Operations Management – The Importance of Process and Layout Designs

Operations Management covers a variety of management concerns that relate to planning and coordinating organizations resources. William J. Stevenson and Mehran Hojati authors of Operations Management also indicate “a large percentage of a company’s expenses occur in the operations area”. Stevenson and Hojati also go on to state that process and layout designs are amongst one of the most important decision a manager must undertake. These decisions have a long term impact on the organization and its values. If process and layout designs are not kept a top priority this causes inefficient operations and can lead to many drawbacks within the organization. Amine Drira, Henri Pierreval and Sonia Hajri-Gabouj from the article Facility layout problems: A survey also assert that “Layout problems are found in several types of manufacturing systems. Typically, layout problems are related to the location of facilities (e.g.,machines, departments) in a plant. They are known to greatly impact the system performance”. Furthermore the authors of the article also indicate that placement of certain facilities within the plant can have a significant impact on an organizations manufacturing costs, work in process, lead times and productivity. An advantage of a systematized placement of a facilities layout contributes to the overall efficiency of operations and can also reduce 50% of the total operating expenses. With the variety of considerations found within the article many organizations and researchers cannot agree upon common definitions that cause certain “layout problems”.

A facility layout can be defined as an arrangement of all that is needed for production of a good or a delivery of service, and a facility is a unit that enables the routine of a certain job an example being a warehouse (Drira, Pierreval and Gabouj). Many factors come in to play when dealing with inefficient layout problems that cause productivity matters. One of the most encountered is Static layout problems which arise when operations management assumes that the primary data and products the workshop produces will remain constant over a long period of time. In addition to that, it is also well known that manufacturing plants must be able to respond quickly to changes in demand and production volume (Drira, Pierreval and Gabouj). Drira, Pierreval and Gabouj have investigated further and have identified that 1/3 of USA Company’s restructure their production facilities every 2 years. This is where a concept of Dynamic layout takes into account possible changes in the production facilities. Dynamic layout deals with changes in material handling over multiple periods (months, weeks or years) and reorganizing production in sequences. However in many cases data that affects layout problems are not exactly known for each period and to constantly change handling procedures can also carry high costs. Taking in to consideration many organizations do reorganize their production facilities and the concept of Fuzzy logic has been introduced to handle the imprecision or uncertainty within Dynamic layouts. Drira, Pierreval and Gabouj indicate that there are a few approaches based on fuzzy concepts exist to design layouts.

There are four main types of layouts Drira, Pierreval and Gabouj indicate within organizations and production facilities such as fixed product layout, process layout, product layout and cellular layout. With a Fixed product layout, the product does not normally circulate within the production facility but resources such as machines, workers, etc. are utilized as they perform operations. This type of layout is commonly found in such industries that manufacture ships or aircrafts usually large size products (Drira, Pierreval and Gabouj). Process layout arranges facilities with similar functions together and group similar activities. An example of a process layout would be a department store where there are many different sections such as menswear, women’s apparel and home appliances. Drira, Pierreval and Gabouj describe Product layout for organizations that have high production volumes and a low assortment of products. Products tend to move quickly an example being an assembly line. S.N. Chary author of Production and Operations Management asserts that a disadvantage of a Product layout is the lack of ability to change product designs easily. The fourth type of layout discussed is Cellular where machines are grouped into cells to process similar parts; similar machines are also placed close together.

The primary objective of selecting a layout is to minimize a function related to the travel of parts meaning the total material handling cost, the travel time and travel distance (Drira, Pierreval and Gabouj). Present day, when it comes to construct a factory in an urban area land supply is generally insufficient and open land is generally expensive. Many organizations have limited availability of horizontal space and must create a vertical dimension within the facility making the layout design more complex. As an organization develops and plans strategies to cope with challenges that arise in an operating environment; a system should be designed so that it is capable of producing quality products in an acceptable time frame.  As summarized in an article produced by http://www.INC.com “Facility layout and design is an important component of a business’s overall operations, both in terms of maximizing the effectiveness of the production process and meeting the needs of employees”. In conclusion layout planning is very important as it eliminates unnecessary costs for space and materials handling which leads to producing goods and services at a higher rate.

Describe four major types of facility layouts?

Chary, S. N. (2006). Production and operations management (4th ed.). New Delhi: Tata McGraw-Hill.

Drira, A., Hajri-Gabouj, S., & Pieeval, H, Facility layout problems: A survey, Annual Reviews in Control, Volume 31, Issue 2, 2007, Pages 255-267, ISSN 1367-5788, 10.1016/j.arcontrol.2007.04.001. http://www.sciencedirect.com.ezproxy.kwantlen.ca:2080/science/article/pii/S1367578807000417

“Facility Layout and Design – Encyclopedia – Business Terms | Inc.com.” Small Business Ideas and Resources for Entrepreneurs. Web. 01 Feb. 2012. <http://www.inc.com/encyclopedia/facility-layout-and-design.html&gt;.

Ibolya Jankovits, Chaomin Luo, Miguel F. Anjos, Anthony Vannelli, A convex optimisation framework for the unequal-areas facility layout problem, European Journal of Operational Research, Volume 214, Issue 2, 16 October 2011, Pages 199-215, ISSN 0377-2217, 10.1016/j.ejor.2011.04.013.

Ma Carmen González-Cruz, Eliseo Gómez-Senent Martínez, An entropy-based algorithm to solve the facility layout design problem, Robotics and Computer-Integrated Manufacturing, Volume 27, Issue 1, February 2011, Pages 88-100, ISSN 0736-5845, 10.1016/j.rcim.2010.06.015.

Stevenson, William J., and Mehran Hojati. Operations Management. Toronto: McGraw-Hill Ryerson, 2011. Print.

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