As competition has intensified, many American manufacturers have sought alternatives to rejuvenate their production systems. Cellular manufacturing systems have received considerable interest from both academics and practitioners. This research examines three major issues in cellular manufacturing that have not been adequately addressed: applicability, structural design, and operational design.

Applicability, in this study, is concerned with discerning the circumstances in which cellular manufacturing is the system of choice. The methodology employed is simulation and two experimental studies are conducted. The objective of Experiment I, a 2 x 3 x 3 factorial design, is to investigate the role of setup time and move time on system performance and to gain insight into why and how one layout could outperform another. The results of Experiment I suggest that move time is a significant factor for job shops and that workload variation needs to be reduced if the performance of cellular manufacturing is to be improved. Experiment II evaluates the impact of setup time reduction and operational standardization on the performance of cellular manufacturing. The results of Experiment II suggest that cellular manufacturing is preferred if the following conditions exist: (1) well balanced workload, (2) standardized products, (3) standardized operations, and (4) setup times independent from processing times.