Volume Variety Matrix

Volume- grade and design In Chapter 1 the four Vs of operations were described. These were loudness, variety, variation and visibility. The first two of these volume and variety atomic number 18 peculiarly important when considering design issues in operations focal point. non still do they unremarkably go together (high variety norm e rattling(prenominal)y federal agency slump volume, high volume normally means piteous variety) but together they in addition impact on the nature of overlaps and operate and suees which lay down them. The volume and variety of an operations activities are particularly influential in determining the way it thinks about its manageance objectives.The see to it be humbled illustrates how the definitions of quality, speed, dep suppress competency, flexibleness and equal are influenced by the volume-variety station of the operation. pic feel Quality in a low volume-high variety process much(prenominal)(prenominal) as an architects p ractice, for example, is largely bear on with the final aesthetic appearance of the edifice and the enamorness of its detailed design. In an exceptionally high volume-low variety process, such(prenominal) as an galvanicity supply lodge, quality is exclusively concerned with error-free process electricity must be constantly l haltable in the sink form (in basis of voltage, frequency, etc. . The importation of quality has shifted from being concerned primarily with the performance and specification of the crossroad or service of process towards symmetry to a pre be standard, as we move from low volume-high variety operations with to high volume-low variety operations. stop turning Speed for the architects practice means negotiating a completion date with each client, based on the clients motives and the architects estimates of how much institute is mired in each project. Speed is taken to its extreme in the electricity utility where speed means literally instant p reservation.No electricity company could ask its customers to wait for their actors line of electricity. Speed therefore means an singlely negotiated delivery time in low volume-high variety operations, but moves towards meaning instant delivery in both(prenominal) high volume-low variety operations. Dependability Dependability in processes such as the architects practice means keeping to each individually negotiated delivery date. In continuous operations, dependability often means the availability of the service itself. A dependable electricity supply is one which is always there.So dependability has moved from meaning on-time delivery in low volume-high variety operations to availability in high volume-low variety operations. Flexibility Flexibility in low volume-high variety processes such as the architects practice means the ability to design many diametric kinds of buildings according to its clients various gestatements. With the electricity companys process, the need for product flexibility has disappeared entirely (electricity is electricity, more or less) but the ability to meet almost instantaneous study changes done volume flexibility is vital if the company is to maintain supply.Flexibility has moved from meaning product flexibility in low volume-high variety operations to volume flexibility in high volume-low variety operations. price Cost, in terms of the social unit dupe up per product or service, varies with twain the volume of take of the operation and the variety of products or function it let ons. The variety of products or services in low-volume operations is relatively high, which means that running the operation result be expensive beca enjoyment of the flexible and high skill levels employed. Further, because the volume of take is relatively low, a few products or services are manner the operations high cost base.Also, and more signifi bottomtly for the operation, the cost of each product or service is different. At the other end of the scale, high-volume operations usually produce similar products or services, output is high, so that whatever the base cost of the operation, it is shared among a high number of products or services. Cost per unit of output is therefore usually low for operations such as the electricity utility but, more strongly, the cost of producing one second of electricity is the same as the next second. Cost is relatively constant. Copyright 1995-2010, Pearson Education, Inc. Legal and Privacy Terms pic pic pic pic LINE. When product motive is high enough, the appropriate process is the accumulation line. Often, this process (along with continuous both are in the lower-right quadrant of the ground substance) is referred to as mass production. Laborers principally perform the same operations for each production run in a standard and hopefully uninterrupted arise. The assembly line treats all outputs as primaryally the same.Firms characterized by this process are gener ally heavily automated, utilizing special-purpose equipment. Frequently, some form of conveyor system connects the various pieces of equipment used. There is usually a fixed cross off of inputs and outputs, constant throughput time, and a relatively continuous flow of work. Because the product is standardized, the process can be also, following the same travel guidebook from one operation to the next. Routing, scheduling, and control are facilitated since each individual unit of output does not brook to be monitored and controlled.This also means that the managers spoil of control can increase and less skilled workers can be hired. The product created by the assembly-line process is discrete that is, it can be visually counted (as opposed to