System Design includes capacity planning, process selection, facility layout, design of work systems and location planning and analysis. Satisfying the customer begins with capacity planning and process selection. Flexibility, production time and cost are key considerations in the process design. Process selection and layout are closely related. Layout decisions involve the arrangement of the work place which affects the flow of work through a system and impacts productivity, cost and flexibility. Capacity location decisions influence operating costs and the ability to respond to customer demand. Location decisions also impact transportation costs, labor availability, material costs and access to markets. Work design focuses on the human element in the production systems. Increasingly, managers are realizing that workers are a valuable asset and can contribute greatly to the organization’s success. Strategic planning is beginning to incorporate employee participation to help improve production systems. Design decisions have strategic significance for business organizations. Many of these decisions are not made by the operations managers. Nonetheless, because of the important links between operations and strategic area, it is essential to the success of the organization to involve all of the functional areas of the organization in design decisions.