Plant layout : Definition,Objectives,Types,Case Studies,Factors

When we talk about running any manufacturing company there are a lot of factors to consider. As Owner or Top management,  you’re probably looking for ways to increase your productivity or profitability. Did you know that a good planning of your Plant Layout can give you more utilisation of space and resources, overall increase your productivity and profit.

Table of content

  1. What is Plant Layout?
  2. Objective of Good plant layout.
  3. Types of Plant Layout.
  4. How can you determine the optimum Layout for your Factory?
  5. What is a Lean Layout ?
  6. Advantages of using Lean Plant Layout.
  7. Case Study of Leading Furniture Manufacturing Company.
  8. Step by Step Lean Plant Layout by Tetrahedron.

Let’s discuss what a Plant Layout is ?


What is Plant Layout?

Plant layout is simply a mechanism which involves knowledge of the physical arrangement of every component of the production Process for the facilities to additional space efficiency for manufacturing cost reduction to continuous and steady movement of the production cycle.

This arrangement includes the space needed for material movement, storage, indirect labour and all other supporting activities or services. 

Plant Layout is a master blueprint which provides for the most effective utilisation of machine, manpower, materials for coordinating all operations performed inside the factory to increase overall productivity.

Here are objectives of Plant Layout that we can achieve by using Effective Plant Layouting.

Objective of Good Plant Layout

  • Effective Utilisation of Cubic Area in the factory
  • Effective Utilisation of installed machinery and Manpower
  • Minimization of Material Handling
  • Elimination of Bottlenecks through the Line balancing
  • Elimination of physical efforts with Low Cost Automation
  • High turnover with reduction in Delivery Failure
  • WIP(Work in progress) reduction between processes
  • Natural light,Ventilation,Control of noise and vibrations  for better  Ergonomics and Energy Cost reduction
  • Sufficient work space for a better Work Environment
  • Aisle and Gangways planning for better Accessibility and Monitoring
  • Store designed  based on better Flow, Accessibility, Capacity of storage and Traceability of materials
  • Reduction in changeover time through SMED (Single Minute Exchange of Die)
  • Dust control based on different types of Clean rooms/ ISO norms
  • Distance travel reduction of Material and Manpower etc
  • Reduction in Labour cost
  • Reduction in manufacturing time 
  • Increased flexibility
  • Future Expansion

Types of Plant Layout

Plant Layout is the arrangement of machines, equipment and other physical facilities in a planned manner. We design Plant Layout according to many factors like- Machinery , Product , material etc. On the basis of arrangement of the factors we have following 4 types of Plant Layout-

1) Product or Line  Layout

2) Process or Functional Layout

3) Fixed or Position Layout

4) Combination Layout

Product or Line Layout

If all the machines are arranged in a line sequence according to the sequence of operations of the products then it is known as Product or Line Layout. In this arrangement each following machine or section is arranged to perform the next operation that is performed by its preceding machine or section, i.e. raw material starts from one end of production lines and moves from one machine to next with a storage and material handling and  minimum work in process in a  sequential path.

This type of layout is suitable for mass production and for the  products having steady demand.This arrangement is also good for the continuous production system where the products have small parts that are highly standardised and interchangeable.


  • Low material handling cost
  • Less WIP (Work in progress)
  • Better utilisation of Machine and Manpower
  • Lesser time in Production
  • Less space requirements
  • Minimum possible cost of manufacturing


  • No flexibility
  • Breakdown of any machine in the line may shut down the whole production line
  • Difficulty in increase the production beyond the capacities of the production lines
  • If the output rate of one machine is slower than the other machine,over all production rate  decreases

Process or Functional Layout

In Process or Functional Layout all the similar machines are positioned together so that all the similar operations are performed at the same place. Machines are arranged according to the nature or type of the operations or their functions. For all the different types of functions separate machines are available i.e. For carrying out tapping work, all the tapping machines are grouped together and  for carrying out drilling work all the  drilling machines are arranged together.

This type of layout is useful where low volume of production is needed.It is normally preferred for the industries involved in batch production, manufacturing and maintenance activities of non- repetitive type.


