MARY THE QUEEN COLLEGE (P)

Institute of Business Education

Guagua, Pampanga

Operations Management and TQM

JESSIE D. MANAPSAL, Ph.D.

Professor
 Process Selection and Facility layout C6
• Process selection
• Refers to deciding on the way production of goods or services will be
decided. It has a major implications for capacity planning, layout of
facilities, equipment, and design of work system. Process selection occurs
as a matter of course when new products or services are being planned.

• Process choice is demand driven. The two key questions in process

selections are:
• 1. How much variety will the process need to be able to handle?
• 2. How much volume will the process need to be able to handle?
• Process types
• There are five basic process types:
• 1. Job shop. A job shop usually operates on a relatively small scale. It is
used when low volume of variety goods or services will be needed.
Processing is intermittent; work includes small jobs, each with somewhat
different processing requirements. High flexibility using general purpose
equipment and skilled workers are important characteristics of a job shop.

• 2. Batch. Batch processing is used when moderate volume of goods and

services is desired, and it can handle a moderate variety in products or
services. The equipment need not be as flexible as in job shop, but
processing is still intermittent. The skill level of workers doesn’t need to be
as high as in job because there is less variety in the jobs being process.
• 3. Repetitive. When higher volumes of more standardized goods or services
are needed, repetitive processing is used. The standardized output means
only slight flexibility of equipment is needed, Skill of workers is generally low

• 4. Continuous. When a very high volume of non-discreet, highly

standardized output is desired, a continuous system is used. These systems
have almost no variety in output and, hence, no need for equipment
flexibility. Workers’ skill requirements can range from low to high, depending
on the complexity of the system and expertise workers need. Generally, if
equipment is highly specialized, workers skills can be lowered.
• These process types are found in a wode range of manufacturing and
service settings. The ideal is to have process capabilities match products or
service requirements. Failure to do so can result in inefficiencies and higher
cost than a re necessary, perhaps creating a competitive disadvantage.
• 5. Project. A project is used for work that is nonroutine, with a unique set
of objectives to be accomplished in a limited time frame.

• Product and Service Profiling

• Process selection can involve substantial investment in equipment and
have a very specific influence on the layout of facilities, which also requires
heavy investment. Moreover, mismatches between operations capabilities
and market demand and pricing or cost strategies can have a significant
negative impact on the ability of the organization to compete or, in
government agencies, to effectively service clients. Therefore, it is highly
desirable to assess the degree of correlation between various process
choice and market conditions before making process choices in order to
achieve an appropriate matching.
• Sustainable Production of Goods and Services
• Business organizations are facing increasing pressure from a variety of
sources to operate a sustainable production processes. According to the
Lowell Center for sustainable production, “Sustainable Production is the
creation of goods and services using process and systems that are;
conserving of energy and natural resources; economically efficient; safe
and healthful for workers, com munities, and consumers; and socially and
creatively rewarding for all working people.” To achieve this, the Lowell
Center advocates designing and operating processes in ways that:
• 1. Waste and ecologically incompatible byproducts are reduced, eliminated
or recycled onsite.
• 2. Chemical substances or physical agents and conditions that present
hazards to human health or the environment are eliminated.
• 3. Energy and materials are conserved, and the forms of energy and
materials used are most appropriate for the desired ends
• 4. Work spaces are designed to minimize or eliminate chemical,
ergonomic and physical hazard.

• Lean Process Design

• Lean process design is guided by general principles. One principle of
particular interest here is waste reduction, which relates to sustainability
objectives. Lean design also focuses on variance reduction in workload
over the entire process to achieve level production and thereby improve
process flow. Successful lean design results in reduced inventory and floor
space; quicker response times and shorter lead time; reduced defects,
rework, and scrap, increased productivity.
• Technology
• Technology and technological innovation often have a major influence on
business processes.
• Technological innovation refers to the discovery and development of
new or improved products, services, or process for producing or providing
them.
• Technology refers to the application of scientific knowledge to the
development and improvement of goods and services and or that
processes that produce or provide them.
• High technology refers to the most advanced and developed equipment
and or methods.
• Process technology and information technology can have a major impact
on costs, productivity and competitiveness.
• Process technology includes methods, procedure and equipment used to
produce goods and provide services.
• Information technology is the science and use of computers and other
electronic equipment to store, process, and send information. IT is heavily
ingrained in today’s business operations. This includes data processing,
the use of bar codes and radio frequency tags to identify and track goods,
devices and used to obtain point-of-sale information, data transmission,
the internet, e-commerce, e-mail and more.
• Technological innovation in processing technology can produce
tremendous benefits for organization by increasing quality, lowering cost,
increasing productivity, and expanding processing capabilities.
• Automation
• An increasing asked questions in process design is whether to automate.
Automation is machinery that has sensing and control devices that enable
it operate automatically. If a company decides to automate, the next
question is how much. Automation can range from factories that are
completely automated to a single automated operation.
• Automation offers a number of advantages over human labor. It has low
variability, whereas it is difficult for a human to perform a task in exactly the
same way, in the same amount of time , and on a repetitive basis.
• Automation is frequently touted as a strategy necessary for
competitiveness. However, automation also has certain disadvantages and
limitations compared to human labor. To begin with, it can be costly.
Technology is expensive; usually it requires high volumes of output to offset
high cost. In addition, automation is much less flexible than human labor.
• Generally, there are three kinds of automation:
• 1. Fixed
• 2. Programmable
• 3. Flexible

