Product vs. Process Layouts


•A process layout is a functional grouping of machines. For example, a group of lathe machines are arranged in one area, drill machines in another area, grinding machines in another area and so on. Different job jumps from one area to another differently. Hence, the flow of jobs is difficult to perceive. This type of layout is suitable for a make-to-order or an assemble-to-order production environment, as in a job shop where customization is high, demand fluctuates, and volume of production low. Since a wide variety of products are produced, general purpose equipments and workers with varied skills are needed.

•A product layout arrangement of machines. Every job visits the machines in the same order. This type of layout is suitable for a make-to-stock or an assemble-to-stock production environment, as in a flow shop where products are standard, demand stable, and volume of production high. Since variety is low, special purpose equipments and workers with a limited skill are needed.
•Advantage
• A process layout provides flexibility
• A product layout provides efficiency.
•Inventory
• A product layout has a low work-in-process inventory and high finished goods inventory because production is initiated by demand forecast.
• On the other hand, a process layout has a high work-in-process inventory and low finished goods inventory.
•Material handling
• A product layout can use automatic guided vehicles which travels in a fixed path. But, variable path forklifts are suitable for a process layout.
•Scheduling/line balancing
• In case of a process layout, jobs arrive throughout the planning period. A process layout requires dynamic scheduling where a new scheduling decisions is made whenever a new job arrives.
• In case of a product layout, sequencing and timing of product flow are standard and set when the line is designed. With a change in demand, a product layout may need a new line balancing decision.

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