Cellular Manufacturing (CM) is increasing in importance as a philosophy with broad applicability in manufacturing organisations. In the most recent years, CM has faced criticism by the academic community due to its inferior performance relative to functional layouts (FL). This controversy has led to a lack of consensus among researchers on the appropriate manufacturing environment for CM. Important operational and environmental characteristics that may influence the preference of one system over another include equipment set-up and product processing times, as well as their ratios. Few research efforts have studied the behaviour of CM systems as a function of these parameters. This paper adopts a set of theoretical analytical models to investigate the relative performance of a CM system when compared to an FL manufacturing system. A large domain of values for set-up time and its ratio to processing time per unit, helps identify a "performance mapping" that may be used as a decision making framework by manufacturing managers. The performance criteria incorporated in the study include flow time, work-in-process and utilisation. The study provides insights into the conditions under which CM or FL, or both systems are feasible and also when one strategy outperforms the other. A simple case study from a small manufacturing organisation helps to evaluate the practical dimensions of the models and study results.
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