continuous processes which produce a product that is not naturally divisible). Almost everyone can think of an example of assembly-line manufacturing (automobile manufacturing is probably the most obvious). Examples of assembly lines in se rvices are car washes, class registration in universities, and many fast food operations.Because the work-in-process equipment is alignd and sequenced according to the steps involved to produce the product and is frequently connected by some come apart of conveyor system, it is characterized as flowing in a line. Even though it may not be a straight line (some secures utilize a U-shaped assembly line) we say that it has a connected line flow. Also, homes in the lower-right quadrant (line and continuous) are classified as having a product layout. continual manufacturing involves lot-less production wherein the product flows continuously rather than being divided. A basic material is passed through successive operations (i. e. refining or processing) and last emerges as one or more products. This process is used to produce super standardized outputs in extremely large volumes. The product govern is usually so narrow and extremely standardized that it can be characterized as a commodity. Considerable capital investment is required, so demand for continuous process products must be extremely high. Starting and stop the process can be prohibitively expensive. As a result, the processes usually run 24 hours a day with minimum downtime (hence, continuous flow). This also allows the sure to spread their enormous fixed cost over as large a base as realizable.The routing of the process is typically fixed. As the material is processed it usually is transferred automatically from one part of the process to the next, frequently with self-monitoring and adjusting. Labor requirements are low and usually involve only monitoring and maintaining the machinery. Typical examples of industries utilizing the continuous process include gas, chemicals, electricity, ores, rubber, petroleum, cement, paper, and wood. Food patch up is also a heavy user of continuous processing curiously water, milk, wheat, flour, sugar and spirits.Read more Product-Process matrix strateg y, organization, system, examples, manager, company, business, competitiveness, system http//www. referenceforbusiness. com/management/Or-Pr/Product-Process-Matrix. htmlixzz24d4V1uTD pic pic victimisation THE MATRIX The product-process hyaloplasm can facilitate the clearing of the strategic options available to a company, particularly with regard to its manufacturing function. A firm may be characterized as occupying a particular region in the matrix, determined by the stages of the product life cycle and its choice of production process(es) for each individual product.By incorporating this dimension into its strategic planning process, the firm encourages more creative thought process about organizational competence and competitive advantage. Also, use of the matrix provides a natural way to involve manufacturing managers in the planning process so they can relate their opportunities and decisions more effectively with those of marketing and of the corporation itself, all the season leading to more informed predictions about changes in attention and the firms appropriate strategic responses. Each process choice on the matrix has a unique set of characteristics.Those in the upper- unexpended quadrant of the matrix (job entrepot and batch) share a number of characteristics, as do those in the lower-right quadrant (assembly line and continuous). Upper-left firms employ highly skilled craftsmen (machinists, printers, withall and die makers, melodious instrument craftsmen) and professionals (lawyers, doctors, CPAs, consultants). Hence upper-left firms can be characterized as labor intensive. Since upper-left firms carry to utilize all-purpose equipment, are seldom at 100 portion capacity, and employ workers with a wide range of skills, they can be very flexible.However, there is a herculean trade-off between capacity and flexibility of operations. Most job shops tend to emphasize flexibility over efficiency. Since efficiency is not a strong point of upper-left firms, neither is low-cost production. Also, the low volume of production does not allow upper-left firms to spread their fixed be over a wide enough base to provide for bring down costs. Finally, upper-left firms are also more likely to serve local markets. Lower-right firms require production facilities that are highly specialised, capital intensive, and interrelated (therefore, inflexible).Labor requirements are generally unskilled or semi-skilled at most. Much of the labor requirement deals with but monitoring and maintaining equipment. Lower-right firms are also more likely to serve field markets and can be vertically integrated. Hayes and Wheelwright relate triple areas affected by the use of the product-process matrix distinctive competence, management, and organization. DISTINCTIVE COMPETENCE. distinctive competence is defined as the resources, skills, and organizational characteristics that give a firm a comparative advantage over its competitors.Simply put , a distinctive competence is the characteristic of a given product that causes the buyer to purchase it rather than the similar product of a competitor. It is generally accepted that the distinctive competencies are cost/price, quality, flexibility and service/time. By using the product-process matrix as a framework, a firm can be more particular about its distinctive competence and can concentrate its attention on a restricted set of process decisions and alternatives and a restricted set