Merits and Demerits of Product and Process Layouts

Product Layout: Possible Advantages:
(1) Low total flow time of the product from the input stage to the output stage (i.e. higher rates of output) due to:
(a) Continuous flow without intermediate stoppages and storages;
(b) Repetitive, small, fragmented jobs learnt to perfection by the concerned workers; and
(c) Minimum set-up times of machines.

(2) Production planning and control is simple; less paper work
(3) Inspection required is less
(4) Lower degrees of skills in the manpower may suffice
(5) Raw materials and other inputs can be planned better, even to the extent of ‘Just in Time’, resulting in lower inventories.
(6) Lower work-in-process inventories needed.
(7) Lower material handling costs
(8) By ‘balancing’ the line, labor utilization can be high.

Product Layout: Possible Disadvantages:
(1) None or very little variety possible.
(2) Less flexibility to changes, particularly to other than minor changes.
(3) Entire line or significant portions of the line may come to a grinding halt if any equipment in the line breaks down, resulting in high stoppage costs.
(4) Larger maintenance crew needed.
(5) Very low job variety and therefore lower job satisfaction and higher boredom for the workers.
(6) More coordination required by supervisors.
(7) Duplication of machines and equipments may be necessary resulting in higher capital investment.
(8) More space may be required.

Process Layout: Possible Advantages:

(1) Very high degree of variety in products is possible.
(2) Flexibility and adaptability to changes is high.
(3) Machine breakdowns do not cause crippling production stoppages.
(4) Requires small maintenance crew.
(5) Good level of variety, skills requirement and therefore higher job satisfaction.
(6) Coordination and supervision is simpler as the processes are similar and the staff is skilled.

Process Layout: Possible Disadvantages:

(1) Higher flow times of products due to:
(a) Intermittent flows of the material; and (b) More numerous machine set-ups.
(2) Production planning and control is more complex; much paper work is necessary.
(3) Worker skills need to be high in order to complete all components of the job.
(4) Higher inventories of basic raw materials may be necessary due to much uncertainty of demand.
(5) Higher work-in-process inventories due to necessary intermediate storages, if the machine and labor utilization is to be at a satisfactory level and if the flow times of the products are to be at acceptable levels.
(6) More handling of materials.

Optimization in a Product/Line Layout:
The product or line layout is relatively easy to plan as the layout is according to the flow of the product as it takes shape from the raw material state to the finished goods state. The equipment and the work areas are laid out according to the sequence of the operations involved in converting the raw material to the finished product. The problem in the Line layout may not be that of how to sequence or relatively position the work areas, but rather to group the work elements in such a way that there is very little idle time at any of the grouped work centers. The problem in Line layout is therefore one of balancing the flow line of work (and also of the material) in such a way as to minimize the idle time at the different work centers (alternatively called ‘work stations’). This is technically termed as Assembly Line Balancing. This procedure automatically minimizes the relevant costs associated with Line layout.

Optimization in a Process Layout:

The problem in Process layout is one of arranging the different work areas in such a way that the inter-area material movement costs are kept to a minimum. Of course, one has to take into account, simultaneously, the total plant area available and any constraints on the individual area requirements or position requirements of the work centers. A mathematical treatment for this problem is available; but one ought to note that the mathematical optimizing models take into consideration only the cost of material handling. It is assumed, at best, that the other relevant costs of layout will also be reduced on account of this optimizing procedure. The material handling costs between two work areas (departments) is the product of the distance between the two work areas and the number of loads that are handled between the two departments during a unit period of time. The sum of these products, for all the combinations of departments, should be minimum for an optimal plant layout.

The starting point in such a mathematical optimization procedure for the Process layout is therefore, the gathering of the data on the number of loads per unit time moved between different combinations of the work areas. This data is called ‘load summary’ and is presented in matrix fashion.