The Product-Process Matrix
Monday, November 25, 2013
You're up against a deadline to get 500 important letters in the mail to your customers.
Which of these approaches do you think would be most efficient?
Scenario A: You assemble each letter one by one. You fold each piece of paper, put it in the envelope, address it, and stamp it.
Scenario B: You work on each task in batches. First you fold the letters. Then you stuff them in envelopes. Then you address each envelope. And finally you stamp them.
Whilst it's probably more boring, Scenario B is almost certainly more efficient because you can have the one or two items you need for that single task within easy reach, and you don't waste time switching between tasks.
But in other situations when the same set of tasks need to be carried out multiple times – whether you're dealing with product manufacture, administrative tasks or other types of work – it isn't always obvious how best to organize things.
This is where a tool like the Product-Process Matrix can help. In this article, we'll explain exactly what it is – and how it can help you to decide how to organize processes most efficiently. The tool is particularly useful when you’re introducing or making changes to the volumes of work or product that you need to process.
Understanding the Tool
The Product-Process Matrix was first introduced by Robert Hayes and Steven Wheelwright in the Harvard Business Review in 1979.
It helps organizations identify the type of production approach they should use for a product, based on the volumes of the product being produced, and the amount of customization it needs.
The matches between products and processes are shown in Figure 1 below. (This diagram shows an example that we'll refer to later in this article.)
A Product-Process Matrix Example
Here's a quick example to illustrate how the matrix could help make production more efficient.
Sarah has just opened her first small bicycle shop. All of her bikes are custom designed and built for clients, which is a very lengthy and expensive process. Sarah's business is in the 1a square on the matrix: she makes and sells one bike at a time, operating a low volume job shop.
Sarah's products are very well made, and business starts to improve as more customers place orders for her custom bikes. But Sarah doesn't change her process. She continues to build and sell one bike at a time, and her reputation suffers because there's such a long waiting list.
This means that she's moved to the 3a square. She still builds bikes as if there's a low-volume demand – although, in reality, she now has a high-volume business.
If Sarah doesn't change her process, she might ultimately go out of business, or at least lose customers who don't want to wait for a bike. However, if she looks at the Product-Process Matrix, she'll realize that she needs to hire staff and set up an assembly line to handle the higher volume of orders. Based on her increasing demand, she really needs to be in the 3c square.
The Product-Process Matrix in Detail
Although the Product-Process Matrix was originally created with manufacturing in mind, we can use this tool to help make our own tasks and projects run more efficiently. Let's look at the key squares in greater detail, and then discuss how you can apply the Product-Process Matrix in your own life.
1a – Job Shop/Low Volume, Low Standardization
Job shops carry out small, unique production. Each item or task is done by hand, one at a time. There's very little, or no, standardization.
Example: Sarah creates custom-made products from start to finish.
Benefits – flexibility, uniqueness, quality.
Disadvantages – not cost-effective, not efficient.
2b – Batch/Multiple Products, Low Volume
Batch production occurs when parts of a project or product are processed together to increase efficiency. This is still a lower-volume process, but it can handle more than the job shop.
Example: In Sarah's bike shop, she could attach the wheels onto 10 bikes that will all be built to the same specification. Then she can attach the pedals, brakes, and so on.
Benefits – increased efficiency for each step due to repetition.
Disadvantages – potential for confusing flow as half-completed projects or products begin to pile up.
3c – Connected Line Flow/Few Major Products, High Volume
When volume continues to increase, an assembly line is set up. Each worker has a specific role, or task, to complete.
Example: Sarah sets up a production line to assemble bikes. One person attaches wheels to each frame as it passes, then it goes to someone else to add pedals, and so on. The production line is stopped and adjusted periodically so that a different model can be made.
Benefits – very efficient, easy-to-maintain standards.
Disadvantages – little flexibility, less ability to customize products.
Note:
Since this matrix was developed in 1979, some companies – Dell is a famous example – have worked out how to customize products on a high volume basis. However this matrix is still relevant in many industries.
4d – Continuous Flow/High Volume, High Standardization
When volume is extremely high and the range of products is extremely small, continuous flow is set up. Continuous flow means that production never stops. This approach is used primarily in factories.
