (CNC). Or one computer may control a number of NC machines, which is referred to as direct
numerical control (DNC). NC machines are best used in cases where parts are processed frequently and
in small batches, where part geometry is complex, close tolerances are required, mistakes are costly,
and there is the possibility of frequent changes in design. The main limitations of NC machines are the
higher skill levels needed to program the machines and their inability to detect tool wear and material
variation.

The use of robots in manufacturing is sometimes an option. Robots can handle a wide variety of tasks.
They relieve humans from heavy or dirty work and often eliminate drudgery tasks. Some uses of robots
are fairly simple, others are much more complex. At the lowest level are robots that follow a fixed set of
instructions. Next are programmable robots, which can repeat a set of movements after being led
through the sequence. At the next level up are robots that follow instructions from a computer. Below
are robots that can recognize objects and make certain simple decisions.

Flexible manufacturing system: FMS is a group of machines that include supervisory computer control,
automatic material handling, and robots or other automated processing equipment. Reprogrammable
controllers enable these systems to produce a variety of similar products. Systems may range from three
or four machines to more than a dozen. They are designed to handle intermittent processing
requirements with some of the benefits of automation and some of the flexibility of individual or stand-
alone machines.

FMS offer reduced labor costs and more consistent quality when compared with more traditional
manufacturing methods, lower capital investment and higher flexibility than hard automation and
relatively quick change-over time. FMS often appeal to managers who hope to achieve both the
flexibility of job shop processing and the productivity of repetitive processing systems.

Facilities layout: Layout refers to the configuration of departments, work centers and equipment, with
particular emphasis on movement of work through the system. As in other areas of system design,
layout decisions are important for three basic reasons:

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.

Reasons for redesign of layouts: The need for layout planning arises both in the process of designing
new facilities and in redesigning existing facilities. Poor layout design can adversely affect system
performance. The most common reasons for redesign of layouts include:

1. inefficient operations,
2. accidents or safety hazards,
3. changes in the design of products or services,
4. introduction of new products or services,
5. changes in the volume of output or mix of outputs,
6. changes in methods or equipment,
7. changes in environmental or other legal requirements and morale problems.

Objectives of layout design: 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.

Types of layout: The three basic types of layout are product, process, and fixed-position. Product layouts
are most conducive to repetitive processing, process layouts are used for intermittent processing and
fixed-position layouts are used when projects require layouts.

Product layouts: Product layouts are used to achieve a smooth and rapid flow of large volumes of goods
or customers through a system. This is made possible by highly standardized goods or services that allow
highly standardized, repetitive processing. The work is divided into a series of standardized tasks,
permitting specialization of equipment and division of labor. Because only one or a few very similar
items are involved, it is feasible to arrange an entire layout to correspond to the technological
processing requirements of the product or service. For instance, if a portion of a manufacturing
operation required the sequence of cutting, sanding and painting, the appropriate pieces of equipment
would be arranged in that same sequence. And because each item follows the same sequence of
operations, it is often possible to utilize fixed-path material-handling equipment such as conveyors to
transport items between operations. The resulting arrangement forms a line. In manufacturing
environments, the lines are referred to as production lines or assembly lines, depending on the type of
activity involved. Examples of product layout are less plentiful in service environments because
processing requirements usually exhibit too much variability to make standardization feasible. Without
high standardization, many of the benefits of repetitive processing are lost.

The main advantages of product layouts are:

1. A high rate of output.

2. Low unit cost due to high volume. The high cost of specialized equipment is spread over many
units.
3. Labor specialization, which reduces training costs and time, and results in a wide span of
supervision.
4. Low material-handling cost per unit. Material handling is simplified because units follow the
same sequence of operations. Material handling is often automated.
5. A high utilization of labor and equipment.
6. 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.
7. Fairly routine accounting, purchasing, and inventory control.

The primary disadvantages of product layouts include the following:

1. 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.
2. Poorly skilled workers may exhibit little interest in maintaining equipment or in the quality of
output.
3. The system is fairly inflexible in response to changes in the volume of output or changes in
product or process design.
4. The system is highly susceptible to shutdowns caused by equipment breakdowns or excessive
absenteeism because workstations are highly interdependent.
5. Preventive maintenance, the capacity for quick repairs, and spare-parts inventories are
necessary expenses.
6. 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.

