Product vs Process Layout

March 25, 2018 Management

II. Introduction Product Layout is not always better than process layout. I disagree with the statement. To understand the reasons behind why this is not true, this paper details the concept of layout, differences between the layouts and applicability of product and process layout. Facility layout is the physical arrangement of equipment, offices, rooms and other resources within an organization. It describes the location of resources and their relationship to each other. Layout planning aims to organize the physical arrangement of facilities so that operations run as efficiently as possible.

The content section describes the reasons behind why the statement is not true. ? III. Content Every organization has to consider the layout of its operations, whether it is a shop, manufacturer, warehouse, office or government debating chamber. Well-laid-out facilities are efficient and allow products to flow easily and smoothly through the process: poorly laid-out facilities disrupt operations and reduce efficiency. The purpose of layout planning is to arrange the facilities so that the process can run as smoothly as possible.

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There are five general types of layout: ?process layout – which puts similar resources together; ? product layout – which puts resources for a particular product together; ? hybrid layout – which is some mixture of these two; ?fixed-position layout – where everything is done in the same place; ? specialized layouts, such as retail shops, offices and warehouses. The choice of layout depends on the objectives and constraints on the process. Typical objectives are to use a minimum amount of resources, or to achieve the maximum possible output.

Other objectives minimize the cost of movement, minimize the amount of handling, minimize the area used, maximize visibility, give secure operations, give attractive appearance, increase customer access, and so on. There can be many types of constraints on the layout, including the planned capacity, total space available, building used, material handling equipment, capital available, need for service areas, safety needs, and so on. The best type of layout is clearly related to the type of process. 1. PRODUCT LAYOUT A product layout groups together all the facilities and equipment used to make a particular product.

A common form of product layout is a production line in manufacturing. Departments or machines are arranged according to the sequence of tasks to produce the product. 2. ADVANTAGES & DISADVANTAGES OF PRODUCT LAYOUT Advantages of product layouts include: •They can achieve a high rate of output; •High equipment use gives low unit costs; •Materials handling is easy with low stocks of work in progress; •Scheduling and controlling operations is easy. •High volume •Low unit cost •Low labor skill needed •Low material handling •High efficiency and utilization •Simple routing and scheduling Simple to track and control •Processing rates are faster •Material handling costs are lower •Less space required for inventories •Wide use of automation Disadvantages of product layouts include: •operations are inflexible and it is difficult to change the output rate, product or process; •equipment failure and routine maintenance can disrupt the whole process; •equipment may be specialized and expensive, needing a high initial investment; •people often do not like working in process layouts as the repetitive work can be boring •High capital intensity •Less volume or design flexibility Boring for labor oLow motivation oLow worker enrichment •Can not accommodate partial shut downs/breakdowns •Individual incentive plans are not possible 3. PROCESS LAYOUT In a process layout all similar equipment and other facilities are grouped together. Offices use a process layout when they put all accountants in one area, all purchasing people in another, all reference books in another, and so on. This layout works best when different products use the same resources, and every product follows a different route through them. Each product uses the facilities in a different sequence.

Departments are arranged in such a way that each department performs the same activities or processes. A common objective in designing such a layout is to arrange workcenters that have high interaction closer to each other so as to minimize the flow of material. Materials move between different departments depending on the process stages. For e. g they may go from Dept 3 to Dept 6 to Dept 4 and then again to Dept 3 for some other process. 4. ADVANTAGES & DISADVANTAGES OF PROCESS LAYOUT Advantages of process layouts include: •A variety of products can be made on the same facilities. Operations continue if some equipment cannot be used because of breakdown or planned maintenance. •It is suitable for low volumes and variable demand. •People work in cohesive groups and generally enjoy the environment. •General purpose & flexible resources •Lower capital intensity & automation •Higher labor intensity •Resources have greater flexibility Disadvantages of process layouts include: •Small batches give lower utilization of equipment and unit costs can be high. •Movement of jobs between operations is complicated, with larger stocks of work in progress. Scheduling work on equipment is complicated and must be done continuously. •Controlling the work is difficult. •There is a lot of handling of products and materials. •Processing rates are slower •Material handling costs are higher •Scheduling resources & work flow is more complex •Space requirements are higher 5. PRODUCT VS PROCESS LAYOUT Here is a comparison between the two layouts Process LayoutProduct Layout Less machine utilizationHigh machine utilization Suited for medium volume production with a wide variety of products High volume production with less variety of products Fewer spare partsMore spare parts

Low vulnerability to production shutdownHigh vulnerability to production shutdown Each type of manufacturing process will require a different type of a layout depending upon suitability and applicability of the layout to the process. Below are a few examples – Type of processUsual type of layout Example jobbingprocesshospital kitchens massproduct assembly line continuousproduct oil refinery ? IV. Conclusion In conclusion, a good layout is one that meets all expectations, such as minimizing cost, convenience to employees and management, easy material handling, optimum cost, ease of transport, inspection.

Designing a layout requires substantial investments of money and effort, involves long-term commitments and has significant impact on cost and efficiency of short-term operations. Each type of industry and manufacturing process will require a different type of layout. For instance car or mobile phone manufacturers may find that a product layout is more suitable and cost effective, whereas process layout may be more applicable for tool & die shops, university departments. Thus product layout is not always better than process layout.

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