Example: Operates 24 hours per day
Benefits – low cost to operate, ability to handle very large volumes.
Disadvantages – no flexibility, very limited product/project range, expensive to set up.
Note:
Once a production system has got to 2b, it can EITHER move to 3c OR 4d. 3c is used where discrete units – such as bikes, bottles of soda, or garments – are being produced. 4d is only suitable for processing "bulk" raw materials such as liquids, gasses, or granular solids such as sand or coal. The output from 4d production is often an input into a 3c system (for example, soda feeds into a soda bottling process).
The progression which has a sugar refinery as the process for 4d in Figure 1, could start at stage 1a with a farmer slicing up sugar beet, boiling it in a single pan, and then pressing out the sugar, and so on. By Stage 2b, the farmer would have invested in enough equipment and people so that each activity was handled by a different person. Someone would slice sugar beet all day, passing his "output" to someone else who boiled pan after pan, and so on.
Key Points
We often work on projects or tasks without looking at the big picture. If we do something on a regular basis, it might be more efficient to standardize the process and delegate it to a team. This leaves us open to work on higher-value tasks. Use the Product-Process Matrix to help identify your tasks and determine if they're matched with the correct processes.
Apply This to Your Life
How can you use the Product-Process Matrix in your own life?
Look at the tasks you regularly do during your workday. Do you currently use a "job shop" approach for any, where you should really be using a batch or assembly line process?
If any tasks or projects could be standardized, write a procedure and create a plan to delegate the project to a person or team that could create it more efficiently. Remember, look at the volume and frequency to determine what kind of process (batch or assembly line) might be appropriate to complete it more efficiently.
It's sometimes useful to analyze in the opposite direction. That is, perhaps some standardized "assembly line" procedures should be handled instead with more of a "job shop" approach.
For instance, imagine that you work in a customer service department. Most consumer complaints are handled automatically by "autoresponder" emails, which are sent to customers based on keywords found in the initial email. However, customers often become frustrated because these "autoresponses" don't answer their questions. In this case, the customer service department may become more effective if it decreases efficiency and handles complaints one at a time.
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Which of these approaches do you think would be most efficient?
Scenario A: You assemble each letter one by one. You fold each piece of paper, put it in the envelope, address it, and stamp it.
Scenario B: You work on each task in batches. First you fold the letters. Then you stuff them in envelopes. Then you address each envelope. And finally you stamp them.
Whilst it's probably more boring, Scenario B is almost certainly more efficient because you can have the one or two items you need for that single task within easy reach, and you don't waste time switching between tasks.
But in other situations when the same set of tasks need to be carried out multiple times – whether you're dealing with product manufacture, administrative tasks or other types of work – it isn't always obvious how best to organize things.
This is where a tool like the Product-Process Matrix can help. In this article, we'll explain exactly what it is – and how it can help you to decide how to organize processes most efficiently. The tool is particularly useful when you’re introducing or making changes to the volumes of work or product that you need to process.
Understanding the Tool
The Product-Process Matrix was first introduced by Robert Hayes and Steven Wheelwright in the Harvard Business Review in 1979.
It helps organizations identify the type of production approach they should use for a product, based on the volumes of the product being produced, and the amount of customization it needs.
The matches between products and processes are shown in Figure 1 below. (This diagram shows an example that we'll refer to later in this article.)
A Product-Process Matrix Example
Here's a quick example to illustrate how the matrix could help make production more efficient.
Sarah has just opened her first small bicycle shop. All of her bikes are custom designed and built for clients, which is a very lengthy and expensive process. Sarah's business is in the 1a square on the matrix: she makes and sells one bike at a time, operating a low volume job shop.
Sarah's products are very well made, and business starts to improve as more customers place orders for her custom bikes. But Sarah doesn't change her process. She continues to build and sell one bike at a time, and her reputation suffers because there's such a long waiting list.
This means that she's moved to the 3a square. She still builds bikes as if there's a low-volume demand – although, in reality, she now has a high-volume business.