Process layouts: Process layouts are designed to process items or provide services that involve a variety
of processing requirements. The variety of jobs that are processed requires frequent adjustments to
equipment. This causes a discontinuous work flow, which is referred to as intermittent processing. The
layouts feature departments or other functional groupings in which similar kinds of activities are
performed. Items that require those operations are frequently moved in lots or batches to the
departments in a sequence that varies from job to job. Consequently, variable-path material handling
equipment is needed to handle the variety of routes and items. The use of general-purpose equipment
provides the flexibility necessary to handle a wide range of processing requirements. Workers who
operate the equipment are usually skilled or semiskilled. Process layouts are quite common in service
environments. Examples include hospitals, colleges and universities, banks, auto repair shops, airlines,
and public libraries. For instance, hospitals have departments or other units that specifically handle
surgery, maternity, pediatrics, psychiatric, emergency, and geriatric care.
The advantages of process layouts include the following:

1. The systems can handle a variety of processing requirements.

2. The systems are not particularly vulnerable to equipment failures.
3. General-purpose equipment is often less costly than the specialized equipment used in product
layouts and is easier and less costly to maintain.
4. It is possible to use individual incentive systems.

The disadvantages of process layouts include the following:

1. In-process inventory costs can be high if batch processing is used in manufacturing systems.
2. Routing and scheduling pose continual challenges.
3. Equipment utilization rates are low.
4. Material handling is slow and inefficient and more costly per unit than in product layouts.
5. Job complexities often reduce the span of supervision and result in higher supervisory costs than
with product layouts.
6. Special attention necessary for each product or customer and low volumes result in higher unit
costs than with product layouts.
7. Accounting, inventory control, and purchasing are much more involved than with product
layouts.

Fixed-position layouts: In fixed-position layouts, the item being worked on remains stationary and
workers, materials and equipment are moved about as needed. Almost always, 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. Fixed-position layouts are used in large construction projects.
Because of the many diverse activities carried out on large projects and because of the wide range of
skills required, special efforts are needed to coordinate the activities and the span of control can be
quite narrow.

Line balancing: The goal of a product layout is to arrange workers or machines in the sequence that
operations need to be performed. The sequence is referred to as a production line or an assembly line.
Because it is difficult and costly to change a product layout that is inefficient, design is a critical issue.
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.

The process of deciding how to assign tasks to workstations is referred to as line balancing. The goal of
line balancing is to obtain task groupings that represent 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 task times are not equal among workstations; some stations are capable of producing at higher
rates than others.

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. One cause
of this is that it may not be feasible to combine certain activities into the same bundle, either because of
differences in equipment requirements or because the activities are not compatible. Another cause of
difficulty is that differences among elemental task lengths cannot always be overcome by grouping
tasks. A third cause of an inability to perfectly balance a line is that a required technological sequence
may prohibit otherwise desirable task combinations.

Cycle time: The 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. Hence, the line’s
capacity is a function of its cycle time. Suppose that the work required to fabricate a certain product can
be divided up into five elemental tasks. The task times govern the range of possible cycle times. The
minimum cycle time is equal to the longest task time and the maximum cycle time is equal to the sum of
the task times. The minimum and maximum cycle times are important because they establish the
potential range of output for the line.

Operating time per day

Output rate=
Cycle time
The number of workstations that will be needed is a function of both the desired output rate and our
ability to combine elemental tasks into workstations. The theoretical minimum number of stations
necessary to provide a specified rate of output as follows:

N min =
∑t
Cycle time
where N min = Theoretical minimum number of stations

∑ t = Sum of task times
Precedence diagram: Precedence diagram is a diagram that shows elemental tasks and their precedence
requirements. 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. Managers employ heuristic (intuitive)
rules, which provide good and sometimes optimal sets of assignments.

1. Assign tasks in order of most following tasks.

2. Assign tasks in order of greatest positional weight. Positional weight is the sum of each task’s
time and the times of all following tasks.