• Fixed automation is the least flexible. It uses high-cost, specialized

equipment for a fixed sequence of operations. Low cost and high volume
are its primary advantages; minimal variety and the high cost of making
changes in either product or process are the primary limitations
• Programmable automation involves the use of high-cost, general
purpose equipment controlled by a computer program that provides both
the sequence of operations and specific details about each operation. This
type of automation has the capacity of economically producing a fairly wide
variety of lo-volume products in small batches.
• Computer aided manufacturing (CAM) refers to the use of computers in
process control, ranging from robots to automated quality control.
Numerically controlled (N/C) machines are programmed to follow a set
of processing instructions based on mathematical relationship that tell the
machine the details of operations to be performed.
• N/C machines are best used in cases where parts are processed
frequently and in small batches, where part geometry is complex, close
tolerances are required, mistakes are costly, and there is the possibility of
frequent changes in design.
• Flexible automation evolved from programmable automation. It uses
equipment that is more customized than that of programmable automation.
A key difference between the two is that flexible automation requires
significantly less changeover time. This permits almost continuous
operations of equipment and product variety without the need to produce
in batches.
• Flexible manufacturing system (FMS) is group of machines that include
supervisory computer control, automatic material handling, and robots or
other automated processing equipment.
• Computer-integrated manufacturing (CIM) is a system that uses an
integrating computer to link a broad range of manufacturing activities,
including engineering design, flexible manufacturing system, purchasing,
order processing and production planning and control.
• 3D Printing
• A 3D printer is a type of industrial robot that is controlled using computer
assisted design (CAD).
• 3D printing, also known as additives manufacturing, involves processes
that create three-dimensional objects by applying successive layers of
materials to create the object
• The use of 3D scanning technologies allows the replication of objects
without the use of molds. That can be beneficial in cases where molding
are difficult and costly or where contact with the substances used in
molding processes could harm the original item.
• Drones
• Drones are remotely controlled unmanned aircraft, usually small. An
important benefit is providing an eye in the sky to obtain visual detail in
places that are not really accessible. For example drones are proving to be
very helpful in assessing storm and earthquake damage, especially in
situations where access by vehicle or on foot is difficult or impossible due
to the terrain, debris, or where roads or bridges are impassable.
• Despite these many benefits, to use of drones poses a number of issues.
There is this possibility of collisions with other drones, power lines, birds,
or other objects, as well as mechanical failure or operator error, any of
which can result in failure to accomplish the intended task. In addition,
crashes have the potential to injure nearby humans or cause damage to
property.
• Process strategy
• Throughout this book, the importance of flexibility as a competitive strategy
is stressed. However, flexibility does not always offer the best choice in
processing decisions. Flexible systems and equipment are often more
expensive and not as efficient as less flexible alternatives. In certain
instances, flexibility is unnecessary because products are in mature
stages, requiring few design changes, and there is steady volume of
output. Ordinarily, this type of situation calls for specialized processing
equipment, with no need for flexibility. The implication is clear. Flexibility
should be adopted with great care; its applications should be matched with
situations in which a need for flexibility clearly exists.
• In practice, decision makers choose flexible systems for either of two
reasons: Demand variety or uncertainty exists about demand. The second
reason can be overcome through improved forecasting.
• Strategic Resource Organization: Facilities Layout
• Layout refers to the configuration of departments, work centers, and
equipment with particular emphasis on movement of work (customers or
materials) through the system.
• As in other areas of system design, layout decisions are important for
three reasons:
• 1. They require substantial investments of money and effort
• 2. They involve long-term commitments, which makes mistakes difficult to
overcome
• 3. They have a significant impact on the cost and efficiency of operations
• The need for layout planning arises both in the process of designing new
facilities and in redesigning existing facilities. The most common reasons
for redesign of layouts include inefficient operations, accidents or safety
hazards, changes in the designs of products or services, introduction of
new products and services, changes in the volume of outputs or mix
outputs, changes in methods or equipment, changes in environmental or
other legal requirements, and moral problems.
• Poor layout design can adversely affect system performance.
• The basic objective of layout design is to facilitate smooth flow of work,
material and information through the system. Supporting objectives
generally involve the following:
• 1. To facilitate attainment of product or service quality
• 2. To use workers and space efficiently
• 3. To avoid bottlenecks
• 4. To minimize material handling costs
• 5. To eliminate unnecessary movements of workers or materials
• 6. To minimize production time or customer service time
• 7. To design for safety

