Nigel S., Chambers S., Johnson R. Operations Management
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Figure 7.6 shows the sequence of processes in a paper-making operation. Such an operation
would use product layout. Gone are the complexities of flow which characterized functional
layouts, and to a lesser extent cell layouts, and although different types of paper are produced
in this operation, all types have the same processing requirements.
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Figure 7.6 The sequence of processes in paper-making; each process will be laid out in the same sequence
Figure 7.5 The ground floor plan of a department store showing the sports goods shop-within-a-shop retail ‘cell’
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Mixed layouts
Many operations either design themselves hybrid layouts which combine elements of some
or all of the basic layout types, or use the ‘pure’ basic layout types in different parts of the
operation. For example, a hospital would normally be arranged on functional-layout prin-
ciples, each department representing a particular type of process (the X-ray department, the
surgical theatres, the blood-processing laboratory, and so on). Yet within each department,
quite different layouts are used. The X-ray department is probably arranged in a functional
layout, the surgical theatres in a fixed-position layout, and the blood-processing laboratory
in a product layout. Another example is shown in Figure 7.7. Here a restaurant complex is
Chapter 7 Layout and flow
185
The Yamaha Corporation of Japan, founded in 1887, has
grown to become the world’s largest manufacturer of
musical instruments, as well as producing a whole variety
of other goods, from semiconductors and robots through
to sporting goods and furniture. In recent years it has
developed a reputation for product diversification, an
understanding of new markets and, especially, innovative
manufacturing methods. For example, it was one of the
first piano manufacturers to make up-market grand
pianos using assembly line techniques (the picture shows
grand pianos being assembled in the same way as motor
vehicles). Traditionally, grand pianos (as opposed to the
less expensive and better-selling upright pianos) were
made using individual build methods which relied on
craft skills. The main advantage of this was that skilled
workers could accommodate individual variations in the
(often inconsistent) materials from which the piano is
made. Each individual piano would be constructed around
Short case
Yamaha tunes its assembly lines
the idiosyncrasies of the material to make a product
unique in its tone and tuning. Not so with Yamaha, which,
although making some of the highest-quality pianos in the
world, emphasizes consistency and reliability, as well as
richness of tone.
Figure 7.7 A restaurant complex with all four basic layout types
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shown with three different types of restaurant and the kitchen which serves them all. The
kitchen is arranged in a functional layout, the traditional service restaurant is arranged in
a fixed-position layout, the buffet restaurant is arranged in a cell-type layout, while in the
cafeteria restaurant, all customers take the same route when being served with their meal.
They may not take the opportunity to be served with every dish but they move through the
same sequence of processes.
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186
Flow of chocolate
In the famous Cadbury’s chocolate factory at Bourneville,
on the outskirts of Birmingham, UK, chocolate products
are manufactured to a high degree of consistency
and efficiency. Production processes are based on a
product layout. This has allowed Cadbury’s engineers
to develop and procure machinery to meet the technical
and capacity requirements of each stage of the process.
Consider, for example, the production of Cadbury’s Dairy
Milk bars. First, the standard liquid chocolate is prepared
from cocoa beans, fresh milk and sugar using specialized
equipment, connected together with pipes and conveyors.
These processes operate continuously, day and night,
to ensure consistency of both the chocolate itself and
the rate of output. Next, the liquid is pumped through
heated pipework to the moulding department, where
it is automatically dispensed into a moving line of
precision-made plastic moulds which form the chocolate
bars and vibrate them to remove any trapped air bubbles.
The moulds are continuously conveyed into a large
refrigerator, allowing sufficient time for the chocolate to
harden. The next stage inverts the moulds and shakes
out the moulded bars. These then pass directly to a set
of highly automated wrapping and packing machines,
from where they go to the warehouse.
Flow of customers
Cadbury also has a large visitor centre called ‘Cadbury
World’ alongside the factory (linked to a viewing area
Short case
Chocolate and customers flow
thr
ough Cadbury’s
3
which looks onto the packaging area described above).
Cadbury World is a permanent exhibition devoted entirely
to chocolate and the part Cadbury has played in its
fascinating history. Because most of the attractions
are indoors, with limited circulation space, the main
exhibition and demonstration areas are designed to allow
a smooth flow of customers, where possible avoiding
bottlenecks and delays. The design is also a ‘product’
layout with a single route for all customers. Entry to the
Exhibition Area is by timed ticket, to ensure a constant
flow of input customers, who are free to walk around
at their preferred speed, but are constrained to keep
to the single track through the sequence of displays.
