Unit-1

An operation may be defined as the process of changing inputs into outputs thereby adding
value to some entity. Right quality, right quantity, right time and right price are the four basic
requirements of the customers and as such they determine the extent of customer
satisfaction. And if these can be provided at a minimum cost, then the value of goods produced
or services rendered increases.

Operations management is concerned with managing the resources that directly produce the
organisation service and products. The resources are generally consist of people, material,
technology and information but may go wider than this. These resources are brought together
by a series of processes so that they are utilized to deliver the primary service or product of the
organization. Thus operation management is concerned with managing inputs (resources)
through transformation processes to deliver outputs (service or products). The objectives of
production management are “to produce goods and services of the right quality, in the right
quantities, according to the time schedule and a minimum cost”

Objectives of production management

1.Producing the right kind of goods and services that satisfy customers’ needs (effectiveness
objective).

2.Maximizing output of goods and services with minimum resource inputs (efficiency
objective).

3.Ensuring that goods and services produced conform to pre-set quality specifications (quality
objective).

4.Minimizing throughput-time- the time that elapses in the conversion process- by reducing
delays, waiting time and idle time (lead time objective).

5.Maximizing utilization of manpower, machines, etc. (Capacity utilization objective).

6.Minimizing cost of producing goods or rendering a service (Cost objective )

Key Elements of Operations Management

Operations management is the business function that responsible to planning, organizing,

coordinating and controlling the resources needed to produce a company’s products and
services. The operations function can be connected to other functional operations within
organization such as marketing, finance, human resource and etc. so it can be described that all
functional areas undertake operations activities because they all produce the services and
goods. The operations manager is the person who supervised the production, make decision on
operations processes and regarding to connecting into other functional areas. Thus, today every
company realized that operations management is important and also agreed that is the main
core function to organize their organization. the key elements of Operations Management are;

• Product selection and design: The right kind of products and good designs of the
products are crucial for the success of an organizing. A wrong selection of the product and/or
poor design of the products can render the company’s operation ineffective and non-
competitive. Products/services, therefore, must be chosen after detailed evaluation of the
product/services alternatives in conformity with the organization’s objectives. Techniques like
value engineering may be employed in creating alternate designs, which are free from
unnecessary features and meet the intended functions at the lowest cost.

• Process selection and planning: Selection of the optimal “conversion system” is as

important as choice of products/services and their design. Process selection decisions include
decisions concerning choice of technology, equipment, machines, material handling systems,
mechanization and automation. Process planning involves detailing of processes if resource
conversion required and their sequence.

• Facilities (Plant) location: Plant location decisions are strategic decisions and once
plant is set up at a location, it is comparatively immobile and can be shifted later only at a
considerable cost and interruption of production. Although problem of location choice does not
fall within preview the production function and it occurs infrequently, yet it is of crucial
importance because of its major effect on the performance of every department including
production. Therefore, it is important to choose the right location, which will minimize total
“delivered customer” cost (Production and distribution cost). Locational decisions involve
evaluation of locational alternatives against multiplicity of relevant factors considering their
relative importance to the organization and selecting those, which are operationally
advantageous to the organization.

• Facilities (Plant) layout and materials handling: Plant layout is concerned with relative
location of one department (Work center) with another in order to facilitate material flow and
processing of a product in the most efficient manner through the shortest possible time. A good
layout reduces material handling cost, eliminates delays and congestion, improves co-
ordination, provide good housekeeping etc. while a poor layout results in congestion, waste,
frustration, inefficiency and loss of profit.

• Capacity Planning: Capacity planning concerns determination and acquisition of

productive resource to ensure that their availability matches the demand. Capacity decisions
have a direct influence on performance of production system in respect of both resource
productivity and customer service (i.e. delivery performance). Excess capacity results in low
resource productivity while inadequate capacity leads to poor customer service. Capacity
planning decisions can be short-term decisions. Long-term capacity planning decisions concern
expansion/contraction of major facilities required in the conversion process, economics of
multiple shift operation, development of vendors for major components etc. Short-term
capacity planning decisions concern issues like overtime working, sub-contracting, shift
adjustments etc. Break-even analysis is a valuable tool for capacity planning.

• Production Planning and Control (PPC): Production planning is the system for
specifying the production procedure to obtain the desired output in a given time at optimum
cost in conformance with specified standard of quality, and control is essential to ensure that
manufacturing takes place in the manner stated in the plan.

