Facility layout refers to the arrangement of machines, departments, workstations, storage areas, aisles, and common areas within an existing or proposed facility. Layouts have far-reaching implications for the quality, productivity, and competitiveness of a firm. Layout decisions significantly affect how efficiently workers can do their jobs, how fast goods can be produced, how difficult it is to automate a system, and how responsive the system can be to changes in product or service design, product mix, and demand volume.

The basic objective of the layout decision is to ensure a smooth flow of work, material, people, and information through the system. Effective layouts also:


Basic Layouts

There are three basic types of layouts: process, product, and fixed-position; and three hybrid layouts: cellular layouts, flexible manufacturing systems, and mixed-model assembly lines. We discuss basic layouts in this section and hybrid layouts later in the chapter.

Process Layouts

Process layouts, also known as functional layouts, group similar activities together in departments or work centers according to the process or function they perform. For example, in a machine shop, all drills would be located in one work center, lathes in another work center, and milling machines in still another work center. In a department store, women's clothes, men's clothes, children's clothes, cosmetics, and shoes are located in separate departments. A process layout is characteristic of intermittent operations, service shops, job shops, or batch production, which serve different customers with different needs. The volume of each customer's order is low, and the sequence of operations required to complete a customer's order can vary considerably.



The equipment in a process layout is general purpose, and the workers are skilled at operating the equipment in their particular department. The advantage of this layout is flexibility. The disadvantage is inefficiency. Jobs or customers do not flow through the system in an orderly manner, backtracking is common, movement from department to department can take a considerable amount of time, and queues tend to develop. In addition, each new arrival may require that an operation be set up differently for its particular processing requirements. Although workers can operate a number of machines or perform a number of different tasks in a single department, their workload often fluctuates--from queues of jobs or customers waiting to be processed to idle time between jobs or customers. Figure 7.1 (a) and Figure 7.1 (b) shows a schematic diagram of process layouts in services and manufacturing.

Material storage and movement are directly affected by the type of layout. Storage space in a process layout is large to accommodate the large amount of in-process inventory. The factory may look like a warehouse, with work centers strewn between storage aisles. In-process inventory is high because material moves from work center to work center in batches waiting to be processed. Finished goods inventory, on the other hand, is low because the goods are being made for a particular customer and are shipped out to that customer upon completion.

Process layouts in manufacturing firms require flexible material handling equipment (such as forklifts) that can follow multiple paths, move in any direction, and carry large loads of in-process goods. A forklift moving pallets of material from work center to work center needs wide aisles to accommodate heavy loads and two-way movement. Scheduling of forklifts is typically controlled by radio dispatch and varies from day to day and hour to hour. Routes have to be determined and priorities given to different loads competing for pickup.

Process layouts in service firms require large aisles for customers to move back and forth and ample display space to accommodate different customer preferences.

The major layout concern for a process layout is where to locate the departments or machine centers in relation to each other. Although each job or customer potentially has a different route through the facility, some paths will be more common than others. Past information on customer orders and projections of customer orders can be used to develop patterns of flow through the shop.

Product Layouts

Product layouts, better known as assembly lines, arrange activities in a line according to the sequence of operations that need to be performed to assemble a particular product. Each product or has its own "line" specifically designed to meet its requirements. The flow of work is orderly and efficient, moving from one workstation to another down the assembly line until a finished product comes off the end of the line. Since the line is set up for one type of product or service, special machines can be purchased to match a product's specific processing requirements. Product layouts are suitable for mass production or repetitive operations in which demand is stable and volume is high. The product or service is a standard one made for a general market, not for a particular customer. Because of the high level of demand, product layouts are more automated than process layouts, and the role of the worker is different. Workers perform narrowly defined assembly tasks that do not demand as high a wage rate as those of the more versatile workers in a process layout.



The advantage of the product layout is its efficiency and ease of use. The disadvantage is its inflexibility. Significant changes in product design may require that a new assembly line be built and new equipment be purchased. This is what happened to U.S. automakers when demand shifted to smaller cars. The factories that could efficiently produce six-cylinder engines could not be adapted to produce four-cylinder engines. A similar inflexibility occurs when demand volume slows. The fixed cost of a product layout (mostly for equipment) allocated over fewer units can send the price of a product soaring.

The major concern in a product layout is balancing the assembly line so that no one workstation becomes a bottleneck and holds up the flow of work through the line. Figure 7.2 shows the product flow in a product layout. Contrast this with the flow of products through the process layout shown in Figure 7.1 (b).

A product layout needs material moved in one direction along the assembly line and always in the same pattern. Conveyors are the most common material handling equipment for product layouts. Conveyors can be paced (automatically set to control the speed of work) or unpaced (stopped and started by the workers according to their pace). Assembly work can be performed online (i.e., on the conveyor) or offline (at a workstation serviced by the conveyor).

Aisles are narrow because material is moved only one way, it is not moved very far, and the conveyor is an integral part of the assembly process, usually with workstations on either side. Scheduling of the conveyors, once they are installed, is simple--the only variable is how fast they should operate.

Storage space along an assembly line is quite small because in-process inventory is consumed in the assembly of the product as it moves down the assembly line. Finished goods, however, may require a separate warehouse for storage before they are shipped to dealers or stores to be sold.

Product and process layouts look different, use different material handling methods, and have different layout concerns. Table 7.1 summarizes the differences between product and process layouts.

Fixed-Position Layouts

Fixed-position layouts are typical of projects in which the product produced is too fragile, bulky, or heavy to move. Ships, houses, and aircraft are examples. In this layout, the product remains stationary for the entire manufacturing cycle. Equipment, workers, materials, and other resources are brought to the production site. Equipment utilization is low because it is often less costly to leave equipment idle at a location where it will be needed again in a few days, than to move it back and forth. Frequently, the equipment is leased or subcontracted, because it is used for limited periods of time. The workers called to the work site are highly skilled at performing the special tasks they are requested to do. For instance, pipefitters may be needed at one stage of production, and electricians or plumbers at another. The wage rate for these workers is much higher than minimum wage. Thus, if we were to look at the cost breakdown for fixed-position layouts, the fixed cost would be relatively low (equipment may not be owned by the company), whereas the variable costs would be high (due to high labor rates and the cost of leasing and moving equipment).





Because the fixed-position layout is specialized, we concentrate on the product and process layouts and their variations for the remainder of this chapter. In the sections that follow, we examine some quantitative approaches for designing product and process layouts.


7-2. What type of layout would be appropriate for a grocery store? home construction? electronics assembly? a university?

7-3. What are the fixed and variable cost trade-offs among product, process, and fixed-position layouts? Draw a cost/volume graph to illustrate your answer.

7-4. Visit a local McDonald's, Burger King, and Taco Bell (or similar establishments). How do their layouts differ? Which appears to be most efficient? Why?