The arrangement of machines such that the machines and equipment are grouped together by the function they perform
Process production deals with high-variety and low-volume production
Each good has a sequence of production and the steps involved are intermittent, moving from one department to another
Service businesses such as banks and insurance companies utlise process layout to accommodate the handling of customers with different needs
E.g. hospitals with different wards dedicated to different types of medical care such as maternity ward or intensive care unit