• Inventory control: Inventory control deals with determination of optimal inventory

levels of raw materials, components, parts, tools; finished goods, spares and supplies to ensure
their availability with minimum capital lock up. Material requirement planning (MRP) and
just in time (JIT) are the latest techniques that can help the firm to reduce inventory.
 • Quality assurance and control: Quality is an important aspect of production system and
it must ensure that services and products produced by the company conform to the declared
quality standards at the minimum cost. A total quality assurance system includes such aspects
as setting standards of quality, inspection of purchased and sub-contracted parts, control of
quality during manufacture and inspection of finished product including performance testing
etc.

• Work-study and job design: Work-study, also called time and motion study, is
concerned with improvement of productivity in the existing jobs and the maximization of
productivity in the design of new jobs. Two principal component of work-study are: Method
study and Work measurement.

• Maintenance and replacement: Maintenance and replacement involve selection of

optimal maintenance (preventive and/or breakdown) policy to ensure higher equipment
availability at minimum maintenance and repair cost. Preventive maintenance, which includes
preventive inspection, planned lubrication, periodic cleaning and upkeep, planned replacement
of parts, condition monitoring of the equipment and machines, etc. is most appropriate for
critical machines.

• Cost reduction and cost control: Effective production management must ensure
minimum cost of production and in this context cost reduction and cost control acquires
significant importance. There are large number of tools and techniques available that can help
to make a heavy dent on the production cost.

Function of operation Management :

Operations Management is a branch that deals with managing operations and processes
within the organisation. Efficacious management of operations ensures successful delivery
of the project. The operation managers optimises the operations by making judicious use
of resources and capital. They manage all the aspects related to the operations that take place
in businesses. Operation managers are not only found in a company but
also in manufacturing units. They are required to perform various functions as a part of their
job responsibilities

1. Finance

Finance plays a chief role in operations management. It is essential to ensure that the
organization’s finance has been utilized properly to carry out major functions such as the
creation of goods or services so that the customer’s needs could be satisfied.

2. Operation

This function in operation management is mainly concerned with planning, organising,

directing and controlling all the activities of an organisation which helps in converting the
raw materials and human efforts into valuable goods and services for satisfying customer
needs

3. Strategy
 Strategy in operation management refers to planning tactics that could help them to
optimise the resources and have a competitive edge over others. Business strategies imply to
supply chain configuration, sales, capacity to hold money, optimum utilisation of human
resources and many more.

4. Design of the product

Incorporating innovative technologies play a crucial role in the selling of a product. Thus it is
the duty of operations manager to ensure that the product is designed catering to the market
trends and needs of the customers. The modern-day customers are more concerned about the
quality of the product than its quantity. So, the operation managers focus on producing top-
notch quality products.

5. Forecasting

Forecasting refers to the process of making an estimation regarding certain events that might
occur in the future. In operation management, forecasting refers to the estimation of
customer’s demand so that production can be done accordingly. Through this, the manager
gets to know what to produce, when to produce and how to produce in accordance with the
customer’s needs.

6. Supply Chain Configuration

The main motive of Supply Chain Configuration is to ensure effective management,

monitoring and controlling of all the main activities that are held in a firm. The supply chain
configuration starts from the supply of the raw materials and continues till the production of
the final product and then their selling to the customers which will satisfy their needs and
wants.

7. Managing the Quality

Quality management plays an imperative role in selling a product. The operation managers
allocate the task of quality management to a team and then supervise their task. The managers
identify project defects and rectify them to ensure quality. For this, certain systems are used
that measure and maintain the quality of the product.

Recent Trends In operations management

Global Competition
Operations Strategy
Flexibility Cycle
Time Reduction
Business Process Re-engineering
Supply Chain Management
Workers Involvement TQM
Lean Manufacturing
Organizations must improve their products as well as productivity to retain their
market share. The long-term success of an organization requires investments in
technology because new technologies can improve efficiency and productivity.
Some of the recent technological developments in the field of operations
m a n a g e m e n t , w h i c h i n c l u d e c o m p u t e r - a i d e d d e s i g n ( C A D ) computer-
aided manufacturing (CAM), flexible manufacturing system (FMS), andcomputer
integrated manufacturing (CIM)

Product life cycle:

Just about all manufactured products have a limited life, and during this life they will pass
through four product life cycle stages; Introduction, Growth, Maturity and Decline. In each of
these stages manufacturers face a different set of challenges. Product life cycle management
is the application of different strategies to help meet these challenges and ensure that,
whatever stage of the cycle a product may be going through, the manufacturer can maximize
sales and profits for their product.

Product Life Cycle Management

To effectively manage the product life cycle, organisations need to have a very strong focus
on a number of key business areas:

Development: Before a product can begin its life cycle, it needs to be developed. Research
and new product development is one of the first and possibly most important phases of the
manufacturing process that companies will need to spend time and money on, in order to
make sure that the product is a success.

