Page 218 - DMGT501_OPERATIONS_MANAGEMENT

Operations Management

Notes Figure 7.4: Product-Process Matrix

Product Characteristics

High Volume High Volume Moderate Volume Low Volume One of a
Commodity Some Product Multiple Many kind
Products Variety Products Products Products

Process Low High

Alternative Unit Costs Unit Costs

Continuous Low Petrochemicals, Reliance

Flow Product Industries

Variety
Assembly
Line Printed Circuit Boards, ECIL

Batch Scientific Computers, ECIL.
Flow

FMS Assembly of different Automobiles
On the same assembly line e.g. Maruti
Cell
Manufacture of bicycle subassembles,
Job Shop High
Product
Project Variety TCIL

Manufacture of Jigs and
Fixtures, TELCO.
Construction Contracts, L&T

The production system also has to deal with low volume, multiple standard products or high
volume multiple standard products. Operations Management has to combine these patterns in
different manners. In many production systems, parts manufacture is a process focused system
and assembly is a product focused system.
Figure 7.6 shows these relationships with examples. The vertical axis within the matrix refl ects
the links between process choice and product variety, and the horizontal axis process choice,
represent the subsequent link between process choice and the other product characteristics e.g.,
volume, nature and unit costs. The diagonals help place a firm with the most appropriate match

up of process.

For example, a firm that produces low volumes of unique products is advised to use a job shop
structure, whereas one that produces high volumes of commodity products should best use a

continuous flow process. The industries listed within the matrix are presented as representative
types in their structural niche, though it is possible for them to choose another position on the
matrix.
If an organization decides to use a job shop process for a high-volume standard product, the
firm would normally lose significant opportunities to increase market share or make more profi t.

Lacking process efficiency, such a firm may become incapable of competing with fi rms that have
more efficient processes. Similarly, if a firm sets up a line process for low-volume customized

products, it would incur significantly higher investments in processes, equipment, and methods

than necessary.
Based on the product-process matrix there are two ends of a continuum of production systems,
which are: (a) process focused systems, and (b) product focused systems.

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