This paper presents a methodology to help decide whether a process-oriented plant would become more
competitive by relocating its facilities in a low-cost country or by transforming it into an efficient plant by
means of the implementation of a cellular layout with production driven by demand, managed in accordance
with the principles of lean manufacturing. In this paper, our methodology is applied to an existing processoriented
production system A set of key magnitudes and cost data attributed to the production plant and the way
it is managed are calculated. These key magnitudes, related to production cycles and inventories, are easily
calculated by means of an Operation-Time diagram. Fourteen types of manufacturing and distribution costs are
considered including those costs due to the relocation strategy, which are mostly related to logistics. The paper
includes the necessary calculations to transform the original plant by implementing three U-shaped flexible cells
and to quantify the number of employees that are necessary, taking into account global takt time and cycle time
of individual processes. Key production magnitudes and production and distribution costs are then calculated
for the cellular implementation. Final conclusions show that an efficient implementation of cellular production
processes pursuant to the lean management principles (low resource consumption, elimination of activities that
do not contribute to value creation, maintenance, on-time deliveries, high quality…) is able to offset, at least in
the studied case, the improvement in costs attributed to relocation strategies in process-oriented plants managed
in a conventional style.
