Different Process and Layout Designs - Essay Example

Different Process and Layout Designs Introduction The growing demands in the world markets and the development of new technology have made production an important component of corporate strategy. Therefore, the strategy for production is in parallel to the strategies of production technology, planning and control of production, plant layout and organisational strategies (Gudnason & Riis, 1984). Different nature of businesses requires different kinds of processes and layout strategies to efficiently meet their objectives. In a manufacturing plant the configuration may vary because of size of plant site, buildings, work areas etc whereas, in a service business layout may vary based on office layout, retailers outlet etc. Companies are pursuing efficient layout strategies to reduce surplus material management, to keep the costs low and to improve product flow through facility (Inman). Process design is important because the products have to be delivered in the best possible way (Waters & Waters, 1999). The aim of this report is to critically analyse how different types of processes and layout strategies contribute to organisational strategy. Description of different process types The processes can be categorised into two broad categories including manufacturing process types and service process types. There are further types of these processes which have been classified based on frequency with which the product changes (Waters & Waters, 1999). Manufacturing process types 1. Project process This type of process is suitable for the high work content, complex and large products. Time, quality and cost objectives are defined in the start and evaluated in the end because of the higher costs associated with such kind of processes. To accomplish the project, a variety of skills are coordinated and usually a fixed position layout is used. This process is usually used by large construction, shipbuilding and movie production companies. Given below is an example of project process, in which a fixed position layout is used to produce motorbikes. Source: Xenophyadesign 2. Jobbing process This process type is suitable for small quantities of products with high variety and low repetition. In this process, varieties of skills are required and both the fixed or process layout can be used depending on the decision of the jobbers. The craftsman producing a piece of furniture is an example of jobbing process because each time a different piece or dissimilar piece is manufactured from the same technology. Source: Farm4 3. Batch processes The process which involves higher volumes of products and lower variety as compared to jobbing process is known as batch process. Although specialised products can be made in this type of process however, demand is repetitive therefore, products are usually standardised. Batch processes usually have process or cellular layout and set-ups at each stage of production. The production process of Valotto Metalurgia, an automobile parts manufacturing company is an example of batch process. Source: Valottomet 4. Mass/Line processes Mass/Line processes are those in which higher volumes are produced as compared to batch processes. The standard and repetitive products are produced in this process with very low variety. The skills requirement for these kinds of processes is from low to narrow. Because of the fixed sequence of operations, both the cell or product layout is suitable however, set-ups are not necessary and they can be instantaneous ones. Production of robots by Toyota Company in the given diagram is an example of mass process, in which huge volumes of robots are produced with low variety. Source: My Technology Universe 5. Continuous process The continuous processes are used when extremely higher volumes are required and variety of products is low. In this process, few changeovers are required and starting and stopping the process is difficult and expensive. Such processes are highly capital intensive and technology based and the products are standardised and repetitive. Product layout strategy is used in such processes as products flow along conveyors and pipes. The production process for steel wire heat treatment is the example of a continuous process. Source: Made-in-China Website Service Process Types 1. Professional service In this type of process, the contact time with customer is significantly higher and process is highly customised or flexible to meet the needs of the customer. Most of the activities are front line activities and process focused and they are largely dominated by people which mean utilisation of equipment is small. The ratio of staff to customers is high and responsibility is delegated to staff to fulfil needs of customers. Consulting companies such as Knowledge Network Resource Consulting Incorporation are examples of this process design. Source: Knowledge Network Resource Consulting Incorporation 2. Service shop This type of process comes between professional and mass process. This type of process involves both the front and back office activity. More focus is given on the process and product and emphasis is on both the people and equipment utilisation. Bank is an example of a service shop, in which both the front and backend activities take place. Source: Department of Building and Housing, New Zealand 3. Mass service In this type of process, the contact time with the customer is low and equipment utilisation is dominant as compared to process focused. Unlike the previous two processes, in this type of process, the major activity occurs at the back end. Authority level of staff is low and strict guidelines are defined to ensure the compliance to defined procedures. Railway service is an example of mass service, in which large number of customers is served with less contact time. Source: Newshopper Description of different layouts There are different