Process Selection and Facility Layout

Learning Objectives

• The strategic importance of process selection.

• The influence that process selection has on an organization.
• The basic processing types.
• The basic layout types, and the main advantages and
disadvantages of each.

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 Process Selection

• Processes convert inputs into outputs.

• Process selection refers to deciding on the way production of
goods or services will be organized.
• Process choice is demand driven. Three primary questions
bear on process selection:
 How much variety in products or services will the system
need to handle?
 What degree of equipment flexibility will be needed?
 What is the expected volume of output?

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 Process Selection

There are five basic process types:

• Job shop.
• Batch.
• Repetitive.
• Continuous.
• Project.

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 Job Shop: Manufacturing

Skilled workers

General equipment

Customised goods

High-variety goods

This craftsperson is using general purpose wood-cutting

technology to make a product for an individual customer. The
next product he makes will be different (although it may be
similar), possibly for a different customer.
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 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.
• A manufacturing example of a job shop is a tool and die shop that is
able to produce one-of-a-kind tools.
• A service example is a veterinarian’s office, which is able to process a
variety of animals and a variety of injuries and diseases.
In summary:
• Customised goods or services, low volume, general equipment,
skilled workers, high-variety.
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 Job Shop: Service

A midwestern hospital medical team performs a

diagnostic procedure involving a cardiac
catheterization. 7
 Batch

A batch process: Menu items are prepared in

batches, in the kitchen. All batches go through the
same sequence (preparation, cooking, storing), but
each batch is a different dish.
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 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.
• Higher volumes and lower variety than for jobbing.
• Each time batch processes produce a product they produce more
than one.
• The equipment need not be as flexible as in a job shop.
• Standard products, repeating demand. But can make specials.
• 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 bakeries, which make bread, cakes,
or cookies in batches; movie theatres, which show movies to groups
(batches) of people; and airlines, which carry planeloads (batches) of
people from airport to airport.
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 Repetitive

A repetitive process: Motorcycles on an assembly line

with parts added in a sequential order. Each product is
almost (but not quite) the same, and is made in large
quantities. 10
 Repetitive or Mass processes

• Repetitive processing is used when higher volumes of more

standardized goods or services are needed.
• 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.
• Familiar products made by these systems include automobiles,
television sets, pencils, and computers. An example of a service
system is an automatic carwash.
• Other examples of service include cafeteria lines and ticket collectors
at sports events and concerts.

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 Continuous

Continuous process: An oil refinery performs a

continuous process, mixing and separating crude oil into
gas, fuel oil, chemicals, and many other products.
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 Continuous

• A continuous system is used when a very high volume of non

discrete, highly standardized output is desired.
• 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 petroleum products, steel, sugar, flour, and salt.
• Continuous services include air monitoring, supplying electricity to
homes and businesses, and the Internet.

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Product – Process Matrix

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Product and Service Processes
Volume and Flexibility

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 Project

The major construction site shown in this picture

is a project process. Each ‘product’ (project) is
different and poses different challenges to those
running the process (civil engineers).
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 Project

What are the main characteristics of a project process?

• Intermittent or continuous ?
• Volume
• Variety
• Equipment flexibility – Worker skill

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 Project

• All of these process types (job shop, batch, repetitive, and continuous)
are typically ongoing operations.
• Some situations are not ongoing but instead are of limited durations.
• A project is used for work that is no routine, with a unique set of
objectives to be accomplished in a limited time frame.
• Often the timescale of making the product or service is relatively long.
• Project Processes have low volume and high variety.
• Specially made, every one customized.
• Equipment flexibility and worker skill can range from low to high.
• Examples include construction of a dam or a bridge, implementing a new
inventory and bar coding system.

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Different process types imply different
volume–variety characteristics for the
process

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 Professional service

• Professional services are defined as high contact organizations

where customers spend a considerable time in the service
process.
• Such services provide high levels of customization, the service
process being highly adaptable in order to meet individual
customer needs.
• Professional services tend to be people-based rather than
equipment-based, with emphasis placed on the process (how
the service is delivered) rather than the ‘product’ (what is
delivered).
• Professional services include management consultants, lawyers’
practices, architects, doctors’ surgeries, auditors.
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 Service Process Type

• Levels of volumes (Volume of Customers)

• Levels of customer contact (High –Low)
• Customization (Process of the Sale)
• Front - and back-office activities.

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 Service shops - Example

The health club shown in the picture has front-office staff who
can give advice on exercise programmes and other treatments. To
maintain a dependable service the staff need to follow defined
processes every day.

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 Service shops

• Service shops are characterized by levels of customer contact,

customization, volumes of customers and staff discretion.
• Service is provided via mixes of front - and back-office activities.
• Essentially the customer is buying a fairly standardized product
but will be influenced by the process of the sale which is
customized to the customer’s individual needs.
• Medium levels of volumes, customer contact and
customization.
• Service shops include banks, high street shops, holiday tour
operators, car rental companies, schools, most restaurants, hotels
and travel agents.

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 Mass service - Example

This is an account management centre for a large retail bank.

It deals with thousands of customer requests every day.
Although each customer request is different, they are all of the
same type – involving customers’ accounts.

