The Product-Process Matrix
The relationship between the different types of processes and their respective volume requirements is often depicted on a product-process matrix shown in Exhibit 3.8 which is adapted from the widely cited Hayes and Wheelwright product-process matrix. In this matrix as volume increases and the product line narrows the horizontal dimension specialized equipment and standardized material flows (the vertical dimension) become economically feasible. This evolution in process structure is frequently related to the different stages of a product's life cycle introduction growth maturity and finally decline .
The industries listed within the matrix are presented as ideal types that have found their process niche. It certainly is possible for an industry member to choose another
position on the matrix however For example Volvo makes cars on movable pallets rather than on an assembly line Thus on the matrix it should be at the intersection of process stage II and product stage III Volvo's production rate is lower than that of its competitors because it is giving up the speed and efficiency of the line On the other hand the Volvo system has more flexibility and better quality control than the classic automobile production line Similar kinds of analysis can be carried out for other type of process-product options through the matrix.
In looking at Exhibit 3.8 it is interesting to note that companies that try to operate in either of the corners opposite the diagonal are doomed to failure Companies in the upper right-hand corner reflect those firms that are too also to react to changes in the marketplace As a result they try to compete in a market that requires high-volume. low-cost products
with a project type process that not only has very his variable costs but al a has very limited capacity As a consequence. these firms incur very high opportunity Cosh from lost sales because high prices encourage customers to ares their business elsewhere.
sales because high prices encourage customers to ares their business else where In the lower left-hand corner are companies that anticipated selling greater sourness of product than actually materialized As a result these firms have incurred very high out of pocket co ts in the form of very high fixed CO Sub which are associated it the capital intensive
processes that were installed.
made in the product design to the stages of the product life cycle Logically most of the product changes occur during the initial stages of the life cycle before major production starts This suggests that a project-type process is appropriate for this stage The product hen tends to go through many changes: simplification adding features newer materials and so forth The motivation here is for more performance and perhaps greater appeal to a broader market The flexibility of an intermittent-type process allows for these changes During the maturity stage of the product very few additional changes are made and the focus is on low costs which can be provided by a line-flow process Changes in the production process as shown in Part C of Exhibit 3.9. occur most rapidly during the early stages of production design and start up This is where choices are made in the production layout equipment tooling and so on The goal here is to reduce production costs Also both product and process engineers work together to reduce costs and increase product performance When full production occurs during the maturity phase few additional changes are made and volumes remain relatively constant During the decline phase of the product however some additional process changes occur these are due in part to switching the smaller production volumes to different equipment and facilities During the early stages in a product's life cycle when production quantities are small (certainly during the product research and development stages intermittent processes are typically used Here all similar machines and processes are grouped together in one location and are used for many different products As production volumes increase machines and processes may be grouped in a line-flow process to simplify the product's flow through the factory.