If Sarah doesn't change her process, she might ultimately go out of business, or at least lose customers who don't want to wait for a bike. However, if she looks at the Product-Process Matrix, she'll realize that she needs to hire staff and set up an assembly line to handle the higher volume of orders. Based on her increasing demand, she really needs to be in the 3c square.
The Product-Process Matrix in Detail
Although the Product-Process Matrix was originally created with manufacturing in mind, we can use this tool to help make our own tasks and projects run more efficiently. Let's look at the key squares in greater detail, and then discuss how you can apply the Product-Process Matrix in your own life.
1a – Job Shop/Low Volume, Low Standardization
Job shops carry out small, unique production. Each item or task is done by hand, one at a time. There's very little, or no, standardization.
Example: Sarah creates custom-made products from start to finish.
Benefits – flexibility, uniqueness, quality.
Disadvantages – not cost-effective, not efficient.
2b – Batch/Multiple Products, Low Volume
Batch production occurs when parts of a project or product are processed together to increase efficiency. This is still a lower-volume process, but it can handle more than the job shop.
Example: In Sarah's bike shop, she could attach the wheels onto 10 bikes that will all be built to the same specification. Then she can attach the pedals, brakes, and so on.
Benefits – increased efficiency for each step due to repetition.
Disadvantages – potential for confusing flow as half-completed projects or products begin to pile up.
3c – Connected Line Flow/Few Major Products, High Volume
When volume continues to increase, an assembly line is set up. Each worker has a specific role, or task, to complete.
Example: Sarah sets up a production line to assemble bikes. One person attaches wheels to each frame as it passes, then it goes to someone else to add pedals, and so on. The production line is stopped and adjusted periodically so that a different model can be made.
Benefits – very efficient, easy-to-maintain standards.
Disadvantages – little flexibility, less ability to customize products.
Note:
Since this matrix was developed in 1979, some companies – Dell is a famous example – have worked out how to customize products on a high volume basis. However this matrix is still relevant in many industries.
4d – Continuous Flow/High Volume, High Standardization
When volume is extremely high and the range of products is extremely small, continuous flow is set up. Continuous flow means that production never stops. This approach is used primarily in factories.
Example: Operates 24 hours per day
Benefits – low cost to operate, ability to handle very large volumes.
Disadvantages – no flexibility, very limited product/project range, expensive to set up.
Note:
Once a production system has got to 2b, it can EITHER move to 3c OR 4d. 3c is used where discrete units – such as bikes, bottles of soda, or garments – are being produced. 4d is only suitable for processing "bulk" raw materials such as liquids, gasses, or granular solids such as sand or coal. The output from 4d production is often an input into a 3c system (for example, soda feeds into a soda bottling process).
The progression which has a sugar refinery as the process for 4d in Figure 1, could start at stage 1a with a farmer slicing up sugar beet, boiling it in a single pan, and then pressing out the sugar, and so on. By Stage 2b, the farmer would have invested in enough equipment and people so that each activity was handled by a different person. Someone would slice sugar beet all day, passing his "output" to someone else who boiled pan after pan, and so on.
Key Points
We often work on projects or tasks without looking at the big picture. If we do something on a regular basis, it might be more efficient to standardize the process and delegate it to a team. This leaves us open to work on higher-value tasks. Use the Product-Process Matrix to help identify your tasks and determine if they're matched with the correct processes.
Apply This to Your Life
How can you use the Product-Process Matrix in your own life?
Look at the tasks you regularly do during your workday. Do you currently use a "job shop" approach for any, where you should really be using a batch or assembly line process?
If any tasks or projects could be standardized, write a procedure and create a plan to delegate the project to a person or team that could create it more efficiently. Remember, look at the volume and frequency to determine what kind of process (batch or assembly line) might be appropriate to complete it more efficiently.
It's sometimes useful to analyze in the opposite direction. That is, perhaps some standardized "assembly line" procedures should be handled instead with more of a "job shop" approach.
For instance, imagine that you work in a customer service department. Most consumer complaints are handled automatically by "autoresponder" emails, which are sent to customers based on keywords found in the initial email. However, customers often become frustrated because these "autoresponses" don't answer their questions. In this case, the customer service department may become more effective if it decreases efficiency and handles complaints one at a time.