Financing: Manufacturers will usually need significant funds in order to launch a new
product and sustain it through the Introduction stage, but further investment through the
Growth and Maturity stages may be financed by the profits from sales. In the Decline Stage,
additional investment may be needed to adapt the manufacturing process or move into new
markets. Throughout the life cycle of a product, companies need to consider the most
appropriate way to finance their costs in order to maximize profit potential.

Marketing: During a product’s life, companies will need to adapt their marketing and
promotional activity depending on which stage of the cycle the product is passing through.
As the market develops and matures, the consumers attitude to the product will change. So
the marketing and promotional activity that launches a new product in the Introduction Stage,
will need to be very different from the campaigns that will be designed to protect market
share during the Maturity Stage.

Manufacturing: The cost of manufacturing a product can change during its life cycle. To
begin with, new processes and equipment mean costs are high, especially with a low sales
volume. As the market develops and production increases, costs will start to fall; and when
more efficient and cheaper methods of production are found, these costs can fall even further.
As well as focusing on marketing to make more sales and profit, companies also need to look
at ways of reducing cost throughout the manufacturing process.
Information: Whether it’s data about the potential market that will make a new product
viable, feedback about different marketing campaigns to see which are most effective, or
monitoring the growth and eventual decline of the market in order to decide on the most
appropriate response, information is crucial to the success of any product. Manufacturers that
efficiently manage their products along the product life cycle curve are usually those that
have developed the most effective information systems.

Most manufacturers accept their products will have a limited life. While there may not be
much they can do to change that, by focusing on the key business areas mentioned, product
life cycle management allows them to make sure that a product will be as successful as
possible during its life cycle stages, however long that might be

Service Operations

Services operations often encounter different opportunities and challenges than tangible
goods, and thus require unique operational considerations.

Services Defined

An easy way to remember what a service is (compared to a product) is through using the ‘5
I’s of Services’:

1. Intangibility – Services cannot be touched, shipped, handled, or looked at. They are an
occurrence, not a tangible good.
2. Inventory – Services cannot be stored for later use. They occur, or they do not occur.
3. Inseparability – Services cannot be pulled into different parts or separated (as many
tangible goods can be—which makes operations management quite different for
products).
4. Inconsistency – Services tend to be unique. A teacher may teach you a topic, and
another teacher may teach you the same topic in another course. Each teacher will
deliver this topic somewhat differently. This is a good example of service
inconsistency.
5. Involvement – Consumers are often directly involved in the service delivery. A
therapist is a good example of this. The consumer is the center of the service, and thus
each instance of the service is unique based on the individual involved.

Managing Service Operations

This definition offers a great deal of insight when applied to the concept of operational
management. Without a tangible good to ship, handle and produce, operational managers are
instead focused on the execution of an activity to fill a consumer need. This management of
an instance is rather different than the management of a product.

Managing operations is just as critical on the service side as it is on the product side. While
there are countless considerations to be made, many of which are unique to specific
organizations or industries, these core operational decisions are strong indications of the
mentality service management specialists consider:

Location

Choosing where to open a facility, how to lay out the facility, what size is appropriate, and
overall how efficiently a given space can be used relative to the cost are key considerations.
Consider a car mechanic opening a garage. Depending upon how many jobs she anticipates
having within a given period of time, and how many employees she expects to be able to
manage simultaneously, she may want to open a facility with three garages or five garages. It
really depends on how much output she expects she can accomplish, and how much input
demand will provide.

Scheduling

Just as a product manufacturing facility will know when a product will be where, so too do
service operators need to know when a given service should start and what duration of time is
required to complete it. Maximizing output through planning properly can minimize
opportunity costs and maximize revenue, and plays an integral role in operational
management of services. Take a doctor’s office. If they simply had everyone come in
whenever they wanted, there would be times when the staff would have nothing to do (but be
obligated to be there, and be paid), and other times when there would be too much to do and
capital and customers would be lost.

Quality

As the ‘5 I’s of Services’ indicate, most services tend to be completely unique. A hair dresser
rarely gives the same haircut twice and, even if they do, it would be cut to fit a different
individual. As a result, managing for high quality output is rather complex. Each execution is
measured relative to the specific instance and that specific consumer, making tools like NPS
surveys and other measures of individual satisfaction highly useful in optimizing. Following
these ratings, operational specialists must consider the comments received and work to find a
way to integrate this feedback into future services.

Competitive Analysis : Definition: Identifying your competitors and evaluating their

strategies to determine their strengths and weaknesses relative to those of your own product
or service. A competitive analysis is a critical part of your company marketing plan.

