Principals of Operations Management

Layout Planning - Lakshay Jain (20356)

Layout Planning
• Deciding best physical arrangement of all the resources present at a facility.
Meaning • It involves the physical arrangement of various resources available in the system to improve the performance of the operating
system, thereby providing better customer service

• Effective use of available area.

• Minimization of production delays and avoidance of bottlenecks
Why to plan • Better supervision and production control
Layout • Economies in handling and minimum equipment cost
• Improved Utilization of labor and employee morale

• Product Layout
• Process Layout
Types • Group Technology Layout
• Fixed Position Layout
Types of Layouts
(1.1/4) Product Layout
In a product layout, the resources are placed to follow exactly the process sequence dictated by a product.
• Resources are specialised: All the resources at a function is specialised to the product.
• Processing rates faster: All the process regarding a product is in a single line and hence products are created faster.
Characteristics • Material Handling Costs Lower: Since, material handling is easier as all products have its own materials, the cost reduces.

Advantages
Output: Product layouts can generate a large volume of
products in a short time.
Standardised product and process routing: After the
completion of the complete process, the product will be
standardised since same processes are completed for
each product.
Disadvantages
System protection: The system is at risk from equipment
breakdown, absenteeism, and downtime due to
preventive maintenance.
Motivation: The system's inherent division of labor can
result in dull, repetitive jobs that can prove to be quite
stressful. Also, assembly-line layouts make it very hard to
administer individual incentive plans.

Higher Operational Control: Since, all the processes of a
product are together, there is higher operational control
Utilization: There is a high degree of labor and
equipment utilization.
Cost: Unit cost is low as a result of the high volume.
Labor specialization results in reduced training time and
cost. A wider span of supervision also reduces labor
costs. Accounting, purchasing, and inventory control are
routine. Because routing is fixed, less attention is
required.
Lack of productivity: In this type of layout, the productivity
of machines will reduce as they need to wait for prior
machines to finish the work.
Flexibility: Product layouts are inflexible and cannot
easily respond to required system changes—especially
changes in product or process design.
Duplication of Equipment leading to high costs: In this,
many common processes belonging to different products
are performed in insolation to each other, leading to high
costs due to duplication.
Types of Layouts
(1.2/4) Product Layout Example

The best example of Product Layout type is Assembly Line Layout. In this, all the processes of assembling a particular product
are done on a particular conveyor belt and the machines/labor does their task and then the product moves forward. All the car
companies use this type of layout for the final assembling of their cars and hence real life examples of companies which uses
product layout are TATA, Tesla, GM, Mercedes, Maruti, etc.
Types of Layouts
(2.1/4) Process Layout
A process layout is an arrangement of resources on the basis of the process characteristics of the resources available
• General Purpose Resources: All the resources at a function are general to meet the requirements of all products.
• Processing rates slower: It may happen that other product is in production and hence, a particular product may not be
Characteristics produced, hence, production rates are slower.
• Material Handling Costs higher: Material handling is taxing as there is need for the materials to be at different places for a
product to be made.

Advantages
Flexibility: The firm can handle variety of operations at
once.
System protection: Since there are multiple machines
available, process layouts are not particularly vulnerable
to equipment failures.
Disadvantages
Utilization: Equipment utilization rates in process layout
are frequently very low, because machine usage is
dependent upon a variety of output requirements.
Operational Control Difficult: Constantly changing
schedules and routings make juggling process
requirements more difficult and hence makes it difficult to
have operational control.

Motivation: Employees in this type of layout will probably
be able to perform a variety of tasks on multiple
machines, as opposed to the boredom of performing a
repetitive task on an assembly line. A process layout also
allows the employer to use some type of individual
incentive system.
Cost: If batch processing is used, in-process inventory
costs could be high. Lower volume means higher per-unit
costs. Setups are more frequent, hence higher setup
costs. Material handling is slower and more inefficient.
The span of supervision is small due to job complexities
(routing, setups, etc.), so supervisory costs are higher.
Additionally, in this type of layout accounting, inventory
control, and purchasing usually are highly involved.