  • In this type of layout there is no need for layout change  for different types of products
  • Breakdown of any  machine can be easily handled by transferring work to another machine
  • Wide flexibility exists regarding allotment of work to workers and equipment
  • There is a better utilisation of all the machines
  • There is an improved product quality because of separate supervisors and workers for all types of machines
  • Breakdown of any machine does not affect the production of other machines
  • Load distribution is easily controlled


  • High cost of material handling
  • Large space required
  • High investment required for inventory
  • High cost of  supervision 
  • Production time is longer
  • Bottlenecks occur due to more work is in queue and waiting for further operation
  • More floor area is required
  • Scheduling is tedious because work does not flow through definite lines

Fixed or Position Layout

In Fixed or Position type of layout the major part of a material remains at a fixed position and all accessories, material, required tools ,machinery and other supporting equipment are brought to this location and this layout is also known as project layout.

This layout is good for extremely large items manufactured in very small quantities and  highly preferable when the cost of moving a major piece of material is high.This layout is used in the manufacturing factory of boilers, hydraulic and steam turbines etc.


  • Less material and workers movement
  • Less Capital investment 
  • Highly flexible for varieties of products 
  • Ensures Continuity 
  • Less production cost


  • Complicated fixtures 
  • Required highly skilled manpower 
  • Movement of machines is time consuming
  • Machines are not fully Utilised
  • It is limited to large items only

Combination Layout

Combination Layout is also known as group layout.In this layout we use a combination of all above layouts. Every layout has its advantages and disadvantages therefore industries  prefer to use a combination of layouts. These days most of the manufacturing industries have adopted this kind of layout.

In this type of layout we connect all the good features of all the types of layout to obtain a compromise solution which will be more economical and flexible.


  • Reduction in cost of material handling and machine set-up time 
  • Elimination of excess work-in-process inventory 
  • Simple production planning functions 
  • Smooth flow of work


  • Change of the existing layout is costly and time consuming
  • Including new components requires thorough analysis
  • Complex to use 

Here I discuss types of Plant Layout and their advantages & disadvantages after reading that you can be confused to choose the perfect layout  for your Plant so, let’s discuss the factors you need to keep in mind when choosing layout for your plant.

How can you determine the optimum Layout for your Factory?

Once a Plant layout is frozen it’s almost impossible or very cost-intensive to change the layout especially after the civil works are completed and it is a critical investment for any manufacturing company.

Do you know how much time your employees waste in moving for material, inventory and in searching for tools? How often does your machine break down and are workers satisfied with the current workflow?

So, let’s discuss the factors that you need to consider before making a decision about which type of Plant Layout is best for your company?

Factory building structure

The size and nature of the building determines available floor space and cubic area and according to availability of area we can decide a particular type of Layout.

Nature of product

The nature of product that will be manufactured has a significant role to decide a Plant Layout type of any factory. For small and light products that can move from one machine to another with minimum effort and time we can select Process or Functional Layout and for large products we can choose a fixed layout and if the production is in sequence we can use Line Layout.

Nature of material

Nature and state of material, Durability, Heat and cold resistance etc are many factors which we need to keep in mind when we select type of Plant Layout because Dimensional tolerances can be inconsistent, Cracking is possible and some materials  environment so Processing can be challenging.

Production volume

Production volume is also a big factor to choose the type of Plant Layout. If a Factory is manufacturing the products on a large scale then Line Layout can be the best option and if we have different products then we can go with Process Layout.


The requirements of each machinery are quite different in terms of their space, speed, maintenance and repair and material handling process so these factors should be given proper consideration while choosing out a particular type of layout. If we arrange machines according to our need then we can get adequate space between machines and movement of inventory, people become easy.

Factory Location

Factory location also affects our Plant Layout decision.Climate, sun light, noise, ventilation etc are factors to be considered for adequate safety arrangements.

The efficiency of any production depends on how well the various machinery, tools, equipment and other supportive production facilities and employee’s amenities are located in a plant.Only an efficient Lean Plant Layout can ensure the smooth and rapid flow of material from the raw material stage to the end product stage.

