Process Types and Facility Layouts

Process Types and Facility Layouts – CPIM Supply Chain Strategy Guide

Why Process Types and Facility Layouts Matter

Process types and facility layouts are foundational concepts in operations and supply chain management. They determine how materials, information, and people flow through a production or service environment. Choosing the right process type and aligning it with an appropriate facility layout directly affects throughput, cost, quality, flexibility, and customer responsiveness. In the CPIM exam, this topic bridges strategic decision-making with day-to-day operational efficiency, making it a high-value area for both conceptual and scenario-based questions.

What Are Process Types?

A process type describes how a production system is organized to convert inputs into outputs. The major process types, arranged roughly from high variety/low volume to low variety/high volume, are:

1. Project Process
- Unique, one-of-a-kind products (e.g., construction of a building, shipbuilding).
- Very high variety, very low volume (often a quantity of one).
- Resources are brought to the product rather than the product moving through resources.
- Scheduling is complex; tools like Critical Path Method (CPM) and PERT are used.

2. Job Shop (Jumbled Flow)
- Low volume, high variety; products are customized or made to order.
- Equipment is grouped by function (e.g., all drilling machines together, all welding stations together).
- Workflow is variable and follows different routings for each job.
- Requires skilled, flexible labor.
- High work-in-process (WIP) inventory and longer lead times.

3. Batch Process
- Moderate volume, moderate variety.
- Products move through the facility in batches or lots.
- Similar to a job shop but with more standardized routings and some repetition.
- Setup times between batches are significant and must be managed.
- Common in food processing, pharmaceuticals, and apparel.

4. Repetitive (Line) Process
- High volume, low variety; discrete products follow a fixed routing.
- Work stations are arranged in sequence; each station performs a specific task.
- Assembly lines are the classic example (e.g., automobile assembly).
- Line balancing is critical to minimize idle time.
- Lower unit costs due to economies of scale.

5. Continuous Process
- Very high volume, very low variety (often a single product).
- Product flows continuously through the process (e.g., oil refining, chemical production, paper mills).
- Capital-intensive with highly automated equipment.
- Shutdowns are extremely costly; reliability and preventive maintenance are paramount.
- Lowest per-unit cost among all process types.

The Product-Process Matrix

The product-process matrix (Hayes and Wheelwright) maps the relationship between product characteristics (volume and variety) and process types. The key insight is that organizations should align their process choice with their product strategy:
- High variety / low volume → Project or Job Shop
- Moderate variety / moderate volume → Batch
- Low variety / high volume → Repetitive Line
- Commodity / very high volume → Continuous Flow

Operating off the diagonal of the matrix (i.e., a mismatch between product and process) typically leads to inefficiency — either excessive cost or insufficient flexibility.

What Are Facility Layouts?

A facility layout is the physical arrangement of resources (machines, workstations, storage areas, offices) within a facility. The layout should support the chosen process type and optimize the flow of materials, minimize waste, and enhance productivity.

1. Fixed-Position Layout
- The product stays in one location; workers, materials, and equipment come to the product.
- Used for projects: large ships, aircraft, buildings.
- Scheduling and coordination of resources at the site are major challenges.

2. Process Layout (Functional Layout)
- Resources are grouped by function or type of operation.
- Supports job shop and batch environments.
- Offers high flexibility; can handle a wide variety of products.
- Disadvantages include longer material flow paths, higher WIP, and more complex scheduling.
- Layout optimization often uses techniques such as minimizing total distance traveled or using relationship charts (e.g., Muther's Systematic Layout Planning).

3. Product Layout (Line Layout)
- Resources are arranged in sequence according to the processing steps of the product.
- Supports repetitive and continuous processes.
- Advantages: high throughput, low unit cost, simplified scheduling and material handling.
- Disadvantages: inflexible to product changes, vulnerable to line stoppages (a breakdown at one station can halt the entire line), and requires significant line balancing effort.
- Line balancing aims to distribute work evenly across stations to maximize efficiency and minimize idle time. Key metrics include cycle time, takt time, and line efficiency.

4. Cellular Layout (Group Technology Layout)
- Machines are grouped into cells; each cell is dedicated to producing a family of similar parts.
- Combines benefits of process and product layouts: flexibility with efficiency.
- Reduces setup times, WIP, material handling, and lead times compared to a pure process layout.
- Closely associated with lean manufacturing principles.
- Parts are grouped using group technology — classification and coding systems that identify similarities in design and manufacturing requirements.

