Introduction to

Operations Management

Talk 4:
Process, Layout and Location
Linh Phuc
Email: [email protected]
MSTeam: [email protected]
• Reading material: Chapter 6 & 8, Stevenson, W.J. (2021). Operations Management, edition
14th. New York, USA: McGraw-Hill/Irwin.

• Case study:
P. 334 - 336, Chapter 7
P. 394 - 396, Chapter 8
P. 433 - 436, Chapter 9
Jay Heizer, Barry Render (2020). Operations Management, Sustainability and Supply chain
management, edition 13th. Pearson.
Content
• Process
01

• Layout
02

• Location
03
01 Process
A. Definition of Process
B. Different Process types

Volume

Variety
A. Definition of process
Process is one or more actions that transform inputs
into outputs.
B. Different Process types

In
Very
high
Continuous Flow
Highly standardized  c rea    
goods or services se
lev
el
Mass Repetitive o  f
High  
production Standardized goods
s tan  
Volume

or services
da
rd
Batch iza
  t
Moderate     Semi-standardized
goods or services
ion

Job Shop
Low       Customized goods
or services

Very Low Low Moderate High

 
Variety
 Advantages Disadvantages
Job Shop Able to handle a Slow, high cost per unit,
wide variety of work complex planning and
scheduling
Batch Flexibility; easy to Moderate cost per unit,
add or change moderate scheduling
products or services complexity
Repetitive Low unit cost, high Low flexibility, high cost
volume, efficient of downtime
Continuous Very efficient, very Very rigid, lack of variety,
flow high volume costly to change, very
high cost of downtime
02 Layout
A. Definition and Importance of Layout
B. Different types of layout
a) Product layouts
• Definition
• Advantages & Disadvantages
• Designing – Line Balancing
b) Process layouts
• Definition
• Advantages & Disadvantages
• Designing – Closeness Ratings
c) Fixed-position layouts
A. Definition and Importance of Layout
Layout is the configuration of departments, work centers, and equipment,
with particular emphasis on movement of work (customers or materials)
through the system.

they require substantial investments of

money and effort

Why
important they involve long term commitments, which
makes mistakes difficult to overcome
?

they have a significant impact on the cost

and efficiency of operations
B.a) Product Layout: Definition

Definition: Layout that uses standardized processing

operations to achieve smooth, rapid, high-volume flow

Used for Repetitive or Continuous Processing

B.a) Product Layout: Advantages & Disadvantages

Advantages Disadvantages
+ A high rate of output. ‐ The intensive division of labor usually creates dull,
+ Low unit cost due to high volume. The repetitive jobs that provide little opportunity for
high cost of specialized equipment is advancement and may lead to morale problems
spread over many units. and to repetitive stress injuries.
+ Labor specialization, which reduces ‐ Poorly skilled workers may exhibit little interest in
training costs and time, and results in maintaining equipment or in the quality of
a wide span of supervision. output.
+ Low material-handling cost per unit. ‐ The system is fairly inflexible in response to
Material handling is simplified changes in the volume of output or changes in
because units follow the same product or process design.
sequence of operations. Material ‐ The system is highly susceptible to shutdowns
handling is often automated. caused by equipment breakdowns or excessive
+ A high utilization of labor and absenteeism because workstations are highly
equipment. interdependent.
+ The establishment of routing and ‐ Preventive maintenance, the capacity for quick
scheduling in the initial design of the repairs, and spare-parts inventories are necessary
system. These activities do not require expenses.
much attention once the system is ‐ Incentive plans tied to individual output are
operating. impractical because they would cause variations
+ Fairly routine accounting, purchasing, among outputs of individual workers, which
and inventory control. would adversely affect the smooth flow of work
through the system.
B.a) Product Layout: Designing – Line Balancing

The process of
assigning tasks to
workstations in such
a way that the
workstations have
approximately equal
time requirements.

Chapter 6 – Material 1
Q1: Draw a precedence diagram.

a b e
0.2m 0.2m 0.3m

c f g h
d
0.8m 0.6m 1.0m 0.4m 0.3m

Chapter 6 – Material 1
Q2: Assuming an eight-hour workday, compute the
cycle time needed to obtain an output of 400 units
per day. The maximum time allowed at each workstation to complete its
set of tasks on a unit.

Min Cycle time = longest task time

Max Cycle time = sum of all task times
Q3: Determine the minimum number of workstations
required.
Groups of
individual
tasks
Q4: Assign tasks to workstations
Heuristic (intuitive) rules:
1. Assign tasks in order of most following tasks.
2. Assign tasks in order of greatest positional weight.
Positional weight = Each task’s time + Total times of all following
tasks.
No. of
Task following Positional weight
tasks
a 5 0.2+0.2+0.3+1+0.4+0.3 = 2.4m
b 4 0.2+0.3+1+0.4+0.3 = 2.2m
c 4 0.8+0.6+1+0.4+0.3 = 3.1m
d 3 0.6+1+0.4+0.3 = 2.3m
e 3 0.3+1+0.4+0.3 = 2.0m
f 2 1+0.4+0.3 = 1.7m
g 1 0.4+0.3 = 0.7m
h 0 0.3m
Q5: Compute the resulting percent idle time and
efficiency of the system.
B.b) Process Layout: Definition

Definition: Layout that can handle varied processing

requirements

Used for Intermittent processing

Job Shop or Batch
B.b) Process Layout: Advantages & Disadvantages

Advantages Disadvantages
+ The systems can handle a variety of ‐ In-process inventory costs can be high if
processing requirements. batch processing is used in manufacturing
+ The systems are not particularly vulnerable systems.
to equipment failures. ‐ Routing and scheduling pose continual
+ General-purpose equipment is often less challenges.
costly than the specialized equipment used ‐ Equipment utilization rates are low.
in product layouts and is easier and less ‐ Material handling is slow and inefficient,
costly to maintain. and more costly per unit than in product
+ It is possible to use individual incentive layouts.
systems. ‐ Job complexities often reduce the span of
supervision and result in higher supervisory
costs than with product layouts.
‐ Special attention necessary for each product
or customer (e.g., routing, scheduling,
machine setups) and low volumes result in
higher unit costs than with product layouts.
‐ Accounting, inventory control, and
purchasing are much more involved than
with product layouts.
B.b) Process Layout: Design - Closeness Ratings

Those departments which are close should:

use the same equipment or facilities.
share the same personnel or records.
require sequence of workflow.
need ease of communication.
would NOT create unsafe or unpleasant conditions.
perform similar work is performed.
 B.c) Fixed-position layout

Definition: Layout in which the product or

project remains stationary. Workers, materials,
and equipment are moved as needed
03 Location

A. General procedure
B. Factor in identifying a Country
C. Factor in identifying a Region, Community and Site
A. General procedure
1. Decide on the criteria to use for evaluating location alternatives, such as increased
revenues, decreased cost, or community service.

2. Identify important factors, such as the location of markets or raw materials. The
factors will differ depending on the type of facility. For example, retail,
manufacturing, distribution, health care, and transportation all have differing factors
that guide their location decisions.

3. Develop location alternatives:

a) Identify a country or countries for a location.
b) Identify the general region for a location.
c) Identify a small number of community alternatives.
d) Identify site alternatives among the community alternatives.

4. Evaluate the alternatives and make a selection.

B. Factor in identifying a Country
C. Factor in identifying a Region, Community and Site
Thank you