Schemi Operations management and digital technologies

FIXED-POSITION LAYOUT

The transformed resources do not move between the transforming resources.

The recipient of the processing is stationary and the facilities and people who do the processing move as

necessary, because the transformed resources are too large, too delicate or too inconvenient to move.

→ Project processes and professional services mainly, and some jobbing process: high variety and low

volume. →

Es. Motorway construction/ a car repair shop – the product is too large to move car is the transformed

resource; cruise ship building, construction site, surgery, a class lesson, movie theatre.

Advantage:

✓ Very high mix and product flexibility (many different activities)

✓ Product or customer not moved or disturbed

✓ High variety of tasks for staff

Disadvantage:

 Very high unit costs

 Scheduling of space and activities can be difficult

 Can mean much movement of equipment and staff

FUNCTIONAL LAYOUT OR PROCESS LAYOUT

In functional layout, similar transforming resources are

located together, because it is convenient to group them

together, or because their utilisation is improved.

When transforming/transformed resources flow through the

operation, they will take a route from activity to activity

according to their needs. Different products or customers will

have different needs and therefore take different routes.

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Work shop = department and each of them has a specific function. Transforming and transformed resources

are organized in functions. Between departments there are inventory (WIP) that will be transported where

needed.

→ Jobbing and batch processes (normally), professional services and service shops (normally): lower

variety and higher volume than fixed-position layout.

Es. Library has different types of users with different traffic patterns: transformed = the costumers,

transforming resource = books; supermarket, hospital, university, cotton (jeans) production.

Advantage:

✓ High mix and product flexibility

✓ Relatively robust in the case of disruptions

✓ Relatively easy supervision of transforming resources

Disadvantage:

 Low facilities utilization

 Can have very high work-in-progress or customer queuing

 Complex flow can be difficult to control

CELL LAYOUT OR CELLULAR LAYOUT

A cell layout is one where the transformed resources entering the operation are

pre-selected (or pre-select themselves) to move to one part of the operation

(or cell) in which all the transforming resources, to meet their immediate

processing needs, are located. Each cell can made one or a family of product

because has everything needed to produce it or them. Workers move inside the

cell based on what necessary to make the product, but value-added activities are

done by machines. Quality check is made after every step and by the workers = quality in the process = total

quality management (TQM).

After being processed in the cell, the transformed resources may go on to another cell, it attempt to bring order

to the flow of the functional layout.

The cell layout can be associated both with manufacturing and services.

→ Batch and mass processes, service shop and mass services.

Ex. the predominant layout of the ground floor of a department

store is a functional layout, with separate areas devoted to

selling each type of goods: the exception is the ‘shop-within-a-

shop’ area that is devoted to many goods that have a common

sporting theme: located in the ‘cell’ because they are needed to

satisfy of family of needs of a particular type of customer.

Advantage:

✓ Gives a compromise between cost and flexibility for relatively high-variety operations

✓ →

Fast throughput: cell is organized in line (one-piece-flow) there aren’t batches

✓ Potential good staff motivation: workers are near each other in the cell

Disadvantage:

 Can be costly to rearrange existing layout (duplication of machines)

 Can require more equipment

 Can give lower equipment utilization

LINE LAYOUT OR PRODUCT LAYOUT Line layout involves locating the transforming resources

entirely for the convenience of the transformed resources.

Each product, piece of information or customer follows a

prearranged route in which the sequence of activities required

corresponds to the sequence in which facilities have been

located.

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The transformed resources ‘flow’ along a ‘line’ according to their

‘product’ needs (standardised requirements of the product or service).

The flow is clear, predictable and therefore relatively easy to control

→ only one route. →

A product can skip one or two step of the process if not needed always forward not backward

Tasks in sequences, not parallel. If one stop working, also the sequences.

• Transformation line = activities that transform the resources

• Assembly line = activities that assemble the resources

→ Mass and continuous processes, mass services.

Es. A product layout in a paper manufacturing operation, car washing

Advantage:

✓ Low unit costs for high volume

✓ Gives opportunities for specialization of equipment

✓ Materials or customer movement is convenient

Disadvantage:

 Can have low mix flexibility

 Not very robust if there is disruption

 Work can be very repetitive

MIXED LAYOUTS Many operations either design hybrid layouts that

combine elements of some or all of the basic layout

types or use the ‘pure’ basic layout types in different

parts of the operation.