Service management software used in SLM lets manufacturers plan their service resources. It
also helps them to efficiently handle responsibilities, partners and costs of offered services.
These solutions also empower staff by making additional actionable data promptly available,
both in the office and in the field.

SLM includes the following vital elements:

 Workforce administration
 Components planning and forecasting
  Enterprise asset management
 Reverse logistics
 Knowledge administration
 Contract management
 Returns and repair management

Backward integration refers to the process in which a company purchases or internally

produces segments of its supply chain. In other words, it is the acquisition of controlled
subsidiaries aimed at the creation or production of certain inputs that could be utilized in the
production. This backward movement is initiated to ensure supply along with securing
bargaining leverage on vendors.

Backward integration is a well-known competitive strategy. Through the control of more of

its supply chain, an organization can bring down the costs as well as guarantee access to key
materials. Moreover, it can also manipulate competitors in an indirect manner through
affecting how they access their raw materials. In certain cases, a number of companies might
join hands for purchasing and controlling a supplier

Advantages of Backward Integration

Backward integration brings in the following benefits for organizations:

 Increased control: Through the process of integrating backward, companies can control
their value chain in a more efficient manner. When retailers take the decision to develop
or acquire a manufacturing business, they attain increased control over the production
segment of the distribution phase.

 Cost Control: Through backward integration, costs can be considerably controlled all
along the distribution process. In the conventional distribution process, each phase of
product movement includes mark-ups to enable the reseller to earn profit

By direct sale to end buyers, manufacturers are able to do away with the middle man
through removal of one or more mark-up steps in the course. In other words, a single
entity controlling the entire distribution process brings in enhanced capability leading to
optimization of resource utilization. Transportation costs are lowered, and other wasted
costs can be avoided.

 Competitive Advantages: Some companies adopt backward integration in order to

block competitors from gaining any access to important markets or scarce resources.
For instance, a retailer might purchase a manufacturing company and have access to
proprietary technology as well as resources or patents that are solely available in the
local area of the firm.

 Differentiation: Backward integration allows companies to access an increasing number

of production inputs and distribution resources. By effectively leveraging these
opportunities, the company can stand out from the competition through efficient
marketing. A retailer is able to cater to the changing customer needs more rapidly if it
owns the production or manufacturing firm that produces its products

Limitation of Back ward integration :

 It builds up excess upstream capacity to ensure that downstream has an adequate
supply even when the demand is heavy. This involves increased investment.

 The process leads to lack of supplier competition that will lead to low efficiency resulting
in potentially higher costs.

 In due course, there are high chances that the flexibility will get reduced owing to
previous investments upstream and also downstream.

 In case there is a need for substantial in-house requirements, then it will diminish the
capability of producing the product variety.

 At certain times, existing competencies need to be sacrificed in order to develop fresh

core competencies
 Unit-2

A facility analysis : may be defined as any physical structure that an institution re- quires for
its programs and related activities. The term includes parking areas, buildings, parks, rooms,
service areas, agricultural fields, outdoor playing.

Facility location is the process of determining a geographic site for a

firm's operations. Managers of both service and manufacturing organizations must weigh
many factors when assessing the desirability of a particular site, including proximity to
customers and suppliers, labor costs, and transportation costs

Factors Influencing Facility Location

If the organization can configure the right location for the manufacturing facility, it will have
sufficient access to the customers, workers, transportation, etc. For commercial success, and
competitive advantage following are the critical factors:

Customer Proximity: Facility locations are selected closer to the customer as to reduce
transportation cost and decrease time in reaching the customer.

Business Area: Presence of other similar manufacturing units around makes business area
conducive for facility establishment.

Availability of Skill Labor: Education, experience and skill of available labor are another
important, which determines facility location.

Free Trade Zone/Agreement: Free-trade zones promote the establishment of manufacturing

facility by providing incentives in custom duties and levies. On another hand free trade
agreement is among countries providing an incentive to establish business, in particular,
country.

Suppliers: Continuous and quality supply of the raw materials is another critical factor in
determining the location of manufacturing facility.

Environmental Policy: In current globalized world pollution, control is very important,

therefore understanding of environmental policy for the facility location is another critical
factor.

Facility Layout Objective

A model facility layout should be able to provide an ideal relationship between raw material,
equipment, manpower and final product at minimal cost under safe and comfortable
environment. An efficient and effective facility layout can cover following objectives:

 To provide optimum space to organize equipment and facilitate movement of goods

and to create safe and comfortable work environment.
 To promote order in production towards a single objective
 To reduce movement of workers, raw material and equipment
 To promote safety of plant as well as its workers
 To facilitate extension or change in the layout to accommodate new product line or
technology upgradation
  To increase production capacity of the organization

An organization can achieve the above-mentioned objective by ensuring the following:

 Better training of the workers and supervisors.

