Manufacturing Cells

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Adam Hayes
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Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

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Updated August 31, 2022
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Khadija Khartit
Khadija Khartit
Reviewed by Khadija Khartit
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Khadija Khartit is a strategy, investment, and funding expert, and an educator of fintech and strategic finance in top universities. She has been an investor, entrepreneur, and advisor for more than 25 years. She is a FINRA Series 7, 63, and 66 license holder.
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Skylar Clarine
Skylar Clarine
Fact checked by Skylar Clarine
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Skylar Clarine is a fact-checker and expert in personal finance with a range of experience including veterinary technology and film studies.

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What Is a Manufacturing Cell?

Manufacturing cells are sets of machines that are grouped by the products or parts that they produce. This type of system is used in the cellular manufacturing concept and is distinct from the traditional functional manufacturing system, which groups all similar machines together.

Manufacturing cells are generally used to increase the efficiency of the flow of materials and to eliminate waste in the manufacturing process.

Key Takeaways

  • A manufacturing cell places key people, machines, and supplies in one strategic location.
  • Manufacturing cells can lead to a more efficient flow of materials, increased communication, and lower inventories.
  • While the capital costs of adding machines to separate cells can be high, the benefits are often worth it.
  • Manufacturing cells can eliminate overproduction waste, excess inventories, and over-processing inefficiencies.

Understanding Manufacturing Cells

A critical step in implementing a cellular manufacturing system is to develop manufacturing cells. It can prove challenging because, if the same machines are required in different cells, it may result in higher capital requirements. However, the benefits of manufacturing cells—such as higher productivity, better responsiveness to market conditions, and the ability to produce customized goods in small volumes—can more than offset the increased costs.

While manufacturing cells are often centered on keeping machines in close proximity, it doesn't end there. The cell can also include the strategic placement of key people, tools, and supplies. This allows for improved communication and for every worker to see what is happening at all times.

Implementing cellular manufacturing has proven itself as a way of reducing product costs while improving lead times and quality. Cells have prospered because they work, and they work in almost any type of manufacturing environment. One reason cells are successful is that they often eliminate many of the wastes inherent in a typical manufacturing operation.

Benefits of Manufacturing Cells

Overproduction is an example of a waste because more products are made than can be used. A manufacturing cell eliminates waste by making it easier to produce only what is needed. All operations are in close proximity, and the production process is simplified. In a cellular arrangement, one operator can complete multiple operations, which may improve the balance of work and simplify product flow.

Overproduction leads to excess inventory, which is the costliest of all manufacturing wastes. Manufacturing cells prevent excess inventory in a variety of ways. First, by balancing the work and instructing operators not to exceed what the next person can handle, the work-in-process inventory is reduced. By the nature of the cell layout, there's nowhere to put excess inventory. Manufacturing cells solve the vacant space paradox, which says the amount of vacant space is inversely proportional to the amount of time it is vacant.

Lastly, manufacturing cells help eliminate the waste associated with overprocessing by keeping processes in close proximity to each other and making only what can be used immediately. Unnecessary processes, such as packing and unpacking, are eliminated because handling is reduced, and that which remains poses little risk of damage. Parts in the cells are processed sooner, so any of the other product protection processes can also be eliminated. The close proximity of all the operations makes it easier to identify the processes that are not adding value to the product.