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A Process-layout can simultaneously handle a wide variety of products or services.  This is the traditional way to support a product differentiation strategy. It is not efficient when making products with different requirements or when handling customers, patents or clients with different needs.

In other words, Process-oriented layout deals with low-volume, high-variety production in which like machines and equipment are grouped together. In this job-shop environment, each product or each small group of products undergoes a different sequence of operations. A product or small order is produced by moving it from one department to another in the sequence required for that product.

When designing a Process Layout, the most common strategy is to arrange departments or work centers so as to minimize the costs of materials handling. Here, departments with large flows of parts or people between them should be placed next to one another. Material handling departments during depend on the following:

• The number of loads or people to be moved between two departments during some period of time
• The distance-related costs of moving loads or people between departments. Cost is assumed to be a function of distance between departments.

The objective can be expressed as follows:

           Minimize cost =Σⁿ_i=1    Σⁿ_i=1   X_{i j}  C_{i j}

 Where n= total number of work centers or departments

             I,j= individual departments

         X_{i j}    = number of loads moved from department i to department j

         C_{i j}  = cost to move a load between departments i and departments j.

Process-oriented facilities try to minimize loads or trips, times distance-related cost. The term C_{i j}combines distance and other costs into one factor.