Page 220 - DMGT501_OPERATIONS_MANAGEMENT

Operations Management

Notes 7.4 Characteristics of Different Production Systems

The product-process matrix allows a firm to assess the ‘strategic fit’ between its current posture

and current resources. It provides the basis for managers to choose from the alternative processes.
This decision should be based on the following criteria:
1. What will each alternative cost in the short-term and long-term?
2. What will each alternative provide in terms of cost, quality, time, and availability of
output?
3. What will each alternative require in terms of raw materials, energy, infrastructure,
managerial talents, and other inputs?
The product-process matrix can also indicate how to shape operations strategy in the future.

Consider a firm that has to design a future process for a product whose demand is going to

increase substantially. The firm should plan to redeploy its future resources toward more high-
volume and low-cost processes—assembly lines, systematic automation of processes, greater
process engineering expertise, more standard operating procedures, dedicated equipment,
greater specialization, and the like.

Similarly an organization, foreseeing the growth of the Internet and/or flexible resources, must
change its strategic alignment from cost toward greater product variety and greater flexibility.

The characteristics of different production systems as obtained from the product-process matrix
are summarized in Table 7.2.
Table 7.2: Characteristics of Different Manufacturing Systems

Table 7.2 also shows the relationship between process choice and the other key process decisions
and how they are tied to volume. The relationship of the process with volume is often considered
the common denominator in determining process design strategy. This, in turn, comes from

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