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Process Choice and Layout Decisions in Manufacturing and Services Chapter 7. Chapter Objectives. Be able to: Describe the five classic types of manufacturing processes. Discuss how different manufacturing and service process choices support different market requirements.

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Process Choice and Layout Decisions in Manufacturing and Services Chapter 7

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chapter objectives
Chapter Objectives

Be able to:

  • Describe the five classic types of manufacturing processes.
  • Discuss how different manufacturing and service process choices support different market requirements.
  • Explain how different processes can be linked together via the supply chain.
  • Describe the critical role of customization in manufacturing, including the degree and point of customization, and upstream versus downstream activities.
  • Discuss the three dimensions that differentiate services from one another and explain the different managerial challenges driven by these dimensions.
  • Create and interpret a service blueprint.
  • Position a service on a conceptual model and explain the underlying managerial challenges.
  • Develop a product-based layout using line balancing and calculate basic performance measures for the line.
  • Develop a functional layout based on total distance traveled.
manufacturing processes
Manufacturing Processes
  • Engineering and business perspectives
  • Classic manufacturing processes
  • Choosing between classic types
  • The role of customization
solid wood seat for a kitchen chair
Process A

Saddle Machine

Shaper Machine

Sander A

Sander B


Setup Time: 6 hours

Time/Seat 1.1 min.

Yield Rate: 92%

Process B

5-Axis Router


Sander A

Sander B


Setup Time: 10 min.

Time / Seat: 3.5 min.

Yield Rate: 99%

Solid Wood Seat for a Kitchen Chair:
classic engineering viewpoint
Classic Engineering Viewpoint
  • Four Transformation Processes

Conversion  Fabrication Assembly


“Advances in Engineering increase and improve the alternatives available”

example making windows
Example: Making Windows




  • Raw lumber
  • Molten glass
  • Frame wood
  • Window panes



business view
Business View
  • What conversion steps must be done?
  • What are the production volumes like?
  • How similar are the various products we make (can we standardize)?
  • If the product is customized, how late in the process does it occur?
process types in order of decreasing volume
Process Types(in order of decreasing volume)
  • Continuous Flow
  • Production Line
  • Batch (High Volume)
  • Batch (Low Volume)
  • Job Shop
  • Project
continuous flow
Continuous Flow
  • Large production volumes
  • High level of automation
  • Basic material passed along, converted as it moves
  • Usually cannot be broken into discrete units
  • Usually very high fixed costs, inflexible

Oil refinery, fiber formation, public utilities, automotive manufacturing

production line
Production Line

High-volume production of standard products or “design window”

  • Processes arranged by product flow
  • Often “paced” (‘takt’ time discussed later)
  • Highly efficient, but not too flexible
batch i
Batch I
  • Somewhere in between job shop and line processes
  • Moderate volumes, multiple products
  • Production occurs in “batches”
  • Can manufacturing, carton makers, advertising mailers, etc.
batch ii
Batch II

Layout is a cross between that found in a line and that found in a job shop:

Group Technology

some examples of batch manufacturing
Some Examples of Batch Manufacturing
  • Numerical control (NC) machines
    • Automated processing of entire batch
    • Machining center - multiple NC machines
  • Flexible manufacturing systems (FMS)
    • Dedicated to families of parts
    • NC and automated handling
  • Group technology
    • Similar in concept to FMS, but not as much automation
job shop
Job Shop
  • Low volume, one-of-a-kind products
  • Job shops sell their capability
  • Highly flexible equipment, skilled workers
  • Equipment arranged by function
  • Used when a product is:
    • one-of-a-kind
    • too large to be moved
  • Resources moved to where needed
  • Equipment, people, etc. are highly flexible
  • Finite duration, often with deadline

Construction projects, equipment installation

mixing together the process types hybrid process
Mixing Together the Process Types  Hybrid Process




putting together

final product

Arms and




parts ...


choosing between classic types

Choosing BetweenClassic Types

The product-process matrix

Product and process life cycles

product process matrix
Product – Process Matrix

Very Poor Fit

Very Poor Fit

introduction stage
Introduction Stage

Availability key to market success but:

  • No reliable movement history
  • Unreliable forecasts
  • Small shipments
  • Erratic orders
life cycle planning framework24
Life-Cycle Planning Framework
  • High
  • product
  • availability
  • Flexibility
  • to handle
  • variation
growth stage
Growth Stage
  • Sales somewhat more predictable
  • Higher volumes
  • Performance emphasis?...
life cycle planning framework26
Life-Cycle Planning Framework
  • Availability
  • Achieve break-
  • even volumes
  • as soon as
  • possible
  • Less need
  • for flexibility
maturity stage
Maturity Stage
  • Intense competition around more standardized products
  • Frequent price and service adjustments
  • Implications . . .
life cycle planning framework28
Life-Cycle Planning Framework

