Operations Management

Plant Layout
 Product Layout
• Product. Standardised product,
large volume, stable rate of output
• Work flow. Straight line of product;
same sequence of operations for
each unit
• Human skills. Able to perform
routine, repetitive tasks at fixed
pace; highly specialised
 Product Layout
• Support staff. Large; schedule materials and
people, monitor and maintain work
• Material handling. Predictable, flow, systematised
and often automated
• Inventory. High turnover of raw material and work-
in-process inventories
• Space utilisation. Efficient utilisation, large output
per unit space
 Product Layout
• Capital requirements. Large
investment in specialised equipment
and processes
• Product cost. Relatively high fixed
costs; low unit costs for direct labour
and materials
 Process Layout
• Product. Diversified products using
common operations, varying
volumes, varying rate of output
• Work flow. Variable flow; each
order (product) may require unique
sequence of operations
 Process Layout
• Human skills. Primarily skilled
craftsmen; able to perform without
close supervision and be moderately
adaptable
• Support staff. Perform tasks of
scheduling, materials handling, and
production and inventory control
• Material handling. Flow variable;
handling often duplicated
 Process Layout
• Inventory. Low turnover of raw
material and work-in-process
inventories; high raw materials
inventories
• Space utilisation. Small output per
unit space; large work-in-process
requirements
 Process Layout
• Capital requirements. General
purpose, flexible equipment and
processes
• Product cost. Relatively low fixed
costs; high unit costs for direct
labour, materials, and materials
handling
 Fixed Position/Stationary
Layout
• Product. Made-to-order, low volume
• Work flow. Little or no flow;
equipment and human resources
brought to site as needed
• Human skills. Great flexibility
required; work assignments and
locations vary
• Support staff. Schedule and
coordinate skilfully
 Fixed Position/Stationary
Layout
• Material handling. Flow variable,
often low; may require heavy-duty,
general purpose handling equipment
• Inventory. Variable inventories and
frequent tie-ups because production
cycle is long
• Space utilisation. Small output per
unit space if conversion is on site
 Fixed Position/Stationary
Layout
• Capital requirements. General
purpose, mobile equipment and
processes
• Product cost. Relatively low fixed
costs; high unit labour and materials
costs
 Product v/s Process Layout
Criteria Product Process
Investment Needs high Comparatively
investment in low investment
machines/ needed.
equipment
Duration Needs less Production time
Of manufacturing can not be
production time as the economised due
economy in to frequent
time can be movement of
planned in the men and
beginning. material.
 Product v/s Process Layout
Criteria Product Process
Immobilisation Breakdown of Breakdown of any
Due any machine does not
To unit/component immobilise the
breakdown immobilises the whole system.
whole system.
Adjustability Inflexible as Flexible as
To each machine different sections
changes can perform pre- can adjust the
designed operations
operation only. according to
changes in
operations.
 Product v/s Process Layout
Criteria Product Process
Floor Requires less Requires more
space space. space.
Men/ Not to full Comparatively
Equipment capacity. better utilisation.
utilisation
 Product v/s Process Layout
Criteria Product Process
Material Lesser amount Involves greater
handling of material handling of
handling and material
comparatively requiring more
lesser time, time, money and
money and efforts.
efforts.
 Product v/s Process Layout
Criteria Product Process
Demand Proper co- Co-ordination
And ordination between demand
Supply between and supply is
relationship demand and as likely to be
these are made difficult as these
to stock. are made to
order.
Control Specialised and Comparatively
And expertise lesser efforts on
inspection control is control are
required thus needed.
increasing
 Group Technology Layout
• 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.
• In order to avoid the drawbacks of product
and process layouts, organisations use GT
– a combination of the two.
 Group Technology Layout
• GT provides an alternative method for
configuring resources in organisations
that have mid-volume, mid-variety
product portfolios.
• The components are grouped into part
families.
• Corresponding to each part family,
machine groups are identified and the
layout is formed accordingly.
 Group Technology Layout
Benefits:
• Smaller, more manageable and independent
units of production.
• PPC becomes simpler.
• Entire processing of components within their
cell, so materials handling easier.
• Easier to implement JIT, Kaizen and other
manufacturing improvement practices.
 Layout Design for Services
• The principles of designing layouts
for manufacturing settings apply for
service settings also.
• Resources that share considerable
amount of inter-resource flow of jobs
must be located closer.
 Layout Design for Services
Two important factors:
• Degree of customer contact;
• Line of visibility.
 Layout Design for Services
Degree of Customer Contact:
• Customer contact refers to the
physical presence of customer in the
system.
• In any service facility, some areas
would be in direct contact of
customers while there would be other
areas that should be out of bounds for
them.
 Layout Design for Services
• For instance, in banks, cash and payment
facilities and locker facilities have
customer contact, whereas strong room,
record keeping room, etc are outside the
area of customer access.
• Firms may have to consider the trade-off
between customer convenience and
efficiency of the system while designing
the layout.
 Layout Design for Services
Line of Visibility:
• One operational implication of the degree
of customer contact is the line of visibility
available to the customer.
• As the degree of customer contact
increases, the line of visibility also gets
pushed back; more and more aspects of
the business processes are exposed to the
customer; this may jeopardise service
quality.