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5.03 - The Cellular Factory

Many business situations can be improved by restructuring into cellular product units:-

Key Elements of a Product Unit and Cell

Key Elements of a Product Unit and Cell

Definition of a Business Unit

A business unit is a self contained business, containing one or more product units. It is self contained overall in terms of operations and development resource, reporting to a profit accountable General Manager.

Benefits of the Cellular Factory

The cellular factory provides ownership and direct flow of product and information:-

Ownership of

The product produced

The customers requirements

The plant to produce the product

The people to make the product

The tooling

The material planning and control system

The continuous improvement programme

The planned maintenance system

The cell material stock

The product quality


Short flow routes

A single product unit operations office

Elimination of job demarcation - flexibility

Training and skills development

Supplier development, in-house and external

Simplification of management and control

The cellular factory creates the environment for rapid change followed by continuous improvement in manufacturing performance.

Product Unit

A facility reporting to a Module Leader or Product Unit Manager which manufactures a single homogeneous group of products and which relies on support services from the Business Unit.


The smallest building block of a product Unit containing a natural group of machines and or people and skills. These can be manufacturing type cells (e.g. defined by group technology, from-to analysis, process flow analysis, and rank order cluster analysis) or office cells defined by process and information flow analysis.

Cell teams should be clear about which are the customer and suppler cells and what measures of performance (MOP’s see guides 5.02, 5.04 & 5.21) are required each week for both cases. Product Unit Managers should monitor relevant measures of performance.