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 Mass service

• Mass services have many customer transactions, involving high

volume, limited contact time and little customization.
• Such services may be equipment based and ‘product’-oriented,
with most value added in the back office and relatively little
judgement applied by front-office staff.
• Staff are likely to have a closely defined division of labour and to
follow set procedures.
• Mass services include: supermarkets, a national rail network,
an airport, telecommunications services.

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Different process types imply different
volume–variety characteristics for the
process

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Describe the Process Design for a service
organisation of your choice

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 Facilities layout
• Layout: The configuration of departments, work centres, and
equipment, with particular emphasis on movement of work
(customers or materials) through the system.
• Product layouts.
• Process layouts. (Also known as functional layouts).
• Fixed-Position layout.
• Combination layouts.
• Service layouts.
 Requires substantial investments of money and effort.
 Involves long-term commitments.
 Has significant impact on cost and efficiency of short-term
operations.

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 Objective of Layout Design

• Facilitate attainment of product or service quality.

• Use workers and space efficiently.
• Avoid bottlenecks.
• Minimize unnecessary material handling costs.
• Eliminate unnecessary movement of workers or materials.
• Minimize production time or customer service time.
• Design for safety.

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Product Layout

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 Repetitive Processing: Product Layout

• Product Layout: Layout that uses standardized processing

operations to achieve smooth, rapid, high-volume flow.
• Used for Repetitive or Continuous Processing.

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 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.
• It is feasible to arrange an entire layout to correspond to the
technological processing requirements of the product or
service.
• In manufacturing environments, the lines are referred to as
production lines or assembly lines, depending on the type of
activity involved.

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 Advantages of Product Layout

• High rate of output.

• Low unit cost.
• Labor specialization.
• High utilization of labor and equipment.
• Established routing and scheduling.
• Routine accounting, purchasing and inventory control.

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 Disadvantages of Product Layout

• Creates dull, repetitive jobs.

• Poorly skilled workers may not maintain equipment or quality
of output.
• Inflexible to changes in product or process design.
• Highly susceptible to shutdowns.
• Needs preventive maintenance.
• Individual incentive plans are impractical.

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 Non repetitive Processing: Process
Layout or Functional Layout

Layout that can handle varied processing requirements.

• In this layout, similar items are grouped together.

• This type of layout is commonly seen in auto shops and department
stores.
• This type of layout is ideal for facilities that perform custom jobs.
• Different products or customers will have different needs and therefore
take different routes. Usually this makes the flow pattern in the
operation very complex.
• Job Shop or Batch Processes.
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 Advantages of Process Layouts

• Can handle a variety of processing requirements.

• Not particularly vulnerable to equipment failures.
• Equipment used is less costly.
• Possible to use individual incentive plans.

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 Disadvantages of Process Layouts

• Challenging routing and scheduling.

• Equipment utilization rates are low.
• Complexities often reduce span of supervision.
• Special attention for each product or customer.
• Can have very high work-in-progress or customer queuing.

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 Fixed Position Layouts

• Layout in which the product or project remains stationary, and

workers, materials, and equipment are moved as needed.
• Nature of the product dictates this type of layout.
 Weight
 Size
 Bulk
• Large construction projects.

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 Combination Layouts

• Process layouts tend to be less efficient and have higher unit

production costs than product layouts.
• Some manufacturers are moving away from process layouts in
an effort to capture some of the benefits of product layouts.
• Ideally, a system is flexible and yet efficient, with low unit
production costs.
• Cellular manufacturing represents effort to move toward this
ideal.

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 ‘Shop-within-a-shop’ (cell) in a
department store

• This area is a shop-within-a-shop which will stock sports clothes, sports

shoes, sports bags, sports books and videos, sports equipment and energy
drinks, which are also located elsewhere in the store.
• Enough customers come to the store to buy ‘sports goods’ in particular to
devote an area specifically for them.
• Customers intending to buy sports shoes might also be persuaded to buy
other sports goods if they are placed in the same area.
 Cellular Manufacturing

• 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.
• 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.
• 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.

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 Cellular Manufacturing

Advantages
• Reduced material.
• Reduced setup time.
• Productivity and quality improvement.
• Better use of human resources.
• Easier to control.
• Easier to automate.
Disadvantages
• Expanded training and scheduling of workers.
• Increased capital investment.

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 The relationship between functional and
layout types
Manufacturing Basic layout Service
functional types types functional types

Project processes
Fixed position layout
Professional services
Jobbing processes
Functional layout

Batch processes Service shops

Cell layout

Mass processes Mass services

Product layout
Continuous processes
Describe the facility layout for an
organisation of your choice

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 Design Product Layouts: 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.
• Line Balancing is the process of assigning tasks to
workstations in such a way that the workstations have
approximately equal time requirements.
• Usually, each workstation has one worker who handles all of the
tasks at that station, although an option is to have several
workers at a single workstation.

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 Revision questions

• Types process types.

• Main characteristics (Volume/flexibility).
• Types of Facilities Layout.
• Which process type is related to product layout/process layout?
• Why we need combination layouts?
• What is Cellular Production?
• What is Line Balancing?

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