 Creating awareness about of health hazard and safety standards
 Optimum utilization of workforce and equipment
 Encouraging empowerment and reducing administrative and other indirect work

Factors affecting Facility Layout

Facility layout designing and implementation is influenced by various factors. These factors
vary from industry to industry but influence facility layout. These factors are as follows:

 The design of the facility layout should consider overall objectives set by the
organization.
 Optimum space needs to be allocated for process and technology.
 A proper safety measure as to avoid mishaps.
 Overall management policies and future direction of the organization

Design of Facility Layout

Principles which drive design of the facility layout need to take into the consideration
objective of facility layout, factors influencing facility layout and constraints of facility
layout. These principles are as follows:

 Flexibility: Facility layout should provide flexibility for expansion or modification.

 Space Utilization: Optimum space utilization reduces the time in material and people
movement and promotes safety.
 Capital: Capital investment should be minimal when finalizing different models of
facility layout.

Design Layout Techniques

There are three techniques of design layout, and they are as follows:

1. Two or Three Dimensional Templates: This technique utilizes development of a

scaled-down model based on approved drawings.
2. Sequence Analysis: This technique utilizes computer technology in designing the
facility layout by sequencing out all activities and then arranging them in circular or
in a straight line.
3. Line Balancing: This kind of technique is used for assembly line.

Types of Facility Layout

There are six types of facility layout, and they are as follows:

 Line Layout
 Functional Layout
 Fixed Position Layout
  Cellular Technology Layout
 Combined Layout, and
 Computerized Relative Allocation of Facility Technique

Meaning and Definition of Plant Layout:

Plant layout is the most effective physical arrangement, either existing or in plans of

industrial facilities i.e arrangement of machines, processing equipment and service

departments to achieve greatest co-ordination and efficiency of 4M’s (Men, Materials,

Machines and Methods) in a plant.

Layout problems are fundamental to every type of organisation/enterprise and are

experienced in all kinds of concerns/undertakings.

The adequacy of layout affects the efficiency of subsequent operations. It is an important pre-

requisite for efficient operations and also has a great deal in common with many problems.

Once the site of the plant has been decided, the next important problem before the

management of the enterprise is to plan suitable layout for the plant.

Definitions:

According to James Lundy, “Layout identically involves the allocation of space and the

arrangement of equipment in such a manner that overall operating costs are

minimized.”
Need of Plant Layout:

Many situations give rise to the problem of plant layout. Two plants having similar

operations may not have identical layouts. This may be due to size of the plant, nature of the

process and management’s calibre.

The necessity of plant layout may be felt and the problem may arise when:
(i) There are design changes in the product.

(ii) There is an expansion of the enterprise.

(iii) There is proposed variation in the size of the departments.

(iv) Some new product is to be added to the existing line.

(v) Some new department is to be added to the enterprise and there is reallocation of the
existing department.

(vi) A new plant is to be set up.

Importance of Plant Layout:

The layout of a plant is quite important in view of the above definition but the importance of
a layout may greatly vary from industry to industry.

Objectives of Good Plant Layout:

A good rather an optimum layout is one which provides maximum satisfaction to all
concerned i.e. shareholders, management employees and consumers.

The objectives of a good layout are as follows:

(i) Should provide overall satisfaction to all concerned.

(ii) Material handling and internal transportation from one operation to the next is minimized
and efficiently controlled.

(iii) The production bottle necks and points of congestions are to be eliminated so that input
raw materials and semi-finished parts move fast from one work station to another.

(iv) Should provide high work in process turnover.

(v) Should utilize the space most effectively; may be cubical utilization.

(vi) Should provide worker’s convenience, promote job satisfaction and safety for them.

(vii) Should avoid unnecessary investment of capital.

(viii) Should help in effective utilization of labour.

(ix) Should lead to increased productivity and better quality of the product with reduced
capital cost.

(x) Should provide easy supervision.

(xi) Should provide space for future expansion of the plant.

(xii) Should provide proper lighting and ventilation of the areas of work stations

Factors Affecting Plant Layout:

Whatever be the type of layout being contemplated the following factors are to be considered
because these factors have got significant influence on the design of the layout.

(i) Man Factor:

The man is very flexible element who can be made suitable for all sort of layouts.

Main considerations are as follows:

(i) Safety and working conditions.

(ii) Man power requirements-skill level of workers, their number required and their training
programme.

(iii) Man power utilization in the plant.

(iv) Human relations.