5. Hybrid Layouts
- Many real-world facilities use combinations of the above layouts.
- For example, a factory might use a cellular layout for component fabrication and a product layout for final assembly.

How Process Types and Layouts Work Together

The choice of process type drives the layout decision:

- Project → Fixed-Position Layout
- Job Shop → Process (Functional) Layout
- Batch → Process Layout or Cellular Layout
- Repetitive/Line → Product (Line) Layout
- Continuous → Product (Line) Layout

Strategic considerations include:
- Volume and variety: Higher volume and lower variety favor product layouts; higher variety favors process or cellular layouts.
- Flexibility vs. efficiency trade-off: Process layouts offer flexibility; product layouts offer efficiency.
- Capital investment: Continuous and line processes require higher capital; job shops require less specialized but more general-purpose equipment.
- Workforce skills: Job shops need highly skilled workers; line processes rely more on standardized, specialized tasks.
- WIP and lead time: Process layouts tend to have high WIP and long lead times; product and cellular layouts reduce both.

Key Metrics and Calculations

Line Balancing:
- Cycle time = Available production time per period / Desired output per period
- Theoretical minimum number of workstations = Sum of task times / Cycle time (rounded up)
- Line efficiency = (Sum of task times) / (Number of stations × Cycle time) × 100%
- Balance delay (idle time percentage) = 100% − Line efficiency

Takt Time:
- Takt time = Available production time / Customer demand rate
- Used to synchronize production pace with customer demand (a lean concept).

Exam Tips: Answering Questions on Process Types and Facility Layouts

1. Know the spectrum. Be able to place process types on the volume-variety continuum from project (low volume, high variety) to continuous (high volume, low variety). Many questions test whether you can match a described scenario to the correct process type.

2. Match process types to layouts. Expect questions that ask which facility layout is most appropriate for a given process type. Remember the standard pairings: project → fixed-position; job shop → process layout; repetitive → product layout; and cellular layout as a hybrid used in batch or lean environments.

3. Understand trade-offs. The exam frequently tests your understanding of the trade-offs between flexibility, cost, WIP, lead time, and capital investment. For instance: "A company wants to increase product variety. Which layout change would support this?" The answer would typically involve moving toward a process or cellular layout.

4. Be comfortable with line balancing calculations. Practice computing cycle time, minimum number of workstations, and line efficiency. These are common quantitative questions. Always round up the number of stations to a whole number.

5. Recognize the product-process matrix. If a question describes a company that is producing high-variety, low-volume products on a continuous flow line, recognize this as a mismatch (off the diagonal) and identify the resulting inefficiency.

6. Group technology and cellular manufacturing. Understand that cellular layouts group dissimilar machines to produce families of parts. Questions may describe a scenario where setup times are high and WIP is excessive in a job shop, and the answer involves transitioning to cellular manufacturing.

7. Watch for keywords. Exam questions use specific language:
- "Functional grouping" or "departments by skill" → Process layout
- "Sequential stations" or "assembly line" → Product layout
- "Product stays in place" → Fixed-position layout
- "Part families" or "work cells" → Cellular layout

8. Think about strategic fit. Higher-level questions may ask about aligning process choice with competitive priorities (cost, quality, flexibility, delivery speed). Continuous and line processes support a cost leadership strategy; job shops and project processes support differentiation and customization strategies.

9. Consider the impact of change. Some questions test what happens when a company changes its product mix or volume. If volume increases significantly, moving from a batch process to a repetitive line process may be warranted. Understand the implications of such transitions on layout, workforce, and investment.

10. Eliminate confidently. When in doubt, use the volume-variety relationship as your anchor. Most incorrect answer choices will feature a clear mismatch between the described volume/variety situation and the suggested process type or layout. Eliminate those first, and you will often arrive at the correct answer.

Summary

Process types and facility layouts are tightly linked strategic decisions that shape a company's operational capabilities. For the CPIM exam, master the five process types (project, job shop, batch, repetitive, continuous), the four main layout types (fixed-position, process, product, cellular), and their interrelationships. Practice line balancing problems, understand the product-process matrix, and always think in terms of trade-offs between flexibility, efficiency, cost, and lead time. This integrated understanding will equip you to handle both conceptual and quantitative questions with confidence.