ACCTG 1 Lecture Notes - Lecture 16: Decision Rule, The Technique, Job Shop
Chapter 3 –
Process choice and layout decisions
in manufacturing and services
I. Manufacturing processes
Managers face a plethora of choices when deciding on a specific manufacturing
process. Here are a few general principles to keep in mind when selecting and
implementing a manufacturing process:
❖ Selecting an effective manufacturing process means much more than just
choosing the right equipment
❖ Different manufacturing processes have different strengths and weaknesses
❖ The manufacture of a particular item might require many different types of
manufacturing processes, spread over multiple sites and organizations in the
supply chain
Basic truth about manufacturing: no manufacturing process can be best at
everything. The choice of one manufacturing process over another will always bring
trade-offs. Flexible manufacturing systems = highly automated batch processes that
can reduce the cost of making groups of similar products.
The selection of a manufacturing system is a complex process. However, experienced
managers find that several questions crop up regularly in the selection process:
❖ What are the physical requirements of the company’s product?
❖ How similar are the products the company makes?
❖ What are the company’s production volumes?
❖ Where in the value chain does customization take place (if at all)?
1. Production lines and continuous flow manufacturing
Production line = a type of manufacturing process used to produce a narrow
range of standard items with identical or highly similar designs; has several
distinct characteristics:
❖ First, they follow a product-based layout = a type of layout where
resources are arranged sequentially according to the steps required to
make a product
❖ Second, items typically move throughout the production line at a
predetermined pace. The time between completions of successive units =
the cycle time of the line.
Production lines are ideally suited to the high-volume production of a single product
or of products characterized by similar design attributes. However, they have two
drawbacks:
❖ High volumes are required to justify the required investment in specialized
equipment and labour
❖ Lines are inflexible with regard to products that do not fit the design
characteristics of the production line
Continuous flow process = a type of manufacturing process that closely
resembles a production line process. The main difference is the form of the
product, which usually cannot be broken into discrete units; tends to be highly
capital intensive and very inflexible with respect to changes in output levels.
2. Job shops
In contrast, a job shop = a type of manufacturing process used to make a wide
variety of highly customized products in quantities as small as one;
characterized by general-purpose equipment and workers who are broadly skilled.
The product design is not standardized, and estimating the time, cost, and specific
production requirement for such products is not easy.
Job shops depend on highly flexible equipment and personnel to accomplish their
tasks. They typically follow a functional layout = a type of layout where resources
are physically grouped by function. Finally, job shops must be very flexible in their
planning.
3. Batch manufacturing
Batch manufacturing = a type of manufacturing process where items are moved
through the different manufacturing steps in groups, or “batches”. This process
fits somewhere between job shops and production lines in terms of production
volumes and flexibility. Batch manufacturing covers a wide range of environments
and is probably the most common type of manufacturing process.
4. Fixed-position layout
The final classic manufacturing process type is what is known as fixed-position
layout = a type of manufacturing process in which the position of the product is
fixed; materials, equipment and workers are transported to and from the product;
used when products are very bulky, massive, or heavy and movement is problematic.
5. Hybrid manufacturing processes
Not all manufacturing processes fall cleanly into the categories just listed. Hybrid
manufacturing = a general term referring to manufacturing processes that seek
to combine the characteristics, and hence the advantages, of more than one of
the classic processes.
Though there are literally hundreds of hybrid manufacturing processes out there, we
will illustrate the point by discussing two common types:
❖ Machining center = a type of manufacturing process that completes
several manufacturing steps without removing an item from the process
❖ Group technology = a type of manufacturing process that seeks to achieve
the efficiencies of a line process in a batch environment by dedicating
equipment and personnel to the manufacture of products with similar
manufacturing characteristics