(ii) Material Factor:

It includes the various input materials like raw materials, semi-finished parts, and materials in
process scrap, finished products, packing materials, tools and other services.

The main considerations are:

(i) Design and specifications of the product to be manufactured.

(ii) Quantity and variety of products and materials.

(iii) Physical and chemical characteristics of various inputs materials.

(iv) Component parts or material and their sequence of operations i.e. how they go together to
generate the final product.

(iii) Machinery Factor:

The operating machinery is also one of the most important factors therefore all the
information regarding equipment and the tools are necessary for inspection, processing and
maintenance etc.

(i) The processes and methods should be standardized first.

(ii) Machinery and tools selections depend upon the type of process and method, so proper
machinery and other supporting equipment should be selected on the basis of volume of
production.

(iii) Equipment utilization depends on the variation in production, requirements and operating
balance.

(iv)Machines should be used to their optimum levels of speed, feed and depth of cut.

(v) Machinery requirement is mostly based on the process/method.

(v) Maintenance of machines and replacement of parts is also important.

(iv) Movement Factor:

It mainly deals with the movement of men and materials. A good layout should ensure short

moves and should always tend towards completion of product. It also includes
interdepartmental movements and material handling equipment. This includes the flow

pattern reduction of unnecessary handling, space for movement and analysis of handling

methods.

(v) Waiting Factor:

Whenever material or men is stopped, waiting occurs which costs money. Waiting cost
includes handling cost in waiting area, money tied up with idle material etc.

Waiting may occur at the receiving point, materials in process, between the operations etc.

The important considerations in this case are:

(a) Location of storage or delay points.

(b) Method of storing.

(c) Space for waiting.

(d) Safeguard equipment for storing and avoiding delay.

(vi) Service Factor:

It includes the activities and facilities for personnel such as fire protection, lighting, heating

and ventilation etc. Services for material such as quality control, production control, services

for machinery such as repair and maintenance and utilities like power, fuel/gas and water

supply etc.

(vii) Building Factor:

It includes outside and inside building features, shape of building, type of building (single or

multi-storey) etc.

(viii) Flexibility Factor:

This includes consideration due to changes in material, machinery, process, man, supporting

activities and installation limitations etc. It means easy changing to new arrangements or it

includes flexibility and expendability of layouts.

Types of Plant Layout:

Production results from men, materials and machinery together with management. The

characteristics are changed. To manufacture a product layout begins with which element or

elements mentioned above move.

Keeping in view the type of industry and volume of production, the type of layout to be

selected is to be decided from the following:

1. Product or Line Layout.

2. Process or Functional Layout.

3. Fixed Position Layout.

4. Combination type of Layout.

1. Product or Line Layout:

If all the processing equipment and machines are arranged according to the sequence of

operations of a product, the layout is called product type of layout. In this type of layout, only

one product or one type of products is produced in an operating area. This product must be

standardized and produced in large quantities in order to justify the product layout.

The raw material is supplied at one end of the line and goes from one operation to the next

quite rapidly with a minimum work in process, storage and material handling. Fig. 3.3 shows

product layout for two types of products A and B.

Advantages offered by Product Layout:

(i) Lowers total material handling cost.

(ii) There is less work in process.

(iii) Better utilization of men and machines.

(iv) Less floor area is occupied by material in transit and for temporary storages.

(v) Greater simplicity of production control.

(v) Total production time is also minimized.

Limitations of Product Layout:

(i) No flexibility which is generally required is obtained in this layout.

(ii) The manufacturing cost increases with a fall in volume of production.

(iii) If one or two lines are running light, there is a considerable machine idleness.

(iv) A single machine breakdown may shut down the whole production line,

(v) Specialized and strict supervision is essential.

2. Process or Functional Layout:
The process layout is particularly useful where low volume of production is needed. If the
products are not standardized, the process layout is more desirable, because it has greater
process flexibility than other. In this type of layout the machines are not arranged according
to the sequence of operations but are arranged according to the nature or type of the
operations.

This layout is commonly suitable for non-repetitive jobs. Same type of operation facilities are
grouped together such as lathes will be placed at one place all the drill machines are at
another place and so on. See Fig. 3.4 for process layout. Therefore, the process carried out in
any area is according to the machine available in that area.

Advantages of Process Layout:

(i) There will be less duplication of machines. Thus total investment in equipment purchase
will be reduced.

(ii) It offers better and more efficient supervision through specialization at various levels.
(iii) There is a greater flexibility in equipment and man power thus load distribution is easily
controlled.

(iv) Better utilization of equipment available is possible.

(v) Breakdown of equipment can be easily handled by transferring work to another machine/
work station.

(vi) There will be better control of complicated or precision processes, especially where much
inspection is required.

