Operations Management: Sustainability and Supply Chain Management, Twelfth Edition

The Strategic Importance of Layout Decisions

Layout is one of the key decisions that determines the long-run efficiency of operations. Layout has strategic implications because it establishes an organization’s competitive priorities in regard to capacity, processes, flexibility, and cost, as well as quality of work life, customer contact, and image. An effective layout can help an organization achieve a strategy that supports differentiation, low cost, or response. Benetton, for example, supports a differentiation strategy by heavy investment in warehouse layouts that contribute to fast, accurate sorting and shipping to its 5,000 outlets. Walmart store layouts support a strategy of low cost, as do its warehouse layouts. Hallmark’s office layouts, ...