Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

4.4.5 Relationship between Facility Layout, Orientation of Product Structure, and (Order) Batch Size, and between Product Variety Concept, Production Environment, and Frequency of Order Repetition



In some cases, there is a relationship among characteristic features, which can even be a positive correlation. For example, the feature facility layout is — according to Figure 4.4.5.1 — closely related to other features.

Fig. 4.4.5.1        Links among facility layout, orientation of product structure, and (order) batch size.[note 410]

The figure shows that, in a first approximation, the different values of the features in the same columns appear together. For example:

  • Site production, job shop production, and single-item-oriented line production have a tendency to appear together with a convergent product structure and production or procurement of single items or small batches.
  • High-volume line production and continuous production tend to appear together with a combination of convergent product structure on upper levels and divergent product structure on lower levels, or a fully divergent product structure, and with large-batch production or procurement, or with production without lots ("lotless") or procurement without lots.

Both observations also hold in the reverse direction. This means that in all the following figures in Section 4.5, we can replace the feature facility layout with one of the two features orientation of product structure and (order) batch size. 

A further observation is that the product variety concept is — according to Figure 4.4.5.2 — closely related to other features:

Fig. 4.4.5.2        Links among the features product variety concept, production environment, and frequency of order repetition.

The figure shows that, in a first approximation, the different values of features in the same columns appear together. For example:

  • Product variety concept versus production environment: A product variety concept according to customer specification (such as the manufacturing of plant facilities) means that part of the customer order has to run through design prior to procurement or production. This is the exact meaning of engineer-to-order. Product families with many variants are generally produced using raw materials (make-to-order). The variants in a product family concept with a restricted number of variants are normally produced during assembly (assemble-to-order). Standard products are stocked at the level of end products (make-to-stock).
  • Product variety concept versus frequency of order repetition: Production / procurement without order repetition is generally typical for a product variety concept according to customer specification or for product families with multiple variants. Production / procurement with infrequent order repetition is found with product families. Production / procurement with frequent order repetition is the rule with individual or standard products and with a small number of variants.

On the basis of these observations, we can see that, in all following figures in Section 4.5, the feature product variety concept can be replaced with either of the two features production environment or frequency of production or procurement order repetition.

Continuation in next subsection (4.4.5b).




Course section 4.4: Subsections and their intended learning outcomes