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McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Chapter 6
Process Selection
and
Facility Layout
6-2
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Process Selection and System Design
Forecasting
Product and
service design
Capacity
planning
Facilities and
Equipment
Layout
Work
design
Process
selection
Technological
change
Process selection defines the way production is organized,
how things will be done
6-3
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Process Strategy
How an organization approaches the
process selection process
Important concerns:
Make or buy?
Capital intensity
Process flexibility
6-4
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Introduction
Make or Buy?
Available capacity
Expertise
Quality Consideration
The nature of demand
Cost
6-5
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Product Variety
How much
Process Flexibility
What degree will be required
Volume
Expected output
Process Selection
6-6
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Process Types
Job Shops
Small runs, high variety
Requires skilled labor and flexible
equipment
Batch Processing
Moderate volume, moderate variety,
moderate skill
Repetitive/Assembly
Semicontinuous
Higher volume, more standardized, less
flexibility and skill required
6-7
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Process Types
Continuous Processing
High volume, highly standardized
Projects
Nonroutine jobs, limited duration
Large products like buildings

6-8
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Product
Variety
High Moderate Low Very Low
Equipment
flexibility
High Moderate Low Very Low
Low
Volume
Moderate
Volume
High
Volume
Very high
Volume
Job
Shop
Batch
Repetitive
assembly
Continuous
Flow
Variety, Flexibility, & Volume
Job Shop
6-9
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Automation: Machinery that operates automatically,
with little or no human intervention
Advantages:
Consistency
Elimination of negative human factors
Reduced variable costs
Disadvantages
High initial investment
High fixed costs
Requires high volume to offset costs
Less flexible than human labor
Can hurt worker morale
Automation
6-10
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Automation
Computer-aided design and
manufacturing systems (CAD/CAM)
Numerically controlled (NC) machines
Robot
Manufacturing cell
Flexible manufacturing systems
Computer-integrated manufacturing
(CIM)
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McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Management of Technology
Potential effects of new technology:
Improved quality
Increased productivity
Reduced production times
Increased customer satisfaction
Reduced flexibility
Increased fixed costs
Short-term disruptions
Increased training costs
Difficult integration with existing systems
6-12
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Service blueprint: A method used in service
design to describe and analyze a proposed
service.
Steps:
Establish boundaries and determine the required level of
detail
Identify and describe the steps of a process
Flowchart key process steps
Identify potential failure points
Establish a time frame for service execution and estimate
variability
Analyze profitability and zero in on process steps with the
biggest impact
Service Blueprint
6-13
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Layout: the configuration of departments,
work centers, and equipment, with particular
emphasis on movement of work (customers
or materials) through the system
Important because:
Require substantial investments of time and
money
Involve long-term commitments
Significant impact on cost and efficiency
Layout
6-14
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Layout
Reasons to redesign an existing layout:
Inefficiency
Accidents or safety hazards
Changes in product design
Introduction of new products
Changes in output volume or mix
Changes in regulations
6-15
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Basic Layout Types
Product Layouts
Process Layouts
Fixed-Position
Combination Layouts
6-16
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Product Layout
Work divided into a series of standard tasks that every
unit goes through
Often uses fixed-path material handling
Entire line can be shut down by one mechanical failure
Advantages:
High output
Low unit cost
Labor specialization reduces training costs
High utilization rate of labor and equipment
Disadvantages
Dull, repetitive jobs
Not very flexible to product design or volume changes
Susceptible to shutdowns
6-17
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
A Flow Line for Production or Service

Flow Shop or Assembly Line Work Flow


Raw
materials
or customer
Finished
item
Station
2
Station
3
Station
4
Material
and/or
labor
Statio
n
1
Material
and/or
labor
Material
and/or
labor
Material
and/or
labor
6-18
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
A U-Shaped Production Line
1
2 3 4
5
6
7
8 9 10
In
Out
Workers
6-19
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Process Layout
Work divided into departments, each of which
handles a given process
Products follow different paths depending on
processing requirements
Equipment must be more general-purpose
Advantages:
More flexible
Not as vulnerable to shutdowns
General-purpose equipment often cheaper than specialized
Disadvantages:
Routing and scheduling can be difficult
Low utilization rates
More costly material handling
Complex jobs can lead to higher supervision costs
6-20
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Process Layout
Process Layout - work travels
to dedicated process centers
Milling
Assembly
& Test
Grinding
Drilling
Plating
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McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Functional Layout
Gear
cutting
Mill
Drill
Lathes
Grind
Heat
treat
Assembly
111
333
222
444
222
111
444
111 333
1111 2222
222
3333
111
444
111
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McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Fixed Position Layout
Layout in which the product or project remains
stationary, and workers, materials, and equipment
are moved as needed
Requires special attention to time materials and
workers to prevent clogging up the jobsite
6-23
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Design Product Layouts: Line Balancing
Line Balancing is the process of assigning
tasks to workstations in such a way that
the workstations have approximately
equal time requirements.
6-24
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Cycle Time
Cycle time is the maximum time
allowed at each workstation to
complete its set of tasks on a unit.
6-25
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Determine Maximum Output
Output capacity =
OT
CT
OT operating time per day
D = Desired output rate
CT = cycle time =
OT
D

6-26
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Determine the Minimum Number
of Workstations Required: Efficiency
N =
(D)( t)
OT
t = sum of task times

6-27
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Precedence Diagram
Precedence diagram: Tool used in line balancing
to display elemental tasks and sequence
requirements
A Simple Precedence
Diagram
a
b
c d
e
0.1 min.
0.7 min.
1.0 min.
0.5 min. 0.2 min.
6-28
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Example 1: Assembly Line Balancing
Arrange tasks shown in the previous
slide into workstations.
Use a cycle time of 1.0 minute
Assign tasks in order of the most number of
followers
6-29
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Solution to Example 1
Work-
Station
Time
Remaining Eligible
Assign
Task
Station
Idle Time
1 1.0
.9
.2
a
c
none
a
c
- .2
2 1.0
0
b
none
b
- 0
3 1.0
.5
.3
d
e
-
d
e
- .3
.5
6-30
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Calculate Percent Idle Time
Percent idle time =
Idle time per cycle
(N)(CT)
6-31
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Line Balancing Rules
Assign tasks in order of most
following tasks.
Assign tasks in order of greatest
positional weight.
Positional weight is the sum of each
tasks time and the times of all
following tasks.
Some Heuristic (intuitive) Rules:
6-32
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Solution to Example 2
Station 1 Station 2 Station 3 Station 4
a b
e
f
d
g
h
c
6-33
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Parallel Workstations
1 min. 2 min. 1 min. 1 min.
30/hr. 30/hr. 30/hr.
30/hr.
1 min.
1 min.
1 min. 1 min.
60/hr.
30/hr.
30/hr.
60/hr.
1 min.
30/hr.
30/hr.
Bottleneck
Parallel Workstations
6-34
McGraw-Hill/Irwin
Operations Management, Seventh Edition, by William J. Stevenson
Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Process Selection and Facility Layout
Requirements:
List of departments
Projection of work flows
Distance between locations
Amount of money to be invested
List of special considerations
Designing Process Layouts