Many traditional manufacturing companies lay out their shop floor in what is called a "Functional Layout." This type of layout has become common practice since the introduction of mass production. All machines with a similar function are grouped together in one area and the product is moved from one operation to the next.

Items have to past from one process to the next in batches. This type of manufacturing layout has many disadvantages:

1. Poor quality because a batch of parts can be defective and not be discovered until it's moved to the next operation.

2. Large quantities of defective parts can end up being reworked. This increases lead time and production costs because of the extra workload and tying up valuable resources.

3. Machines can stand idle for long periods of time waiting for the next job to arrive.

4. Unbalanced workload at certain workstations creates bottlenecks.

5. Lack of cross training because operators are not usually encouraged to work outside of their own functional skills i.e. a welder does not operate a press brake. This limits the flexibly of any manufacturing or service company.

When implementing a lean process in the very first stages of developing a Value Stream Map the product flow or lack of it will become evident. When the Future State Map is completed it will identify the best flow for the product family plus, the what, where and how to create and position manufacturing cells. The transition from functional to cellular layout can occur in several phases depending upon the complexity of your process requirements.

The above diagrams show clearly the transition from a functional to cellular layout. 

In the "before" example the products moved from one process to the next available process. I sometimes refer to this type of layout as "spaghetti hell."

In the "after" example specific product families are flowing through a series of operations to reduce waste and improve quality.

Cell layouts can be in several configurations. It really depends upon your needs as to which type of cellular layout you will use.

The optimum shape for any cellular layout is a 'U". This allows one way in and out of the cell, the products to flow and its easier to balance the workload between the operators. Also, in a "U" shaped cell its easier to adjust the number of people (up or down) when demand changes.