DESIGNING PRODUCT LAYOUTS

(ASSIGNMENT # 03 SEMESTER 6TH -2020)

SUBMISSION DATE (JULY 26, 2020)
BY
UMAR FAROOQ
ROLL # 17460920-145
MGT-407 (PRODUCTION AND OPERATION MANAGEMENT)
BBA 6TH (A)

SUBMITTED TO BADAR MUNIR MANJK

DEPARTMENT OF MANAGEMENT SCIENCES (FMAS)

UNIVE
RSITY OF GUJRAT
 DESIGNING PRODUCT LAYOUTS
The objective in designing process layouts is to place resources close together based on the need
for proximity. This need could stem from the number of trips that are made between these
resources or from other factors, such as sharing of information and communication. Product
layouts are completely different from process layouts. In product layouts, the material moves
continuously and uniformly through a sequence of operations until the work is completed. The
sequence of operations allows for the simultaneous performance of work. When designing
product layouts, our objective is to decide on the sequence of tasks to be performed by each
workstation. To accomplish this we need to consider the logical order of the tasks to be
performed and the time required to perform each task. In addition, we need to consider the speed
of the production process, which will tell us how much time there is at each workstation to
perform the assigned tasks. This entire process is called line balancing. Next, we will go through
the steps that must be followed in designing product layouts.

 Line Balancing
The process of assigning tasks to workstations in a product layout in order to achieve a desired
output and balance the workload among stations.
Step 1: Identify Tasks and Their Immediate Predecessors
The first step in designing product layouts is to identify the tasks or work elements that must be
performed in order to produce the product. We also need to determine how long each task takes
to perform and which tasks must be performed in sequence. The task or tasks that must be
performed immediately before another task can be done are called the task's immediate
predecessor. We use an example to illustrate this point.
 Immediate predecessor
A task that must be performed immediately before another task.
Step 2: Determine Output Rate
The next step is to determine how many units of product we wish to produce over a period,
called the output rate. Then we can design a product layout that produces the desired number of
units with as few work centers as possible and balance the workload at each workstation. In our
example, Vicki has decided that she wishes to produce 60 pizzas per hour in order to meet her
growing demand.
 Output rate
The number of units we wish to produce over a specific period.
For example:
Notice that the total task time to produce one pizza is 165 seconds. If Vicki wants to perform all
nine-work elements herself, her maximum output in 1 hour would be:

Step 3: Determine Cycle Time

Cycle time is the maximum amount of time each workstation has to complete its assigned tasks.
Cycle time also tells us how frequently a product is completed. Recall that in product layouts
work is being performed on many workstations that are arranged in sequence. At the beginning
of the line, workers are carrying out the initial stages of putting the product together. At the end
of the line, the last steps of production are being completed. If you were to stop the process at
any one point in time, you would find products at all stages of production, from raw materials
through work-in-process, as well as completed products.
Step 4: Compute the Theoretical Minimum Number of Stations
Before we decide to assign specific tasks to workstations, it is usually helpful to compute the
theoretical minimum number of stations, or TM. The theoretical minimum number of
stations is the number of workstations that would be needed if the line were 100 percent
efficient. Rarely do we achieve 100 percent efficiency, and often we will have more stations than
the theoretical minimum. However, computing this number gives us a baseline for the number of
stations we should have. 

Step 5: Assign Tasks to Workstations (Balance the Line)

Given the tasks we have to perform and their precedence relationships as well as the cycle time,
we can now proceed to assign tasks to workstations. To do this, a number of rules can be used at
this stage. We will use the longest task time rule, which states that when selecting from a group
of tasks we should pick the task that takes the longest time. However, in practice a number of
other rules can be used.
 Efficiency
The ratio of total productive time divided by total time, given as a percentage.

Note that in this equation the numerator is the actual work time, whereas the denominator is the
time allocated for performing tasks. To improve efficiency, we try to assign as much work to the
lowest number of workstations needed to produce the volume of product desired while keeping
the workloads balanced.
 Balance delay
The amount by which the line efficiency falls short of 100 percent.
Often it is helpful to compute the amount by which the efficiency of the line falls short of 100
percent. Called the balance delay, it is computed as follows:
Balance delay (percentage) = 100 – efficient.
Product Layout
The work is divided into a series of standardized tasks, permitting specialization of equipment
and division of labor. The large volumes handled by these systems usually make it economical to
invest substantial sums of money in equipment and job design. 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 it sequence. In
addition, 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 like the one depicted in Figure 1.