Limitations of Process Layout:

(i) There are long material flow lines and hence the expensive handling is required.

(ii) Total production cycle time is more owing to long distances and waiting at various points.

(iii) Since more work is in queue and waiting for further operation hence bottlenecks occur.

(iv) Generally more floor area is required.

(v) Since work does not flow through definite lines, counting and scheduling is more tedious.

(v)Specialization creates monotony and there will be difficulty for the laid workers to find job
in other industries.

3. Fixed Position Layout:

This type of layout is the least important for today’s manufacturing industries. In this type of
layout the major component remain in a fixed location, other materials, parts, tools,
machinery, manpower and other supporting equipment are brought to this location.

The major component or body of the product remains in a fixed position because it is too
heavy or too big and as such it is economical and convenient to bring the necessary tools and
equipment’s to work place along-with the man power. This type of layout is used in the
manufacture of boilers, hydraulic and steam turbines and ships etc.

Advantages Offered by Fixed Position Layout:

(i) Material movement is reduced

(ii) Capital investment is minimized

(iii) The task is usually done by gang of operators, hence continuity of operations is ensured

(iv) Production centres are independent of each other. Hence effective planning and loading
can be made. Thus total production cost will be reduced and

(v) It offers greater flexibility and allows change in product design, product mix and
production volume.

Limitations of Fixed Position Layout:

(i) Highly skilled man power is required.

(ii) Movement of machines equipment’s to production centre may be time consuming.

(iii) Complicated fixtures may be required for positioning of jobs and tools. This may
increase the cost of production.

4. Combination Type of Layout:

Now days in pure state any one form of layouts discussed above is rarely found. Therefore
generally the layouts used in industries are the compromise of the above mentioned layouts.
Every layout has got certain advantages and limitations therefore, industries would not like to
use any type of layout as such.

Flexibility is a very important factor, so layout should be such which can be moulded
according to the requirements of industry, without much investment. If the good features of
all types of layouts are connected, a compromise solution can be obtained which will be more
economical and flexible.

Principles of Plant Layout:

According to Muther there are six basic principles of “best layout”.

These are:
(i) Principle of Overall Integration:
According to this principle the best layout is one which provides integration of production
facilities like men, machinery, raw materials, supporting activities and any other such factors
which result in the best compromise.

(ii) Principle of Minimum Distance:

According to this principle the movements of men and materials should be minimized.

(iii) Principle of Flow:

According to Muther, the best layout is one which arranges the work station for each
operation process in same order or sequence that forms treats or assembles the materials.

(iv) Principle of Cubic Space Utilization:

According to this, the best layout utilizes cubic space i.e. space available both in vertical and
horizontal directions is most economically and effectively utilized.

(v) Principle of Satisfaction and Safety:

According to this principle best layout is one which provides satisfaction and safety to all
workers concerned.

(vi) Principle of Flexibility:

In automotive and other allied industries where models of products change after sometime the
principle of flexibility provides adoption and rearrangement at a minimum cost and least
inconvenience.
Advantages of a Good Plant Layout:
The advantages expressed by Mallick and Gandeau are as follows:
To the Worker:
(i) Reduces the effort of the worker.

(ii) Reduces the number of handlings.

(iii) Extends the process of specialization.

(iv) Permits working at optimum conditions by eliminating congestions.

(v) Produces better working conditions by eliminating congestions.

(vi) Reduces the number of accidents.

(vii) Provides better employee service facilities/conditions.

(viii) Provides basis for higher earning for employees.

In Labour Cost:
(i) Increases the output per man-hour.

(ii) Reduces set up time involved.

(iii) Reduces the number of operations or some operations may be combined.

(iv) Reduces the number of handlers. Thus reducing labour cost.

(v) Reduces the length of hauls.

(vi) Reduces lost motions between operations.

(vii) Converts operator into a producer instead of a handler by eliminating the various
unnecessary movements.

In Other Manufacturing Costs:

(i) Reduces the cost of expensive supplies.

(ii) Decreases maintenance costs.

(iii) Decreases tool replacement costs.

(iv) Effects a saving in power loads.

(v) Decreases spoilage and scrap. Thus waste is minimized

(v) Eliminates some of the waste in raw material consumption.

(vii) Improves the quality of the product by decreasing handling.

(viii) Provides better cost control.

In the Manufacturing Cycle:

(i) Shortens the moves between work-stations.

(ii) Reduces the manufacturing cycle in each department.

(iii) Reduces the length of the travel by the product for completion.

(iv) Reduces the overall time of manufacturing the product.

In Production Control:
(i) Facilitates receipts, shipments and delivery of inputs and finished goods.