Everything can be improved let’s talk about Lean Layouting.

What is a Lean Layout ?

Lean Layout is the ideas and techniques for total elimination of waste. The goal of Lean Layout is to increase efficiency, productivity and flexibility in the production process for full utilisation of Cubic space, Machinery, Manpower to increase Productivity and Profit with Zero Waste.Waste means Activities for which customers won’t pay.

It is very Important to understand the genesis of waste.There are 3 types of wasteful actions that negatively impact on Productivity.

1) Muri

2) Mura

3) Muda

In Lean Layouting we work for elimination of Waste.There are 8 types of Wastes of MUDA (Muda is a Japanese word meaning wastefulness and it is a key concept in lean process thinking work on the concept of Toyota Production System) in Lean Manufacturing that can be memorised through the acronym TIMWOODS. It stands for- Transportation, Inventory, Motion, Waiting, Overproduction, Over processing, Defects and Skills.


Transportation is moving material and products from one position to another. In Transportation there is unnecessary movement which doesn’t add value to the product, the reason behind is poor route planning, unnecessarily complex flows of material, disorganised workplaces. In Lean Layouting we make a proper workflow for minimising unnecessary movements.


There are three types of Inventory- Raw material, Work-in-progress inventory and finished products.This includes the waste of storage, waste of capital tied up in unprocessed inventory, waste of containers used to hold inventory and the lighting of the storage space.In Lean Layouting we understand the need of raw material and make a proper plan for storage to minimise material handling cost.


Motion is an excess movement of People (Walking) which causes additional delays in production.In Lean Layouting we analyse workers and their operations to minimise the excess motion to reduce production time and delivery failure.


This type refers to the waste of time in waiting for the previous process to be done.In Lean Layouting we understand the bottleneck of the process and try to make a plan for a continuous process.


Overproduction occurs when we produce more than we need. It is extremely costly for a manufacturing company as it disrupts the flow of materials and affects the quality of the item and overall decreases productivity.In Lean Layouting we understand the need of material and try to decrease over production.

Over Processing 

Over Processing is an unnecessary process and steps that do not add value to the product and adding attributes to a product that are not necessary.In Lean Layouting we make a proper plan for all the production process to reduce WIP time and increase Productivity


Defects refer to a product deviating from the standard design and customer’s expectation.Defective products must be replaced but we have a heavy loss of manpower and material that we use to make it. In Lean Layouting we work to minimise the defects.


The waste of human potential comes under skill waste.In organisation we do not understand the expertise of an employee and only give orders to follow. In Lean Layouting we understand the expertise of employees and give work according to their skills and also we provide some training to increase their skills if needed.

In lean Layouting, waste is anything that adds costs or delays in production without adding value to the product. In Lean Layouting we identify these wastes and take corrective actions to eliminate them. Lean layout results in comforts, convenience, appearance, safety, and profits and a poor layout results in congestion, waste, frustration and inefficiency.Following are the some advantages of using Lean Layouting.

Advantages of using Lean Plant Layout

In Manufacturing Cost Reduction

  • Reduced consumption of power by Minimise downtime
  • Minimisation of scrap and defects
  • Cost reduction by material handling 
  • Cost reduction by maintenance
  • Time saving with SMED & increases availability of machines for the production
  • Effective utilisation of materials by using future forecasting
  • Fully utilisation of machinery 
  • Effective utilisation of Cubic space

In Labour Cost Reduction

  • Less labour required for material handling 
  • Reduce bottleneck and the over-burdens 
  • Reduction in waiting time of the WIP
  • By right utilisation of skills 

In Production Control

  • Increase productivity by reduce WIP time
  • Reduces the WIP space by Single Piece Flow
  • Design better storage points
  • Increased production rate by eliminate waste
  • Improved forecasting strategy
  • Increased production rate by eliminate bottleneck
  • Reduction in delivery failure
  • Suitable spaces are allocating to production centres
  • Flexibility to meet future technology change and production requirements 

In For Supervision

  • Better flow for supervision by making gangways
  • Reduction in time of rechecking
  • Reduction supervision by eliminate waste 

For Workers

  • Make material handling easy for workers
  • Reduction of manpower efforts by using machinery
  • Better safety and less chance of accidents
  • Improved productivity leading to higher wages
  • Working conditions are better ,safer and improved

Now we have discussed the objective, Types, factors affecting a plant layout. Let’s understand how tetrahedron approaches a Project with a Lean Layout  methodology while considering the topic discussed above.