types of layout strategies in operations management. Layout strategy is important because the way the facility is designed directly affects the various aspects of operations of the company such as total distance and time taken by materials or information as they move through the processes, quality of product and service, throughput time and space requirement (Slack, Chambers & Johnston). Fixed position layout In this type of layout the resources are moved to the process area and the resources are transformed in fixed process area. In the construction sites and movie areas, the fixed position layout are followed (Chase, 2006). This layout type is associated with batch production or jobbing operations and its main advantage is product flexibility because the equipment used in fixed position layout is of general nature purpose and many products can be produced in parallel and simultaneously. However, based on the nature of product being manufactured and sheer size of the product, the fixed position layout cannot be used (Bennett). Production unit of Airbus has a fixed position layout, in which all transforming resources such as materials, machines, labour, supplies and equipment are brought to the production site. Example of Airbus Production Source: Kathi-Kutscheid’s Posterous Process oriented layout In the process oriented layout, the similar functions and processes are put together and the resources are passed to the relative function. This type of layout is also known as functional or job-shop layout, and this layout is used in hospitals and medical care centres (Chase, 2006). For example, in the hospital all maternity patients are handled in one section and the emergency cases in the other section. This layout is also common in the manufacturing companies such as assembly is done in one section and inspection is done in other. Gitman and McDaniel argue that this type of layout is suitable for the companies which manufacture large number of small products. An example of process layout is the layout of Delhaize de Leeuw supermarket in Ouderghem, Belgium. The supermarket has placed all similar products together such as frozen foods have been stored in freezers in one area and canned food has been placed on shelves in the area (Slack, Chambers & Johnston). CWI has adopted a process oriented layout by dividing different functions into manufacturing, injection, assembling and packaging. Source: CWI Cell layout Cellular layout or group technology layout is a hybrid of product and fixed position layout. Small work cells are created in this layout and many machines and workers are organised in small cells in a compact and sequential manner and all workers act as team members and work on a task from beginning to end. Dixon and Scott (1995) highlight that in the cellular layout strategy, the focus is on part or product families and it has some prerequisites. The prerequisites limit the use of cellular layout in most of the businesses. Cell layouts have been widely adopted in stitching business because in these businesses from gluing to finishing, all work is done by a small team or even an individual. Source: American Stitch Product oriented layout Like the functional layout, in this type of layout the similar products and services are put together and high volume and standardisation is followed to meet the stable demand patterns. This layout is very suitable for the companies where large quantities of products are manufactured in a line and ongoing basis. This layout is also known as flow-shop layout and this layout is being used by chemical plants, car washes and shoes manufacturers (Chase, 2006). Production of drinking bottles is an example of product oriented layout, in which similar products are produced in high volumes and high standardisation. Source: Tradeget Contribution to strategic objectives The process and layout strategies are being developed in parallel to other strategic objectives of the companies. Sakai and Amasaka (2008) highlight that because of the increasing competition the Japanese organisations are encouraging ‘global production’ to ensure uniform quality and production. They also highlight that in the current business environment, the new engineering and computer simulation concepts are not only focusing on product quality, but they also help to improve quality of business processes and management of the organisations. The different types of process and layout strategies help the companies to create an economic layout which meets the competitive requirements of the organisations. Production systems of companies differ greatly for example, Dell has a customer driven production system, which means that products are only prepared when the customer orders them (PaulKrieg, 2009). Because of different nature of businesses and operations of the company, organisations can select the most suitable process design and layout. The organisation level strategy of most of the companies in U.S. industries is to enhance quick delivery of increasing variety of products in small lots and to meet these challenges they are turning towards cellular manufacturing and just-in-time strategy (Dixon & Scott, 1995). The perfect fit of process design and layout strategy and the business objectives facilitate the company to achieve the set objectives. Significant work has been study to determine a process design or layout strategy that may meet the needs of all kinds of organisations. However, a general process and layout strategy cannot be used. Kendall (2003) has compared the open building strategy to conventional building approach and presented an open building approach which can be used for multi-buildings and for new buildings. The open building strategy approach is really helpful because it is equal to lean construction principles and improves the logistics reallocation, management of supply chain, and just-in-time services. As these components