On leaving this section, they are directed upstairs to
the Chocolate Packaging Plant, where a guide escorts
standard-sized batches of customers to the appropriate
positions where they can see the packing processes
and a video presentation. The groups are then led down
to and around the Demonstration Area, where skilled
employees demonstrate small-scale production of
handmade chocolates. Finally, visitors are free to roam
unaccompanied through a long, winding path of the
remaining exhibits.
Cadbury has chosen to use the product layout design
for both the production of chocolates and the processing
of its visitors. In both cases, volumes are large and the
variety offered is limited. Sufficient demand exists for
each standard ‘product’, and the operations objective
is to achieve consistent high quality at low cost. Neither
operation has much volume flexibility, and both are
expensive to change.
Customers being processed
Chocolate being processed
Source: Cadbury World
Source: Cadbury World
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Chapter 7 Layout and flow
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What type of layout should an operation choose?
The importance of flow to an operation will depend on its volume and variety characteristics.
When volume is very low and variety is relatively high, ‘flow’ is not a major issue. For example,
in telecommunications satellite manufacture, a fixed-position layout is likely to be appropriate
because each product is different and because products ‘flow’ through the operation very
infrequently, so it is just not worth arranging facilities to minimize the flow of parts through
the operation. With higher volume and lower variety, flow becomes an issue. If the variety is
still high, however, an entirely flow-dominated arrangement is difficult because there will
be different flow patterns. For example, the library in Figure 7.4 will arrange its different
categories of books and its other services partly to minimize the average distance its customers
have to ‘flow’ through the operation. But, because its customers’ needs vary, it will arrange
its layout to satisfy the majority of its customers (but perhaps inconvenience a minority).
When the variety of products or services reduces to the point where a distinct ‘category’ with
similar requirements becomes evident but variety is still not small, cell layout could become
appropriate, as in the sports goods cell in Figure 7.5. When variety is relatively small and
volume is high, flow can become regularized and a product-based layout is likely to be appro-
priate, as in an assembly plant (see Figure 7.8).
Selecting a layout type
The volume–variety characteristics of the operation will, to a large extent, narrow the choice
down to one or two layout options. The decision as to which layout type to adopt will be
influenced by an understanding of their relative advantages and disadvantages. Table 7.2
shows some of the more significant advantages and disadvantages associated with each layout
Figure 7.8 The volume–variety process position of an operation influences its layout and,
in turn, the flow of transformed resources
The volume and variety
characteristics of an
operation will influence
its layout
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type. It should be stressed, however, that the type of operation will influence their relative
importance. For example, a high-volume television manufacturer may find the low-cost
characteristics of a product layout attractive, but an amusement theme park may adopt the
same layout type primarily because of the way it ‘controls’ customer flow.
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188
Table 7.2 The advantages and disadvantages of the basic layout types
Fixed-position
Functional
Cell
Product
Advantages
Very high mix and product flexibility
Product or customer not moved or
disturbed
High variety of tasks for staff
High mix and product flexibility
Relatively robust in the case of
disruptions
Relatively easy supervision of
equipment or plant
Can give a good compromise
between cost and flexibility for
relatively high-variety operations
Fast throughput
Group work can result in good
motivation
Low unit costs for high volume
Gives opportunities for specialization
of equipment
Materials or customer movement is
convenient
Disadvantages
Very high unit costs
Scheduling of space and activities
can be difficult
Can mean much movement of plant
and staff
Low facilities utilization
Can have very high work-in-progress
or customer queuing
Complex flow can be difficult to
control
Can be costly to rearrange existing
layout
Can need more plant and equipment
Can give lower plant utilization
Can have low mix flexibility
Not very robust if there is disruption
Work can be very repetitive
Figure 7.9 (a) The basic layout types have different fixed- and variable-cost characteristics which seem to
determine which one to use. (b) In practice the uncertainty about the exact fixed and variable costs of each layout
means the decision can rarely be made on cost alone
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189
Of all the characteristics of the various layout types, perhaps the most generally signific-
ant are the unit cost implications of layout choice. This is best understood by distinguishing
between the fixed- and variable-cost elements of adopting each layout type. For any par-
ticular product or service, the fixed costs of physically constructing a fixed-position layout
are relatively small compared with any other way of producing the same product or service.