Figure 2: Cafeteria line

Example:
Examples of product layout include:

 Car assembly – almost all variants of the same model require the same sequence of
processes.
 Self-service cafeteria – generally the sequence of customer requirements (starter, main
course, dessert, and drink) is common to all customers, but layout also helps control
customer flow.
Characteristics:
Product layouts have the following characteristics:

 Resources are specialized. Product layouts use specialized resources designed to produce
large quantities of a product.
 Facilities are capital intensive. Product layouts make heavy use of automation, which is
specifically designed to increase production.
 Processing rates are faster. Processing rates are fast, as all resources are arranged in
sequence for efficient production.
 Material handling costs are lower. Due to the arrangement of work centers in close
proximity to one another, material handling costs are significantly lower than for process
layouts.
 Space requirements for inventory storage are lower. Product layouts have much faster
processing rates and less need for inventory storage.
 Flexibility is low relative to the market. Because all facilities and resources are specialized,
product layouts are locked into producing one type of product. They cannot easily add or
delete products from the existing product line.

Hybrid Layouts (Combination)

Hybrid Layouts
There are many ways a business can arrange its manufacturing facilities. These include process
layouts, product layouts, and fixed-position layouts. We are going to look at how these layouts
can be combined in different ways to increase productivity. These are referred to as a hybrid
layout, which is a layout that is a combination of the three main manufacturing layouts. We will
look at three different hybrid layouts: cellular, flexible manufacturing, and mixed-model
assembly.

 Hybrid layouts modify and/or combine some aspects of the three basic layout types to
satisfy the needs of a particular situation

 Examples:
o Supermarket layouts: primarily process layout, have fixed-path material-handling
devices as well (roller-type conveyors and belt-type conveyors)
o Hospitals: process layout, fixed-position layout as well (patient care)
 o Off-line reworking (customized processing) of faulty parts in a product layout
 There are 3 hybrid layouts:
o Cellular Layouts
o Flexible Manufacturing Systems
o Mixed-model assembly lines

Cellular Layouts
 In cellular manufacturing, production workstations 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. Cellular manufacturing can also
provide companies with the flexibility to vary product type or features on the production
line in response to specific customer demands. Using this technique, production capacity
can be incrementally increased or decreased by adding or removing production cells.

 Characteristics

 Limited number of parts or models are processed with line flows.

 Based on the concept of group technology (GT), dissimilar machines are grouped
into work centers, called cells, to process parts with similar shapes or processing
requirements
 The layout of machines within each cell resembles a small assembly line

 Advantages of cellular layout

 Reduced material handling and transit time 

 Reduced setup time
 Reduced work-in-process inventory
 Better use of human resources:
o Self-managed team, in most cases more satisfied with the work that they do
o Flexible resource. Workers in each cell are multifunctional and can be
assigned to different routes within a cell or between cells as demand volume
changes.

Flexible Manufacturing Systems

 “A system that consists of numerous programmable machine tools connected by an
automated material handling system”. A flexible manufacturing system can produce an
enormous variety of items.

 Advantages

 Faster, lower- cost changes from one part to another which will improve capital
utilization
 Lower direct labor cost, due to the reduction in number of workers
 Reduced inventory, due to the planning and programming precision
 Consistent and better quality, due to the automated control
 Lower cost/unit of output, due to the greater productivity using the same number of
workers
 Savings from the indirect labor, from reduced errors, rework, repairs and rejects
Mixed model assembly line
Mixed model assembly lines can be found today in many industrial environments. With the
growing trend for greater product variability and shorter life cycles, they are replacing the
traditional mass production assembly lines. In many cases, these lines follow a ‘make-to-order’
production policy, which reduces the customer lead-time, and is expressed in a random arrival
sequence of different model types to the line. Additional common characteristics of such mixed
model lines in a make-to-order environment are small numbers of workstations, a lack of
mechanical conveyance, and highly skilled workers.
 A mathematical formulation is presented which considers the differences between our model
and traditional models. A heuristic that minimizes the number of stations for a predetermined
cycle time is developed consisting of three stages: the balancing of a combined precedence
diagram, balancing each model type separately subject to the constraints resulting from the
first stage, and a neighborhood search based improvement procedure.
Traditional assembly lines, designed to process a single model or type of product, can be
used to process more than one type of product but not efficiently. Models of the same type are
produced in long production runs, sometimes lasting for months, and then the line is shut down
and changed over for the next model. The next model is also run for an extended time, producing
perhaps half a year to a year’s supply; then the line is shut down again and changed over for yet
another model; and so on. The problem with this arrangement is the difficulty in responding to
changes in customer demand. If a certain model is selling well and customers want more of it,
they have to wait until the next batch of that model is scheduled to be produced. On the other
hand, if demand is disappointing for models that have already been produced, the manufacturer
is stuck with unwanted inventory.