Case Study of Leading Furniture Manufacturing Company

Layout problems are found in every industry with a variety of types.There are a number of solution techniques available to optimise plant layout design but Lean Layouting is a very effective idea and technique that gives unbelievable results. In Lean Layouting our approach is elimination of 8 types of wastes that we discussed above. For a manufacturing company waste can be anything which can’t add value to tha product. In this case study we try to know  about the case of Leading Furniture Manufacturing Company and see how Tetrahedron improves their layout by using Lean Layouting.

Pain Area of the Leading Furniture Manufacturing Company

The Leading Furniture Manufacturing Company wants Lean Layout for effective utilisation of resources and area for additional facilities in existing plant and wants to decrease distance travelled by material and manpower also wants better monitoring and  supervision of the process.

Existing furniture section area of the company was 32,600 sqft

Area required for the additional facility(5-year projection) was 16,350 sqft.

They required total area = Existing area + Area for new facilities 

Total area they required= 48,950 sqft

The Proposed area by us with the new facility was 41,000 sqft.

 Total area saved = 7,950 sqft

 Area/Space Optimization by Tetrahedron was 24.3% 

Existing furniture section area

Area required for additional facility

Total area required

Proposed area with additional facility

Area saved 

Area Optimization by Tetrahedron

32,600 sqft

16,350 sqft

48,950 sqft

41,000 sqft




Area optimization by Lean Layouting


And the company also wants to reduce distance travelled by material and manpower.Total distance travelled by material and manpower of the company was 4,775 m. We proposed a layout with material and manpower distance travelled reduction of 1,572 m

Total Distance Travelled by material & manpower  in existing layout

Total distance travelled by material & manpower  in Proposed layout

Reduction in distance travelled by material & manpower

Reduction Percentage

4,775 m

3,203 m

1,572 m


Reduction in distance travelled by material & manpower

This is custom heading element

Company is a furniture manufacturing company.They want to add some more facilities for which they supposed that they need 16,350 sq ft new area with existing area of 32,600 sqft .We helped them to optimise their area and proposed overall 41,000 sq ft area with new facilities and saved 7950 sqft area with 24.7% optimization of area.

Company also wants to reduce distance travelled by material & manpower. Total distance travelled by material & manpower in the existing layout was 4,775 m, Tetrahedron reduced distance travelled by 33%.

Following are the steps how Tetrahedron did this job-

1-Understanding clients’ needs 

It all starts with understanding clients’ needs. First we understand the Pain area and Objective and growth of clients then we discuss with management and make specific strategies with 5-Year Business Growth Projection.

In this case we received a clear request for area optimization and reduction in distance travelled by material & manpower.

We take 5-year projection growth data from client to understand their growth forecasting for making a lean layout which can be applicable for a minimum of 5 years. Data of 5-year projection growth of this company is given below.


Product family

5-year Projection Growth 


Product 1

20% Per year


Product 2

15% Per year


Product 3

20% Per year

5 year Business Growth Projection

The Objective and Scope of New layout was Designed and implementation of the flow focused and lean layout for Plant.We also focus on company products and demand calculation.For better understanding we provide some data of this company.


Product name


Yearly demand (Current)

Sum of Product category (Current demand)


5-year projected demand

Sum of Product category

Monthly demand (5-year projection) 

Demand for Door





Demand for Door






























Demand Calculation 


2-Data Collection Process 

Before making any plan we need some data and  information about the operation to be explored. We collect Data for Product analysis, Raw material analysis, Machine analysis, Process analysis to select the best strategy. Then we discuss it With management and share Best Practices of Other Industry and set  Criteria for Effective Layout.