are the major components of the organisational strategies of companies therefore, the presented strategy is considered very useful to understand the importance of layout strategies to meet organisational strategic objectives. The idea is that companies can even modify the basic types of process design and layout strategies to meet the strategic needs and objectives of their businesses. The typical performance objectives that can be obtained through an efficient process design include quality, speed, dependability, flexibility and cost (Slack, Chambers & Johnston, 2010). Project process allows companies to handle complex and highly customised projects, which improve quality and help company to meet customised needs of customers and reduce less recycling and waste. Mass process and continuous process allow the production of huge volumes thereby, reduce processing cost. When a company adopts a particular process design, meeting customer demands in a timely manner also becomes possible as delays are reduced and increase speed and dependability of operations. Moreover, batch process allows companies to produce variety of products and improve their flexibility. The following table shows the different layout and product strategies of McDonalds and company came up with five innovation strategies. The example of McDonalds shows that only product innovation is not important to become an innovative company but companies can also become innovative by improving their operations management. Table I: Five Innovative Strategies of McDonalds Source: MUW EDU website The strategic plans of the companies are directly influenced by the process and layout strategies. Most of the times, companies have to change their layout and process strategies to focus on a new plan for example, a recent example of Tekfor Cologne company, which is producing automotive components in Germany. The recent plan of the company involves enlarging its ring rolling and wedge rolling simulation activities. This plan has been presented because organisation sees a great potential to reduce its costs by implementing this plan. To implement the strategy, company has adopted a virtual process layout in which it is using a latest simulation technology (Schuler & Wohlmuth, 2010). The example of Tekfor Company shows the way companies adopt and transform their existing layout and process strategies to achieve the strategic objectives of the company. A particular layout can be used based on various factors such as nature of business. Most of the times, organisations have options to choose any layout strategy. In such cases, companies prefer the strategies which may facilitate them to achieve their strategic objectives. Kannan and Palocsay (1999) highlight that the study of literature on cellular manufacturing gives evidence that shops having manufacturing cells layout have poor performance as compared to job shops however, cellular shops have the potential to create higher yield. The findings of their research study show that to perform at a comparable level with job shops, the cellular shops only require a marginally higher learning rate. Even at the local level companies are highly encouraging suitable process and layout strategies to meet their business objectives. Dunn and Savastano Orthodontics is a small local company operating in Florida and focuses on the business objective to offer best possible treatment in a fun, sensitive and patient-oriented environment. To achieve the mentioned business mission, the company has set an office layout which is beyond the typical physical characteristics and service attributed thereby, creating differentiation and enhancing customers’ value (Morse & Babcock, 2009). Another example is Little Enterprise which is a small semiconductor manufacturer located in New England. With the increasing demand of semi-conductor industry, the president of the company, Scott Little highlighted the concern to change the process through which company used to produce parts. Through a cellular manufacturing approach, company achieved its mission and boosted its profits and flexibility (Modern Machine Shop, 2001). Companies focusing on process designs and layout strategies need to understand that these strategies facilitate them to meet their business and organisational objectives. However, selection of the appropriate strategy and its effective implementation is really important. Conclusion Based on the above discussion, it can be concluded that different types of layout strategies and process designs have been introduced to meet the changing needs of businesses. Depending upon the nature of the product and the frequency with which the product changes, different process designs have been presented. There are limitations, drawbacks and advantages associated with each type of process design and layout strategy. However, the contribution of process and layout strategy to meet organisational strategies has been proved. Nowadays, companies are highly focusing on these aspects of operations management, as they directly contribute to profits and efficiency of the companies. Therefore, through critical analysis, it has found that process design and layout strategy plays a very important role to contribute to strategic objectives of organisations. References American Stitch, 2010. Fixed Position Layout. [Online] Available at: http://americanstitchs.com/ [Accessed 29 November 2010]. Bennett, D., n.d. Fixed Position Layout. [Online] Available at: http://www.blackwellreference.com/public/tocnode?id=g9780631233176_chunk_g978140511096910_ss11-1 [Accessed 17 November 2010]. Chase, 2006. Operations Management for Competitive Advantage. [e-book] Tata McGraw-Hill. Available at: Google Books http://books.google.com.pk/books?id=kNRkTmMCXDsC&dq=fixed+process+layout&source=gbs_navlinks_s [Accessed 16 November 2010]. CWI, 2010. About Us. 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