(ii) Provides adequate and convenient storage facilities.

(iii) Permits the maximum possible output with same input.

(iv) Paces production & determines production flow.

(v) Makes production time predictable.

(vi) Makes scheduling and dispatching automatic.

(vii) Sets up production centre & permits straight line layout by products for mass
production.

(viii) Permits layout by process for job order manufacturing.

(ix) Moves work in process by most direct lines.

(x) Reduces the number of lost or mishandled parts leading to waste minimization.

(xi) Reduces the paper work for production control & reduces the number of stock chasers.
Thus reduces production control expenses.

In Supervision:
(i) Tends to ease the burden of supervision.

(ii) Determines the supervisory control.

(iii) Reduces the cost of supervision process.

(iv) Reduces cost of piece counts.

(v) Decreases the amount of inspection involved.

In Capital Investment:
(i) Holds permanent investment at its minimum level.
(ii) Keeps the plant from becoming obsolete before it is worn out.

(iii) Reduces the investment in machinery and equipment by

(a) Increasing the production per machine.

(b) Utilizing idle machine time.

(c) Reducing the number of operations per machine.

(iv) Maintains a proper balance of departments.

(v) Eliminates wasted aisle space.

(vi) Reduces the capital investment by proper space utilization of material handling
equipment required.

(vii) Reduces the inventory level of work in process and of finished product.

Cellular Manufacturing Layout :

Cellular manufacturing is a manufacturing process that produces families of parts within a

single line or cell of machines operated by machinists who work only within the line or cell.
A cell is a small scale, clearly-defined production unit within a larger factory. This unit has
complete responsibility for producing a family of like parts or a product. All necessary
machines and manpower are contained within this cell, thus giving it a degree of operational
autonomy. Each worker is expected to have mastered a full range of operating skills required
by his or her cell. Therefore, systematic job rotation and training are necessary conditions for
effective cell development. Complete worker training is needed to ensure that flexible worker
assignments can be fulfilled.
Cellular manufacturing, which is actually an application of group technology, has been
described as a stepping stone to achieving world class manufacturing status. The objective of
cellular manufacturing is to design cells in such a way that some measure of performance is
optimized. This measure of performance could be productivity, cycle time, or some other
logistics measure. Measures seen in practice include pieces per man hour, unit cost, on-time
delivery, lead time, defect rates, and percentage of parts made cell-complete.
This process involves placing a cluster of carefully selected sets of functionally dissimilar
machines in close proximity to each other. The result is small, stand-alone manufacturing
units dedicated to the production of a set or family of parts—or essentially, a miniature
version of a plant layout.
While the machinery may be functionally dissimilar, the family of parts produced contains
similar processing requirements or has geometric similarities. Thus, all parts basically follow
the same routing with some minor variations (e.g., skipping an operation). The cells may
have no conveyorized movement of parts between machines, or they may have a flow line
connected by a conveyor that can provide automatic transfer.
Cellular manufacturing is a hybrid system that links the advantages of a job shop with the
product layout of the continuous flow line. The cell design provides for quick and efficient
flow, and the high productivity associated with assembly lines. However, it also provides the
flexibility of the job shop, allowing both similar and diverse products to be added to the line
without slowing the process

A lean method of producing similar products using cells, or groups of team members,
workstations, or equipment, to facilitate operations by eliminating setup and unneeded costs
between operations. Cells might be designed for a specific process, part, or a complete
product. They are favorable for single-piece and one-touch production methods and in the
office or the factory. Because of increased speed and the minimal handling of materials, cells
can result in great cost and time savings and reduced inventory.

Cellular design often uses group technology, which studies a large number of components
and separates them into groups with like characteristics, sometimes with a computer's help,
and which requires the coding of classifications of parts and operations.

Cellular design also uses families-of-parts processing, which groups components by shape
and size to be manufactured by the same people, tools, and machines with little change to
process or setup.

Some of the advantages of cellular manufacturing include:

 Cost. Cellular manufacturing provides for faster processing time, less material
handling, less work-in-process inventory, and reduced setup time, all of which reduce
costs.
 Flexibility. Cellular manufacturing allows for the production of small batches, which
provides some degree of increased flexibility. This aspect is greatly enhanced with
FMSs.
 Motivation. Since workers are cross-trained to run every machine in the cell, boredom
is less of a factor. Also, since workers are responsible for their cells' output,
more autonomy and job ownership is present

Hybrid layout is a layout that is a combination of three main manufacturing layouts. The
three main manufacturing layouts are product layout, process layout, and fixed-
position layout. ... In flexible manufacturing, you have machines that are capable of
producing a variety of products