• The three basic types of layout are:

• 1. Product
• 2. Process
• 3. Fixed position
• Repetitive Processing: Product layouts
• Products layouts are used to achieve smooth and rapid flow of large
volumes of goods or customers through a system. This is made possible
by highly standardized goods or services that allow highly standardized ,
repetitive processing. The work is divided into a series of standardized
tasks, permitting specialization of equipment and division of labor. The
large volumes handled by the these systems usually make it economical to
invest substantial sums of money in equipment and job design.

• The main advantages of product layouts are:

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

• U-Shaped Layouts
• Although a straight production line may have intuitive appeal, a U shape line
has a number of advantages that make it worthy of consideration. One
disadvantage of a long, straight line is that it interferes with cross-travel of
workers and vehicles. A U-shaped line is more compact, it often requires
approximately half the length of a straight production line. In addition U-shaped
permits increased communication among workers on the line because workers
are clustered, thus facilitating teamwork. Flexibility in work assignments is
increased because workers can handle not only adjacent station but also
stations on opposite side of the line. Moreover, if materials enter the plant at
the same point that finished products leave it, a U-shaped line minimizes
material handling.
• Nonrepetitive Processing: Process Layouts
• Process layouts (functional layouts) are designed to process items or
provide services that involve a variety of processing requirements. The
variety of jobs that are processed requires frequent adjustments to
equipment. This causes a continuous work flow, which is referred to as
Intermittent processing.
• Process layouts are quite common in service environments. Examples
include hospitals, colleges and universities, banks, auto repair shops,
airlines, and public libraries.
• Because equipment in a process layout is arranged by type rather than by
processing sequence, the system is much less vulnerable to shutdown
caused by mechanical failure or absenteeism. In manufacturing systems
especially, idle equipment is usually available to replace machines that are
temporarily out of service.
• In sum, process layouts have both advantages and disadvantages. The
advantages are:
• 1. The system can handle a variety of processing requirements
• 2. The system are not particularly vulnerable to equipment failures
• 3. General purpose equipment is often less costly than the specialized
equipment used in product layouts and its easier and less costly to
maintain
• 4. It is possible to use individual incentive system
• The disadvantages of process layouts include the following:
• 1. In process inventory costs can be high if batch processing is used in
manufacturing system.
• 2. Routing and scheduling pose continual challenges.
• 3. Equipment utilizations are low.
• 4. Material handling is slow and inefficient, and more costly and more costly
per unit than in product layouts.
• 5. Job complexity often reduce the span of supervision and result in higher
supervisory costs than with product layouts.
• 6. Special attention necessary for each product and customer and low
volume result in higher unit costs than with product layouts.
• 7. Accounting, inventory control, and purchasing are much more involved
than with product layouts.
• Fixed-Position Layouts
• In fixed position layouts, the item being worked on remains stationary, and
workers, materials, and equipment are moved about as needed. This is in
marked contrast to product and process layouts. Almost, always, the
nature of the products dictates this kind of arrangement: Weight, size, bulk,
or some other factor makes it undesirable or extremely difficult to move the
product. Fixed position layouts are used in large construction projects,
shipbuilding, and production of large aircraft and space mission rockets. In
those instances, attention is focused on timing of material and equipment
deliveries so as not to clog up the work site and to avoid having to relocate
materials and equipment around the work site.
• Combination Layouts
• The three basic layout types are ideal models, which may be altered to