However, the variable costs of producing each individual product or service are relatively
high compared to the alternative layout types. Fixed costs then tend to increase as one moves
from fixed-position, through functional and cell, to product layout. Variable costs per product
or service tend to decrease, however. The total costs for each layout type will depend on
the volume of products or services produced and are shown in Figure 7.9(a). This seems to
show that for any volume there is a lowest-cost basic layout. However, in practice, the cost
analysis of layout selection is rarely as clear as this. The exact cost of operating the layout
is difficult to forecast and will probably depend on many often-difficult-to-predict factors.
Rather than use lines to represent the cost of layout as volume increases, broad bands, within
which the real cost is likely to lie, are probably more appropriate (see Fig. 7.9(b)). The dis-
crimination between the different layout types is now far less clear. There are ranges of
volume for which any of two or three layout types might provide the lowest operating cost.
The less certainty there is over the costs, the broader the cost ‘bands’ will be, and the less clear
the choice will be. The probable costs of adopting a particular layout need to be set in the
broader context of advantages and disadvantages in Table 7.2.
Detailed design of the layout
Once the basic layout type has been decided, the next step is to decide the detailed design of
the layout. Detailed design is the act of operationalizing the broad principles which were
implicit in the choice of the basic layout type.
Detailed design in fixed-position layout
In fixed-position arrangements the location of resources will be determined, not on the
basis of the flow of transformed resources, but on the convenience of transforming resources
themselves. The objective of the detailed design of fixed-position layouts is to achieve a layout
for the operation which allows all the transforming resources to maximize their contribution
to the transformation process by allowing them to provide an effective ‘service’ to the trans-
formed resources. The detailed layout of some fixed-position layouts, such as building
sites, can become very complicated, especially if the planned schedule of activities is changed
frequently. Imagine the chaos on a construction site if heavy trucks continually (and noisily)
drove past the site office, delivery trucks for one contractor had to cross other contractors’
areas to get to where they were storing their own materials, and the staff who spent most time
at the building itself were located furthest away from it. Although there are techniques which
help to locate resources on fixed-position layouts, they are not widely used.
Detailed design in functional layout
The detailed design of functional layouts is complex, as is flow in this type of layout. Chief
among the factors which lead to this complexity is the very large number of different options.
For example, in the very simplest case of just two work centres, there are only two ways of
arranging these relative to each other. But there are six ways of arranging three centres and
120 ways of arranging five centres. This relationship is a factorial one. For N centres there are
factorial N (N!) different ways of arranging the centres, where:
N! = N × (N − 1) × (N − 2) × ...× (1)
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So for a relatively simple functional layout with, say, 20 work centres, there are 20! = 2.433 × 10
18
ways of arranging the operation. This combinatorial complexity of functional layouts makes
optimal solutions difficult to achieve in practice. Most functional layouts are designed by a
combination of intuition, common sense and systematic trial and error.
The information for functional layouts
Before starting the process of detailed design in functional layouts there are some essential
pieces of information which the designer needs:
● The area required by each work centre;
● The constraints on the shape of the area allocated to each work centre;
● The degree and direction of flow between each work centre (for example, number of
journeys, number of loads or cost of flow per distance travelled);
● The desirability of work centres being close together or close to some fixed point in the
layout.
The degree and direction of flow are usually shown on a flow record chart like that
shown in Figure 7.10(a) which records in this case the number of loads transported between
departments. This information could be gathered from routeing information, or where flow
is more random, as in a library for example, the information could be collected by observing
Combinatorial complexity
Flow record chart
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190
Figure 7.10 Collecting information in functional layout
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the routes taken by customers over a typical period of time. If the direction of the flow
between work centres makes little difference to the layout, the information can be collapsed
as shown in Figure 7.10(b), an alternative form of which is shown in Figure 7.10(c). There may
be significant differences in the costs of moving materials or customers between different
work centres. For example, in Figure 7.10(d) the unit cost of transporting a load between the
five work centres is shown. Combining the unit cost and flow data gives the cost-per-distance-
travelled data shown in Figure 7.10(e). This has been collapsed as before into Figure 7.10(f).
Minimizing distance travelled
In most examples of functional layout, the prime objective is to minimize the costs to the
operation which are associated with flow through the operation. This usually means minimiz-
ing the total distance travelled in the operation. For example, Figure 7.11(a) shows a simple
six-centre functional layout with the total number of journeys between centres each day. The
effectiveness of the layout, at this simple level, can be calculated from:
Effectiveness of layout =∑F
ij
D
ij
for all i ≠ j
where
F
ij
= the flow in loads or journeys per period of time from work centre i to work centre j
D
ij
= the distance between work centre i and work centre j.
