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

6.2.2 Production Segmentation, or Manufacturing Segmentation — Lead Time Reduction Through Adaptation of the Production Infrastructure

Intended learning outcomes: Produce an overview on production or manufacturing segmentation.

Production segmentation, or manufacturing segmentation is the formation of organiza­tional units according to product families instead of job shop production.

Elimination of organizational boundaries interrupting flow allows autonomous responsi­bility for products to arise (similar to line production). Figure shows:

  • In the upper section, an example of a process layout: Operations of a similar nature or function are grouped together, based on process specialty (for example, saw, lathe, mill).
  • In the lower section, an example of a product layout: For each product (here with the exception of painting and galvanizing) there is a separate production line, or manufacturing group, but no longer any central job shop for each task.

There are cost factors that restrict the splitting of certain areas (such as galvanizing, painting, tempering), but an appropriate total layout and capacity reserves will ensure rapid throughput. Small- and medium-sized companies are often faced with the problem of special treatments for which they must rely on external refining and finishing companies. Because of the recent weight placed on setup time, however, ever more new facilities for such areas are being offered, such as paint shops that set up lacquer colors in a matter of minutes.

Fig.        Production or manufacturing segmentation. (Example taken from [Wild89]).

Applying production or manufacturing segmentation consistently leads to focused factories.

A focused factory is a plant established to focus on a limited set of products or product families, technologies, and markets, precisely defined by the company’s competitive strategy and economics (see [APIC16]).

Quiz Lead time Reduction - not yet available

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Exercise: Try to find a production segmentation that minimizes transport distances:

Continuation in next subsection (6.2.2b).

Course section 6.2: Subsections and their intended learning outcomes