MGT613 - Production / Operations Management - Lecture Handout 20

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In our last lecture, we identified Facilities layout as the configuration of departments, sections, work centers, equipment with focus being on movement of goods or services or works. So whether it’s a traveler making use of the railway platform, or bus station or airport, or an automobile or a product during its production stage or a patient needing medical attention, they all would qualify as good examples of work being moved through a facility. Often poor design of productive system can result in poor design of the facilities layout. We discussed product, process and hybrid layouts, we now focus our attention on cellular production. In cellular manufacturing, production work stations and equipment are
arranged in a sequence that supports a smooth flow of materials and components through the production process with minimal transport or delay. Implementation of this lean method often represents the first major shift in production activity, and it is the key enabler of increased production velocity and flexibility, as well as the reduction of capital requirements. The concept of lean production and Just in Time Production Systems would be studied in detail when we will discuss improvement of Productive Systems.

Cellular Layouts

Cellular production techniques reflect a relatively new concept in manufacturing and have yet found immediate acceptance in Pakistani manufacturing industry as well. Organizations which opt for cellular manufacturing follow the lean production strategy. There are two important concepts to understand at the moment, what cellular production is and what group technology is? We will discuss lean production systems in detail towards the end of our semester later, for the time being we can consider lean production systems as systems which focus on high quality process with elimination of waste and effective use of available resources.

Cellular Production

  • Layout in which machines are grouped into a cell that can process items that have similar processing requirements.

Group Technology

  • The grouping into part families of items with similar design or manufacturing characteristics.

Cellular production always would represent the layout of machines while group technology would reflect the collection of items or products which need the same manufacturing requirements. Both these terms greatly influence the improvements of process and operations for any organization.

It is pertinent to understand the advantage of cellular layouts over the functional layouts. We already know that functional layouts are not only conventional in nature but also require more space as well as somewhat rigid layout plans, with increased special workforce and continuous supervision. The table below represents the same concept.

Primary Differences between Functional and Cellular Layouts

Dimension Functional Cellular
Number of moves between departments many few
Travel distances longer shorter
Travel paths variable fixed
Job waiting times greater shorter
Throughput time higher lower
Amount of work in process higher lower
Supervision difficulty higher lower
Scheduling complexity higher lower
Equipment utilization lower higher

Facilities Layouts

We have so far discussed what product and process based layouts are, in between we also focused our attention on hybrid configuration as well as cellular production layouts. We can thus safely define facilities layout as the configuration of departments, work centers and equipment, with particular emphasis on movement of work (customers or materials) through the system.

We come across different layouts in our daily lives especially with respect to the services side. Some important Service Layouts, which we should know include

  • Warehouse and storage layouts
  • Retail layouts
  • Office layouts

People often confuse retail stores with warehouse stores, an effective way to understand the importance of these important business channels is to identify the layouts associated with it. Retail configurations are human friendly and allow the movement of goods through small trolleys for the customers and if placement of goods in the aisle is to be carried out then simple forklifts or small vehicles are used, sometimes over head cranes or hoists are also used.

Another important point of difference being the way the goods are displayed and shelved. The layouts are properly illuminated and ventilated and mostly maintained at a human comfort temperature through effective heating and air-conditioning. The floors too are mostly vinyled and designed to make the customer movement less stressful. The movement of goods involves light loads and easy transportation, as against this the warehouse and storage layouts, which require heavy loads and transportation. These goods require heavy vehicles and loaders for movement. The stores have different illumination arrangement then retail outlets. The security measures are different for both types of layouts, ranging from close circuit television cameras to electric barbed wires.

Importance of Layout Decisions

Operations Managers are often questioned about the importance of a new or existing facilities layout. In addition to the fact that operations manager work for improvement towards design and effect use of operation systems, they should also know the importance of layout decision in terms of money. Some of these are:-

  1. Layout decisions require substantial investments of money and effort.
  2. Layout decisions involve long-term commitments.
  3. Layout decisions have significant impact on cost and efficiency of short-term operations.

The Need for Layout Decisions

An operations manager should be aware of the fact that the need for a proper and effective layout facility is always there, it is often said that if there is no facilities layout problem being faced by an organization then it is probably unaware of its true potential. The need for layout planning arises both in the process of designing new facilities and in redesigning existing facilities. Some of the common reasons faced by the organization include:-

  1. In-efficient Operations (High Cost/Bottlenecks that hamper true potential).
  2. Accidents or Safety Hazards.
  3. Changes in design of products or services.
  4. Introduction of new products or services.
  5. Changes in volume of output or mix of outputs.
  6. Changes in Methods or equipment.
  7. Changes in Environmental and Legal requirements.
  8. Morale Problems (e.g. lack of face to face contact between supervisor and worker or even senior management and junior management).

Design Product Layouts: Line Balancing

Line Balancing is the process of assigning tasks to workstations in such a way that the workstations have approximately equal time requirements.
The objective of line balancing is to obtain equal time requirements at majority of the workstations. This shortens the time of manufacturing as well as reduces the idle time. Often industry uses the term cycle time to represent the time in which the organizations resources are engaged to complete a process and idle time to represent the time in which the resources are left unused.

Cycle Time

Cycle time is the maximum time allowed at each workstation to complete its set of tasks on a unit. If CT represents cycle time and D represents the desired output then we can calculate cycle time as

Cycle Time

Maximum Output

If we know what is the cycle time required for the manufacturing of a product or offering of a service we can calculate the maximum output. If OC is the Output capacity, OT is the operating Time and CT is the Cycle time then

Maximum Output

If an automobile manufacturer works for 8 hours and requires 4 hours to complete its cycle then the out put capacity would be 8/4= 2 automobiles.

Minimum Number of Workstations Required

Organizations working especially service organizations side often design their work facilities in a way that they can increase their capacity output by increasing the number of work stations. If D is the desired output, t is the time required for a specific time and OT is the Operating Time then the number of workstations N can be calculated as.

Minimum Number of Workstations Required

Precedence Diagram

Precedence diagram: Tool used in line balancing to display elemental tasks and sequence requirements

Precedence Diagram

Line Balancing Rules

  • Assign tasks in order of most following tasks.
    • Count the number of tasks that follow.
  • 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.

Designing Process Layouts require certain information, which includes the following:

  1. List of departments
  2. Projection of work flows
  3. Distance between locations
  4. Amount of money to be invested
  5. List of special considerations
  6. Location of key utilities


Facilities layout plays an important part in an organization achieving its maximum potential. This also indicates that facilities layout allow an organization to enjoy a competitive advantage over its competitors. Facilities layout require more than just cost benefit analysis infect the decision requires how much space is required by the facility and how to configure or optimize the use of this space for the product or process. Of the different types of product, process, fixed and hybrid types of configurations, the current trend is towards cellular manufacturing and group technology.

Capital investments, materials handling costs and flexibility are important criteria in judging most facilities layout. Low volumes of production do allow the use of Group Technology or cellular manufacturing. Designing a process layout requires collecting information about acceptable block plan, and translating the block plan into a detailed layout. In product layout, workstations are arranged in a naturally occurring, heuristic (commonsense) for high volume of production. In line balancing the tasks are assigned to workstations so as to satisfy all precedence and cycle time constraints while minimizing the number of work stations.