In this case first we do Product analysis based on Quantity, Shape, Size and weight.For example-

Product Details  Product Dimension(mm)

Product Family Name

Product name




Max use=80%


Family 1

















Data Collection of Family 1 Components

Like this we take details of all the products of the three families.

Then we do Raw material analysis based on Quantity, Shape, Size, lead time and with 5 year projection data.

After Raw Material analysis we do Machine analysis based on Dimensions, Weight, Tools and CTM. Tetrahedron verified all Machine details/dimensions physically on site for every process. All the machines have been planned as per the process requirements using lean focused tools. Space for Tools have been planned along with the machines.

Then we do Process Analysis based on Flow, Cycle time, Manpower, CTQ/CTB. Process analysis has been done for the existing and proposed layout. Value stream mapping has been plotted for the products and with the use of Cycle time work balancing graphs have been developed. Manpower details have been taken into consideration for planning and manpower reduction was the focus for the entire plant. CTQ/CTB has been considered while designing the layout proposed to the team of the company. 

3-Flow Design

Now it’s time for flow design for smooth flow of actions. We make a layout in our static 3D layout, so it can be changed later.In this we will work on Manual Accessibility Path Design,Aisles and Gangways,Safety Equipment and Exits to Minimise Distance Travel by Material.

In this Case Tetrahedron does Aisle/Gangway design. All the aisles required for material and manpower movements have been mentioned and proposed in the layout.

After that we do Manual Accessibility path design and all accessibility has been considered while designing the proposed layout.

Tetrahedron also focuses on Safety Equipment and Exits. Based on    process flow and nature of material/product we have proposed the required exit locations and the material movements considering the safety related points. 

4-Stores Design

In Store design we make space for Store and Inventory. Store design done to ensure the Zero Delivery Failure and Zero Line Stop,reduce or optimise Inventory for reducing material handling cost, distance travelled by material.

In this case we do  Finished goods store design,Raw material store design,WIP Place/Line side Stores design.

Finished goods Racks and storage has been planned based on the product quantity, Size and stacking requirements.Raw material has been calculated based on customer demand and lead time. Racks have been planned for the storage system.WIP space and the provision has been planned as per the product requirement and process flow. We also provide a WIP calculation sheet.

5-Machine and Workstation Design

After store design we do machine and workstation design to ensure Zero Machine Stop due to Material Unavailability and reduce manual transfer and ensure quick maintenance by Machine Sequencing,Tool & Fixture Space Designing,Machine Accessibility and by Machine Input and Output Space Design.The designer will move around equipment, change its orientation, and find the best place for the physical pieces. 

In Machine sequencing,Machines have been planned based on process requirements and the sequences required.When we do machine sequencing we consider  details that have been based on discussion with the team of the company.

Also we work on Tool and fixture space designing,Machine accessibility for maintenance,Machine Input & Output space design based on the requirements of the company regarding the space considerations.

6-Facility Support Design

In Facility Support Design we work on Safety, Ergonomic, Security & Other Environmental Factor Design.We work on Industrial Safety, Fire Protection,Noise Control,Dust Control (If Applicable),Ventilation and Exhaust,Lighting (Day & Artificial),Industrial Sanitation & Plumbing and Security.We do Facility designed for Safety and Better Performance and Use  Natural Lights for energy saving.If needed then we also provide Ergonomic and Behavioural trainings. 

A good production support should ensure short moves and focus on reducing moving cost. It also includes interdepartmental movements and material handling equipment, flow pattern reduction of unnecessary handling.After machine and workstation designing we need to work on the support function.In this case we do 360 Coverage of all non production activities like Utilities & Support, Material Handling and Employee Facility Centres.

7-Validation, Iteration & Confirmation

This is the final stage we are ready to handover the design and with all the things in mind we are ready to make changes according to the client to ensure the Optimum Layout Efficiency. We  Iterate the Draft Layout For Improvement,take validation from management then Confirm & Handover. We handover 2D and 3D Design and Our team is ready for 3D (Live) simulation and we also provide Future state value stream map to the company.

Finally we handover the Lean Layout design to the client. After approval we  help in implementation and If the company demands a lean layout according to Vaastu then Tetrahedron also considers this factor and works accordingly.