Product layout is suitable for mass production where the volume of production is high and a variety of products is less, sometimes even a single standard product. The machines and testing facilities are arranged in the sequence of processes to be carried out and the tests at different stages.

The characteristics of the product layout are as follows:

Special purpose machines are installed.

1. Semi-skilled or less skilled people can run the machine, but highly skilled workers/professionals are required in order to upkeep these machines.
2. The initial investment is high, but the operating cost and subsequently the production cost is low.
3. If one machine stops functioning and as it is line layout, the entire production operation may come to a halt.
4. A conveyor system for material handling can be adopted for the smooth flow of material.
5. Work-in-progress inventory is less because the output of one machine immediately goes to the next machine if it is available to process.
6. All the machines are specialized for a particular design of the product. If a change in design is required, then it is difficult for the production system to respond to it. Therefore, flexibility in the system is not available.