Product Layout : Meaning, Types, Advantages, Disadvantages



Product is the most important factor for the existence of the business. Every organization works towards producing optimized products to attain the profit requirements of the organization. Every product should be specifically drawn out to understand its uses in the market. Products should be produced systematically through proper planning, organizing, etc. A layout is drawn out to ensure that all the tasks in the process of the product are arranged most appropriately.

What is Product Layout?

A product layout can be described as the process through which a product goes through before the final stage. In simple words it means, it is an assembly line through which the works are done in the production process. It clearly defines which work should be done first and which one should precede it. A well-defined product layout plays a vital role in the product management of the firm.

A product layout helps in maintaining the uniformity of products produced under a product line. There is minimal variation and maximum utilization of resources during the production process.

Let us understand the product layout with an example:

In the case of the automobile industry, there is a wide range of mechanisms included in producing an output. To produce the automobiles on time they should follow a sequential process. The product layout states what should be done first and last.

Let us say if making the body is the first step, the next step will be fixing the doors. So, in this case, the body is the input of the second step and in the following step, the output of the second step will be the input and the cycle going on. As a result, there will be time management of resources and time.

A product layout may be linear (activities are undertaken in a line) or U-shaped (activities are continuous in u shape). The type of layout is chosen based on the type of industry. To get efficient results the most appropriate layout should be chosen after analyzing the working of the firm.

Relevance Of Product Layout

Product layouts are used to simplify the complicated production process. We may wonder what the necessity of product layout in a production process is.

How can product layout help in the betterment of the production and optimize the process? Following are the features of the product layout:

  1. Understand the use of sophisticated machinery
  2. There is a huge capital investment required in product layout.
  3. The person in charge of each step-in layout should be skilled as machines do not completely perform the entire task.
  4. A product layout may be paced or non-paced i.e., in continuous rate or variable work pace.
  5. There is a huge involvement of types of machinery used in the production process

Types Of Product Layout

In manufacturing industries, there is a wide variety of product layouts. The linear layout and U- shaped layouts are further divided into the following:

1. Fixed Position Layout

  • It is mainly done when the equipment is heavy and impossible to move
  • Layouts are fixed in a single place
  • Large space is required to set up the layout
  • There are higher investment requirements for this type of layout
  • Industries like shipbuilding industries compulsorily work under this layout as there is a high amount of heavy equipment used.

2. Process Layout

  • Also referred to as functional layouts
  • Usually adopted by small industries
  • Similar operations are grouped and processed simultaneously
  • There is a higher level of flexibility as different activities are clubbed together
  • Some of the services are used under general equipment which helps in minimizing the cost.
  • Processes may not be continuous and each machine produces different products
  • Hospitals, banks, etc make use of this layout.

3. Product Layout

  • Sequential arrangements of various machines to produce a single product.
  • The layout is divided based on labor intensity or machinery intensity
  • The entire process is a straight line which may be paced or un-paced
  • For longer hours of working of machinery, a paced line is used and for variable workforce involvement un-paced line is used
  • In this case, there is a high level of utilization of labor as well as equipment
  • The automobile industry essentially follows this product layout as there are continuous working hours and there is a sequence that should be followed

4. Combination Layout

  • They are also known as the hybrid layout.
  • It is the combination of process, product, fixed position layout
  • This is mainly adopted in industries that produce versatile products
  • As in the case of the aviation industry, aircraft are manufactured in a single place although the place of the utilization of aircraft keeps on changing.

5. Cellular Layout

  • Machines are grouped according to their similarity in the production process.
  • Each group is called a cell
  •  Grouping is done using grouping technology where the machine’s design and process characteristics are identified
  • Each group is set up at one location.
  • Workers are trained well as they take up different positions in the production process
  • This is most useful for companies that produce a lot of small batches of output

The other layouts which are useful for in-service organizations are warehouse layouts (storage of products in case of lesser demand at a point of time) retail layouts (to understand the flow of customers and plan accordingly) and office layouts (paper transportation is optimized).

Advantages Of Product Layout

Product layout has played a vital role in optimizing production activities in large-scale manufacturing industries. The following are some other notable advantages of product layout:

  1. High optimization: All the resources of the organization are put to best use as there is a well-established plan on what to be used in what quantity at what time of the production.
  2. Automated work: The machines are automated and there is very less chance of errors and delays in the work to be performed.
  3. Less labor cost: As the majority of the work is done by the machines there is very less involvement of labor which in return helps in reducing the labor cost.
  4. Continuous hours of work: Industries require long hours of work to achieve the projected target in the market. Auto-generated machines work for long continuous hours without interruption which helps in producing more final outputs than labor-intensive production.
  5. Feasible for all situations: Product layout finds a solution in production irrespective of the industry.

Disadvantages Of Product Layout

Every attribute has pros and cons within them. Let us now discuss the cons of product layout:

  1. Technological abruption: As all activities are performed with the help of technical support a system failure or any abruption can cause complete failure in the layout setup
  2. Large investments: Machine installation is an expensive process. The cost and the space of the installation are an expense to the company.
  3. Expertise: Machine supervision can be done only by professionals. The remuneration will be much higher as compared to normal labors.
  4. Lack of employee support: As everything is auto-generated employees may not be given much importance which might affect the harmony of the firm.


Product layout is a systematic approach to the arranging of different mechanisms that are undertaken in the production process of a final output that is offered to the market to earn profits. The choice of the layout whether U-shaped or linear depends on the type of industry it works for.