The document discusses cellular manufacturing, which involves arranging equipment and workstations closely together to facilitate small lot, continuous flow production of a variety of low-demand products while maintaining productivity. Key aspects of cellular manufacturing include one-piece flow, multi-process handling within cells, near-zero transfer times between operations, modularity in process and product design, and arranging production flow within cells. The biggest challenges are dividing manufacturing systems into appropriate cells and addressing both technical issues related to equipment and "soft" issues related to management and corporate culture.