Cost: The general-purpose machinery employed maybe Large Inventory Build-up: Under this layout, company
cheaper to set-up and operate. Also, even if specialized needs to have a large inventory build-up so that if the
machinery is involved, sharing it for multiple products, will demand arises of a product, it can be met soon and is
reduce the cost per product. not dependent on the manufacturing.
Types of Layouts
(2.2/4) Process Layout Example

The best example of Process Layout type is Machine shop. In this, all the processes are clubbed together at specialised places
and then product flows depending on its need for the process. For example, in following diagram, product A goes first to
Lathe(L) then to Drilling(D), followed by Milling(M) and finally Grinding(G) before exiting the system. This type of layouts are
quite famous in small mechanic shops, quality control stations, repair stations, etc as they try to keep everything generalised at
a place so that any type of product can be taken care to by them.
Types of Layouts
(3.1/4) Group Technology Layout
Group technology (GT) is a philosophy that seeks to exploit the commonality in manufacturing and uses this as the
basis for grouping components and resources. The implementation of GT is often known as cellular manufacturing.

• Product+Process Layout: This type of layout combines the characteristics of both product layouts and process layouts.
Characteristics • Utilization of resources: It is said that since it has best of both product and process layouts, it has the best utilization of
resources and hence helps in reduce the costs.

Advantages
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.
Disadvantages
Supervision cost: Since this layout is the mix of both
product and process layouts, supervision requirements
increase. Supervision of all the processes in a cell is
required and supervision of all the different cells are also
required.

Motivation: Since workers are cross-trained to run every Not suitable for everyplace: GT Layout is not possible for
machine in the cell, boredom is less of a factor. Also, all products and in the cases where there are multiple
since workers are responsible for their cells' output, more products, this type of layout cannot be used in the factory
autonomy and job ownership is present.

Flexibility: Cellular manufacturing allows for the Difficulties with out-of-cell operations: Under this type of
production of small batches, which provides some layout, when there is requirement of some other process ,
degree of increased flexibility. This aspect is greatly then it is very difficult to incorporate that in the system.
enhanced with FMSs.
Types of Layouts
(3.2/4) Group Technology Layout Example

Many factories which produces multiple products which have quite a number of different characteristics follows this kind of
layout. One example of Group Technology Layout can be Tesla Gigafactory. One Tesla Gigafactory produces Model 3, Model Y,
Model X and Tesla’s Energy equipment. For this Tesla has created multiple production lines for the smooth flow and production
of these machineries and products. Hence, Tesla uses Group Technology Layout to maximise the use of its factory.
Types of Layouts
(4.1/4) Fixed Position Layout
Under this, the product stays at one place whereas the machines and workers move according to the product.
• Not Optimum positioning of resources: This type of layout, doesn’t focus on optimal positioning of the machinery and
work station, as the products are too bulky.
Characteristics • Focus on better control: The main focus of this layout is better control of supervisor on the complete flow of processes.
• Product too bulky and in less quantity: Usually products under which this is used are too bulky and made in less quantities

Advantages Disadvantages
Flexibility: Since non of the machines or workers are High costs: Since the machines and workers move according to
fixed, flexibility is high in this. This means that it can be the product production stage, this leads to high handling costs
changed according to the products increasing the costs of the product.

Planning: Production centres are independent of each
other and hence effective planning and loading can be
done.
Quality: Since the product is made in low quantities, the
product quality can be maintained.
Space: Under this, many times there isn’t enough space at the
work station to keep inventory.
Highly skilled labor: There is a need for high skilled
labors for this type of layout.
Types of Layouts
(4.2/4) Fixed Position Layout Example

Examples of places where fixed position layouts are used are all the factories, companies which make bulky products. This
ranges from aircraft prepared by Boeing or HAL, to shipyards, to heavy machineries created by HAL to rockets, satellites
created by ISRO, SpaceX etc to making of metro etc. Under these, the product is kept at a specific place and in specific position
and the machinery and people move around it to match the production process that needs to be completed.