Warehousing and Storage Layouts

The role of storage installations has evolved over time and they have become strategic factors
in the success of many businesses. Warehouses are no longer merely places for storing
products; they are now focused on providing service and support facilities to companies of all
kinds.
Warehouse Layout Design Principles
There are several basic principles that apply to warehouse layout design and running an effective
distribution center operation. Without the proper layout and design of your distribution center, no
matter the square footage, you will face capacity issues, decreased productivity, and storage
inadequacies.

Warehouse and Storage Layouts

The objective of warehouse layout is to find the optimum trade-off between handling cost and
costs associated with warehouse space.
Consequently, management’s task is to maximize the utilization of the total “cube” of the
warehouse—that is, utilize its full volume while maintaining low material handling costs. We
define material handling costs as all the costs related to the transaction. This consists of
incoming transport, storage, and outgoing transport of the materials to be warehoused. These
costs include equipment, people, material, supervision, insurance, and depreciation. Effective
warehouse layouts do, of course, also minimize the damage and spoilage of material within the
warehouse.

Warehouse Layouts
Warehouse layouts have the key characteristics of process layouts: products are stored based on
their function, and there is movement of goods. The main difference is that movement within a
warehouse is primarily between the loading/unloading dock and the areas where goods are
stored. Typically, there is no movement between the storage areas themselves; the primary
function of a warehouse is to provide storage space, so the only movement is inbound or
outbound. Think about a warehouse that stores computer equipment and supplies.

Product: What kind of goods will it hold?

Warehouses are used for storing goods, as part of the supply chain. It is essential that we clearly
understand all the characteristics of these goods: the load unit used, its dimensions and
minimum/maximum weights. The amounts, types and references of each one of them, their
sensitivity to different temperatures.

Nonetheless, despite the specific circumstances, the general layout of a facility must cover all
these needs:

 Making the most of the available space

 Reducing the handling of goods to a minimum
 Providing easy access to the stored product
 Having the highest rotation ratio possible
 Offering maximum flexibility in the positioning of products
 Controlling the amounts stored

To achieve these objectives, the first step is to create a warehouse layout, where the design of
the warehouse is represented in the form of a plan. 

The following areas must be perfectly defined when designing a layout:

A. Loading and unloading areas
B. Reception area
C. Storage area
D. Picking area
E. Dispatch area
Cross-Docking:
Cross docking means to avoid placing materials or supplies in storage by processing them
as they are received. In a manufacturing facility, product is received directly by the assembly
line. In a distribution center, labeled and presorted loads arrive at the shipping dock for
immediate rerouting, thereby avoiding formal receiving, stocking/ storing, and order-selection
activities. Because these activities add no value to the product, their elimination is 100% cost
savings. Walmart, an early advocate of crossdocking, uses the technique as a major component
of its continuing low-cost strategy. With cross docking, Walmart reduces distribution costs and
speeds restocking of stores, thereby improving customer service. Although cross-docking
reduces product handling, inventory, and facility costs, it requires both (1) tight scheduling and
(2) accurate inbound product identification.
Random Stocking:
Automatic identification systems (AISs), usually in the form of bar codes, allow accurate and
rapid item identification. When automatic identification systems are combined with effective
management information systems, operations managers know the quantity and location of every
unit. This information can be used with human operators or with automatic storage and retrieval
systems to load units anywhere in the warehouse— randomly.
References:
Heifer, Jay. Munson, Chuck. Render, Barry. Operations Management Sustainability and Supply
Chain Management 12th Edition [Pearson Education Limited 2017, pp. 375-377].

Reid, R. Dan (Robert Dan), 1949- Operations management / R. Dan Reid, Nada R. Sanders. —
5th ed. [electronic resource 2013, pp. 385-388].

Slack, Nigel, Operations and process management principles and practice for strategic impact 5 th
Edition [Pearson Education Limited 2018, pp. 175].

Roberta S. Russell, Bernard W. Taylor III, and Operations Management: Creating Value along
the Supply Chain 7th edition [John Wiley and Sons, Inc. 2011, pp. 278-284].