A restaurant complex with all four basic layout type:

• The kitchen is arranged in a functional layout, with the

various processes grouped together (back-office).

• The traditional service restaurant is arranged in a fixed-position layout (front-office).

The customers (transformed resources) stay at their tables while the food is brought to the tables.

• The buffet restaurant is arranged in a cell-type layout with each buffet area having all the processes (dishes)

necessary to serve customers with their starter, main course or dessert (front-office).

• In the cafeteria restaurant, all customers take the same route when being served with their meal. They may

not take the opportunity to be served with every dish but they move through the same sequence of

processes (line/product layout) (front-office).

→

Operations principles There are four basic layout types, fixed-position, functional, cell and line, although

layouts can combine elements of more than one of these.

EXERCISE: FIND THE RIGHT POSITION OF THE

SENTENCES IN THE TABLE. GROUP OF TWO

A→3 E→5

B→2 F→7

C→4 G→6

→1

D H→8

SIMULATION: What are the main differences between

functional layout and line layout?

→

Functional more time waiting for the batches (wait for the batch

to be completed for moving it)

→

Line more efficiency because there aren’t batches but there is the

bottle neck (slower worker in the center of the process), so there still

are inefficiency.

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VOLUME AND VARIETY CHARACTERISTICS OF LAYOUT TYPES

Volume-variety process position of an operation influences its

layout and, in turn, the flow of transformed input.

The importance of flow to an operation will depend on its

volume and variety characteristics:

• When volume is very low and variety is relatively high, ‘flow’

→

is not a major issue line layout.

Telecommunications satellite manufacture: fixed-position

layout because each product is different and because products

‘flow’ through the operation very infrequently, not necessary to

arrange the facilities to minimise the flow of parts trough the

operation.

• With higher volume and lower variety, flow becomes an issue.

If the variety is still high, however, an entirely flow-dominated arrangement is difficult because

o →

there will be different flow patterns functional layout. Es. Library: minimise the average

distance its customers have to ‘flow’ through the operation. But, because its customers’ needs vary,

it will arrange its layout to satisfy the majority of its customers.

variety of products or services reduces to the point where a distinct ‘category’ with similar

o →

requirements becomes evident but variety is still not small cell layout. →

variety is relatively small and volume is high, flow can become regularised Line layout

o →

Operations principles Resources in low-volume, high-variety processes should be arranged to cope with

irregular flow. →

Operations principle Resources in high-volume, low-variety processes should be arranged to cope with

smooth, regular flow.

COST ANALYSIS

The unit cost implications of the layout choice is a significant characteristic and start by distinguishing

between the fixed and variable cost elements of adopting each layout type. However, uncertainty about the

exact fixed and variable costs of each layout means the decision can

rarely be made on cost alone.

• The fixed costs of physically constructing a fixed-position layout are

relatively small compared with any other way of producing the same

product or service.

• The variable costs of producing each individual product or service

are relatively high compared to the alternative layout types (are the

cost of workers that work in line)

→ Fixed costs then tend to increase as one moves from fixed-position,

through process and cell, to line layout and the variable costs per

product or service tend to decrease.

The total costs for each layout type will depend on the volume (A.),

for any volume there is a lowest-cost basic layout.

In practice the uncertainty about the exact fixed and variable costs of

each layout means the decision can rarely be made on cost alone.

The exact cost of operating the layout is difficult to forecast and will

probably depend on many often difficult to predict factors: rather than

thin lines more appropriate to use BROAD BANDS, within which the

real cost is likely to lie.

What is the most important objective (order-winning factor) in terms of

→

performance? Quality, speed, flexibility, dependability, cost choose

the layout (reasons to move from functional to cell: less cost for lower

TT and WIP and more speed).

The discrimination between the different layout types is now far less

clear. There are ranges of volume for which any of two or three layout

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types might provide the lowest operating cost. The less certainty there is over the costs, the broader the cost

‘bands’ will be, and the less clear the choice will be. The probable costs of adopting a particular layout need

to be set in the broader context of advantages and disadvantages.

→

Operations principles Different layout types have different fixed and variable costs which determine the