The lower the effectiveness score, the better the layout. In this example the total of the
number of journeys multiplied by the distance for each pair of departments where there is
some flow is 4,450 metres. This measure will indicate whether changes to the layout improve
its effectiveness (at least in the narrow terms defined here). For example, if centres C and E
are exchanged as in Figure 7.11(b) the effectiveness measure becomes 3,750, showing that the
new layout now has reduced the total distance travelled in the operation. These calculations
assume that all journeys are the same in that their cost to the operation is the same. In some
operations this is not so, however. For example, in the hospital some journeys involving healthy
staff and relatively fit patients would have little importance compared with other journeys
where very sick patients need to be moved from the operating theatres to intensive-care wards.
In these cases a cost (or difficulty) element is included in the measure of layout effectiveness:
Effectiveness of layout =∑F
ij
D
ij
C
ij
for all i ≠ j
where
C
ij
is the cost per distance travelled of making a journey between departments i and j.
Chapter 7 Layout and flow
191
Figure 7.11 (a) and (b) The objective of most functional layouts is to minimize the cost associated with movement
in the operation, sometimes simplified to minimizing the total distance travelled
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The general functional layout design method
The general approach to determining the location of work centres in a functional layout is as
follows:
Step 1 Collect information relating to the work centres and the flow between them.
Step 2 Draw up a schematic layout showing the work centres and the flow between them,
putting the work centres with the greatest flow closest to each other.
Step 3 Adjust the schematic layout to take into account the constraints of the area into which
the layout must fit.
Step 4 Draw the layout showing the actual work centre areas and distances which materials
or customers must travel. Calculate the effectiveness measure of the layout either as
total distance travelled or as the cost of movement.
Step 5 Check to see if exchanging any two work centres will reduce the total distance travelled
or the cost of movement. If so, make the exchange and return to step 4. If not, make
this the final layout.
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Rotterdam Educational Group (REG) is a company which commissions, designs and manu-
factures education packs for distance-learning courses and training. It has leased a new
building with an area of 1,800 square metres, into which it needs to fit 11 ‘departments’.
Prior to moving into the new building it has conducted an exercise to find the average
number of trips taken by its staff between the 11 departments. Although some trips are
a little more significant than others (because of the loads carried by staff) it has been
decided that all trips will be treated as being of equal value.
Step 1 – Collect information
The areas required by each department together with the average daily number of trips
between departments are shown in the flow chart in Figure 7.12. In this example the
direction of flow is not relevant and very low flow rates (less than five trips per day) have
not been included.
Worked example
Figure 7.12 Flow information for Rotterdam Educational Group
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193
Step 2 – Draw schematic layout
Figure 7.13(a) shows a schematic arrangement of departments. The thickest lines represent
high flow rates between 70 and 120 trips per day; the medium lines are used for flow rates
between 20 and 69 trips per day; and the thinnest lines are for flow rates between 5 and
19 trips per day. The objective here is to arrange the work centres so that those with the
thick lines are closest together. The higher the flow rate, the shorter the line should be.
Step 3 – Adjust the schematic layout
If departments were arranged exactly as shown in Figure 7.13(a), the building which housed
them would be of an irregular, and therefore high-cost, shape. The layout needs adjust-
ing to take into account the shape of the building. Figure 7.13(b) shows the departments
arranged in a more ordered fashion which corresponds to the dimensions of the building.
Step 4 – Draw the layout
Figure 7.14 shows the departments arranged with the actual dimensions of the building
and occupying areas which approximate to their required areas. Although the distances
between the centroids of departments have changed from Figure 7.14 to accommodate their
physical shape, their relative positions are the same. It is at this stage that a quantitative
expression of the cost of movement associated with this relative layout can be calculated.
Step 5 – Check by exchanging
The layout in Figure 7.14 seems to be reasonably effective but it is usually worthwhile to
check for improvement by exchanging pairs of departments to see if any reduction in
total flow can be obtained. For example, departments H and J might be exchanged, and
the total distance travelled calculated again to see if any reduction has been achieved.
Figure 7.13 (a) Schematic layout placing centres with high traffic levels close to each
other, (b) schematic layout adjusted to fit building geometry
Figure 7.14 Final layout of building
➔
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