More selective,

targeted efforts



decline stage obsolescence
Decline Stage(Obsolescence)
  • Product close-out or restricted distribution
  • Lowest cost / differentiated performance not as critical anymore
  • Priorities?
life cycle planning framework30
Life-Cycle Planning Framework
  • Centralized
  • inventory
  • Speed
  • What happens to process choices as companies follow products through their life cycles?
  • What happens to process choices when companies support products at various stages of the life cycle?
what is customization
What is “Customization”?

An operations-centric view: “Customization occurs when a customer’s unique requirements directly affect the timing and nature of operations and supply chain activities”

customization point model i
Customization Point Model I


ETO – engineer to order

MTO – make to order

ATO – assemble-to-order

MTS – make to stock

Upstream: before the customization point, “off-line” activities

Downstream: after the customization point, “on-line” activities

make to order windows
Off-line Activities


Buy Materials

Fabricate parts


Ship windows

On-Line Activities

Lead times?



What type of manufacturing?

Sell windows

Make-to-Order Windows
an operations centric view
An Operations-Centric View

Customization becomes relevant to operations and supply chain managers when a customer’s unique requirements directly affect the timing and nature of operations and supply chain activities

Job Difficulty

Job Routineness

Operations and

Supply Chain Design


law of variability

Law of Variability

The earlier customization is introduced in the supply chain, the greater the random variability of the process and the lower its productivity

  • What makes them distinctive?
  • High-contact versus low-contact
  • Front room versus back room
  • Service Blueprinting
Services . . .
  • Process and “product” are inseparable
  • Marketing and sales often tightly integrated
  • Customer often part of the process
  • Performance metrics can be harder to define
  • Nevertheless:
    • Focus and process choices / trade-offs still apply
degree of customer contact
Low Contact


Can locate for efficiency

Can smooth out the workload

Check clearing, mail sorting

High Contact


Can locate for easy access

Flexibility to respond to customers

Harder to manage

Hospitals, food service

Degree of Customer Contact
classifying services
Classifying Services

“Front Room”versus“Back Room”

Front room – what the customer can see

Managed for flexibility and customer service

Customer lobbies, bank teller, receptionist

Back room – what the customer does not see

Managed for efficiency and


Package sorting, car repair, blood test analysis, accounting department

what is it what is the performance objective
What is it?What is the performance objective?
  • Restaurant kitchen
  • Software help desk
  • Kinko’s copy center
  • Airline reservations
  • Jet maintenance
designing services
Designing Services
  • Selecting a service focus
    • Like manufacturing processes, different services have strengths and weaknesses
  • Key is to design a service process that meets the needs of targeted customers
  • The “service package”
service blueprinting

Customer actions

Onstage activities

Backstage activities



Line of interaction

Line of visibility

Line of internal interaction

Service Blueprinting
community hospital
Community Hospital

Public Hospital

birthing center
Birthing Center

Public Hospital

layout decision models
Layout Decision Models
  • Product-based layout
    • Usually best for a line operation
    • Cycle time a primary measure
  • Functional layout
    • Usually best for a job shop
    • Distance between steps a measure
  • Cellular layout
    • Usually best for batch processes
product based layout
Product-Based Layout

Line Balancing

  • Improve ‘Takt’ time:
    • Use minimum number of workstations
    • Reduce idle time
    • Reduce setup time
    • Reduce unnecessary movement
    • Identify ‘bottlenecks’
process layout steps
Process Layout Steps
  • Identify all steps, their relationships, and times required.
  • Draw a precedence diagram
  • Determine takt time (time available divided by desired output rate)
  • Determine minimum number of workstations required (total process time divided by takt time)
  • Assign tasks to workstations according to precedence and total time for each to not exceed takt time.
  • Evaluate solution for times per workstation, % idle time, and efficiency delay (100% - % idle time)
functional layout improvement
Functional Layout Improvement
  • Minimize the total distance traveled
    • Determine distances between functional units
    • Determine numbers of interactions between units
    • Multiply distances times respective number of interactions
    • Revise original layout for minimum total distance after first locating functions best for process material flows
  • Minimize information flow for decisions
  • Use electronic data interchange (EDI) to allow more flexibility for accomplishing A and B