LESSON 6 3. What is the expected volume of output?
PROCESS SELECTION AND FACILITY
LAYOUT
> BASIC DECISIONS MANAGERS MUST MAKE
- PRODUCT AND SERVICE CHOICES
- PROCESS SELECTION
- CAPACITY PLANNING
- LOCATION AND LAYOUT CHOICES
> PROCESS SELECTION
-refers to the way production of
goods/services is organized. It occurs as a matter of
course when new products/services are being
planned.
*However, it also occurs periodically due to
technological changes in equipment.
> KEY ASPECTS OF PROCESS STRATEGY
1. MAKE-OR-BUY DECISIONS - extent to which
the organization will produce goods/services in-
house as opposed to relying on outside.
2. CAPITAL INTENSITY - mix of equipment and
labor to be used by the organization
3. PROCESS FLEXIBILITY - degree to which the
system can be adjusted to changes in processing
requirements due to such factors such as changes
in: product/service design, volume processed, and
technology
MAKE OR BUY DECISIONS
> FACTORS CONSIDERED IN ‘MAKE OR BUY
DECISIONS
* AVAILABLE CAPACITY
* EXPERTISE
* QUALITY CONSIDERATIONS
* NATURE OF DEMAND
* COST
PROCESS SELECTION
> 3 PRIMARY QUESTIONS BEAR ON PROCESS
SELECTION
1. How much variety in products/services will the
system need to handle?
2. What degree of equipment flexibility will be
needed?
> 5 PROCESS TYPES
1. JOB SHOP
-It usually operates on a relatively small
scale.
-process type used when a low volume of
high-variety of goods/services will be needed.
-Processing is intermittent (occurring at
irregular intervals).
-Work shifts from one small job to another,
each with somewhat different processing
requirements.
-High flexibility of equipment and skilled
workers are its important characteristics.
2. BATCH
-It is used when moderate volume of
goods/services is desired.
-It can handle a moderate variety in
products/services.
-Equipment need will not be as flexible as in
a job shop, but its processing is still intermittent.
-There is less variety in the jobs being
processed.
3. REPETITIVE
- It is used when higher volumes of more
standardized goods/services are needed.
- Standardized output means only slight
flexibility of equipment is needed.
-Skill of workers is generally low.
-This process type is also referred to as
assembly.
4. CONTINUOUS
-This system is used when a very high
volume of highly standardized output is desired.
-It has almost no variety in output and,
hence, no need for equipment flexibility.
-As in assembly systems, workers are
generally low skilled.
5. PROJECT
-It is used for work that is nonroutine.
-It has unique set of objectives to be
accomplished in a limited time frame.
-Equipment flexibility and worker skills can
range from low to high (it may vary).
AUTOMATION
- AUTOMATION is a 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.
- Automated services are also an option. Although
not as plentiful as manufacturing, these are
becoming increasingly important.
> ADVANTAGES OF AUTOMATION
*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 production setting, variability is detrimental to
quality and to meeting schedules.
*Machines do not get bored or distracted, nor do
they go out for strike, ask for higher wages, or file
labor grievances.
*Reduction of variable cost.
> TYPES OF AUTOMATION
1. FIXED AUTOMATION
-It is the most rigid among three types.
-This concept was perfected by Ford Motor
Company (1900s), and it has been the cornerstone
of mass production in the auto industry.
-sometimes referred to as Detroit-type
Automation.
-It uses high-cost, specialized equipment for
a fixed sequence of operations.
*ADVANTAGES: Low cost and high volume.
*LIMITATIONS: Minimal variety and high cost of
making major changes in product/process.
2. PROGRAMMABLE AUTOMATION
-This type is at the opposite end of the
spectrum (least rigid among three types).
-It involves the use of high-cost, general-
purpose equipment controlled by a computer
program that provides both sequence of operations
and specific details about each operation.
-It has capability and economically producing
fairly wide variety of low-volume products in small
batches.
=COMPUTER-AIDED MANUFACTURING (CAM)
-It refers to the use of computers in process
control, ranging from robots to automated quality
control
=NUMERICALLY CONTROLLED MACHINES
(N/C)
-These 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
=ROBOT
-It is a machine consisting of three parts: a
mechanical arm, a power supply, and a controller,
which can be powered pneumatically (air-driven),
hydraulically (fluid under pressure), or electronically.
3. FLEXIBLE AUTOMATION
-This type is an evolution from
programmable automation, because it uses
equipment that is more customized than the
programmable automation.
-It requires significantly less change over
time.
-In practice, flexible automation is used in
several different formats.
=MANUFACTURING CELL
-It consists of one or a small number of
computer-controlled machines that produce a family
of similar parts. The machines may be linked with
automatic material handing devices.
FLEXIBLE MANUFACTURING SYSTEM (FMS)
-It is a group of machines that is designed to
handle intermittent processing requirements and
produce a variety of similar products through
reprogrammable controllers.
-Systems may range from 3 or 4 machines to more
than a dozen.
COMPTER-INTEGRATED MANUFACTURING
(CIM)
-It is a system that uses an integrating computer
system to link a broad range of manufacturing
activities.
-It might be as simple as linking two or more FMSs
by a host computer.
-The overall goal of CIM is to link various parts of
an organization to achieve rapid response to
customer orders and/or product changes.
SERVICE PROCESS DESIGN
-SERVICE PROCESS DESIGN focuses on service
delivery system (i.e. facilities, processes, personnel
requirements).
-Service design has important implications for cost,
quality, productivity, customer satisfaction, and
competitive advantage.
-Service process design (or redesign) often begins
with SERVICE BLUEPRINTING.
> SERVICE BLUEPRINTING
-It is a method for describing and analyzing
a service process.
-The key aspect of service blueprinting is
flowcharting the process.
-Flowcharting the process helps to
understand the process, and the resulting flowchart
provides a visual model of the process.
>6 MAJOR STEPS IN SERVICE BLUEPRINTING
1. Establish boundaries for the process and decide
on the level of detail that will be needed.
2. Identify the steps involved and describe them.
3. Prepare a flowchart of major process steps.
4. Identify potential failure points.
5. Establish a time frame for service execution and
an estimate of variability in processing the
requirements.
6. Analyze profitability.

LAYOUT

- LAYOUT refers to the configuration of

departments, work centers, and equipment, with
particular emphasis on movement of work through
U-Shaped Production Line
the system.
-Like in other areas of system design, layout
2. PROCESS LAYOUT
decisions are important for three basic
-It is designed to process items or provide
reasons:
services that involve variety of processing
requirements.
1. They require substantial investments of money
-Variety of jobs that are processed requires
and effort;
frequent adjustments to equipment that causes for
2. They involve long-term commitments, which
the process to be intermittent and discontinuous.
makes mistakes difficult to overcome; and
-The use of general-purposed equipment
3. They have a significant impact on the cost and
(GPE) provides the flexibility necessary to handle
efficiency of operations.
wide range of processing requirements.
-A manufacturing example of this type of
>BASIC TYPES OF LAYOUT
layout is a machine shop. On the other hand, its
service examples are hospitals, colleges and
1. SERVICE/PRODUCT LAYOUT
universities, and banks.
-It is a type of layout that uses standardized
processing operations to achieve smooth, rapid,
3. FIXED-POSITION LAYOUT
high-volume flow.
-It is a type of layout, wherein the product or
-In this type, the work is divided into series
project being working on remains stationary, and,
of standardized tasks, permitting specialization of
therefore, its workers, materials, and equipment are
both labor and equipment.
moved about as needed.
-Its resulting arrangement usually forms a
-It is usually used in large construction
production line or assembly line, depending on the
projects (e.g. buildings, power plants, etc.).
activity involved.
-This type of layout is widely used for
-It achieves a high degree of labor and
farming, firefighting, road building, home building,
equipment utilization, leading to offset their high
remodeling and repair, and drilling for oil.
equipment costs.

1. Warehouse and storage layouts – issue:
frequency of orders
2. Retail layouts – issue: traffic patterns and traffic
flows
3. Office layouts – issue: information transfer,
openness
Preventive maintenance – periodic inspection
and replacement of worn parts or those with high
value rates.
U-SHAPED LAYOUT - Unlike straight-line layout,
U-shaped layout is more compact; it often requires
approximately half of the length of straight
production line
-It also permits increased communication
among workers on the line.
-Flexibility in work assignments is increased
because workers can handle not only adjacent
stations, but also those on opposite sides of the line.
-It minimizes material handling, because the
point of entry of material is the same point in the
exit of the finished goods.
4. CELLULAR LAYOUT
-It is the actual organization of a department
so that similar products are manufactured together.
The most effective cells manufacture a small portion
of similar products and contain all the needed
equipment and supplies to complete the process for
that cell.
CELL- group of machines that
becomes miniature versions of
product layouts
GROUP TECHNOLOGY
-the grouping into part families of items
with similar design or manufacturing
characteristics.
FLEXIBLE MANUFACTURING
SYSTEMS- are more fully automated
versions of cellular manufacturing.
5. COMBINATION LAYOUTS
-It is possible where an item is being made
in different types and sizes.
-It is useful when several items are produced
in same sequence but none of the items are to be
produced in bulk and thus no item justifies for an
individual and independent production line.
>OTHER SERVICE LAYOUTS
 WAREHOUSE AND STORAGE LAYOUTS
-The design of facilities presents a different set of
factors than the design of factory layouts.
-Its considerations include the frequency of order,
number and widths of aisles, the height of storage
racks, rail and/or truck loading and unloading, and
the need of periodically make a physical count of
stored items.
 RETAIL LAYOUTS
-Retail layouts such as supermarkets and
convenience stores, need the presence of the
customers and opportunity to influence sales
volume.
-Traffic patterns and traffic flow are important
factors to consider.
-Advantages in acquiring standardized retail layouts
include ability to save time and money by using one
layout than a customized one. It also avoids
possible confusion to customers who visit more than
one store
 OFFICE LAYOUTS
-These are undergoing transformations as the flow
of paperwork is replaced with the increasing use of
electronic communications.
-There is less need to place office workers in a layout
that optimizes the physical transfer of information or
paperwork.
-Another trend is to create an image of openness.
DESIGNING SUPERMARKETS
This is how supermarkets is designed to maximize
their sales.
1. On the Edge
2. Space Eaters
3. The Meating Place
4. Going to the Dairy
5. Paying for Space
6. In “Prison”
7. Productive Produce