of marketing alternatives.In our discussion, we have seen that the broad range of worker skills and the employment of general-purpose equipment give upper-left firms a large degree of flexibility while the highly specialized, high-volume environment of lower-right firms yields very little in the way of flexibility. Therefore, flexibility would be a highly appropriate distinctive competence for an upper-left firm. This is especially true(a) when dealing with the need for flexibility of the produ ct/service produced. Lower-right firms find it very difficult to sidetrack a high-volume operation because of an engineering change in the product.An entire line would have to be shut down while tooling or machinery is altered and large volumes of possibly obsolete work-in-process are accounted for. Upper-left firms, however, would have none of these problems with which to contend. It must be noted though that lower-right firms may hold an advantage regarding flexibility of volume. Quality may be defined a number ways. If we define quality as reliability, so lower-right firms could claim this as a distinctive competence. Lower-right firms would have the high volume necessary to cursorily find and eliminate ugs in their product, yielding more reliability to the end user. However, if we define quality as quality of design (that is, bells and whistlesthings that embody status, such as leather seats in an automobile or a handcrafted musical instrument), then quality would be seen as a possible distinctive competence of upper-right firms. Service may also be defined in more ways than one. If one defines service as face to face interaction and personal attention, then upper-left firms could claim service as a distinctive competence. If service is defined as the ability to provide the product in a very short period of time (e. . , overnight), then service as a distinctive competence would belong to lower-right firms. Finally, opine that high volume, economies of scale, and low cost are characteristics of firms in the lower-right quadrant of the matrix. Upper-left firms produce low volumes (sometimes only one) and cannot take advantage of economies of scale. (Imagine, for instance, what you would have to pay for a handcrafted musical instrument. ) Therefore, it is obvious that price or cost competitiveness is at heart the domain of lower-right firms. MANAGEMENT.In general, the economics of production processes favor positions along the gash of the product-proces s matrix. That is, firms run on or close to the diagonal are expected to excel firms choosing extreme off-diagonal positions. Hayes and Wheelwright provide the example of a firm positioned in the upper-right corner of the matrix. This would appear to be a commodity produced by a job shop, an option that is economically unfeasible. A firm positioned in the lower-left corner would represent a unique one-time product produced by a continuous process, again not a feasible option.Both examples are too far off the diagonal. Firms that find themselves too far off the diagonal invite trouble by impairing their ability to compete effectively. While firms in operation(p) in the near vicinity, but not exactly on the diagonal, can be niche players, positions farther absent from the diagonal are difficult to justify. Rolls Royce makes automobiles in a job shop environment but they understand the implications involved. Companies off the diagonal must be aware of traps it can get down into an d implications presented by their position. Also, a firms choice of roduct-process position places them to the right or left of competitors along the horizontal dimension of the matrix and above or to a lower place its competitors along the vertical dimension of the matrix. The strategic implications are obvious. Of course, a firms position on the matrix may change over time, so the firm must be aware of the implications and maintain the capability to deal with them appropriately. The matrix can provide powerful insights into the consequences of any planned product or process change. Use of the product-process matrix can also help a firm define its product.Hayes and Wheelwright relate the example of a specialized manufacturer of printed circuit boards who produced a low-volume, customized product using a highly connected assembly-line process. Obviously, this would place them in the lower-left corner of the matrix not a desirable place to be. This knowledge forced the company to re alize that what they were fling was not really circuit boards after all, but design capability. So, in essence, they were mass-producing designs rather than the boards themselves. Hence, they were not far off the diagonal at all.ORGANIZATION. Firms organize different operating units so that they can specialize on purloin portions of the total manufacturing task while still maintaining overall coordination. Most firms leave behind select two or more processes for the products or services they produce. For example, a firm may use a batch process to make components for products, which are constructed on assembly lines. This would be especially true if the work content for component production or the volume needed was not sufficient for the creation of a dedicated line process.Also, firms may need depart facilities for different products or parts, or they may simply separate their production within the same facility. It may even be that a firm can produce the similar products through two different process options. For example, Fender Musical Instruments not only mass produces electric guitars (assembly line) but also offers customized versions of the same product through the Fender custom Shop (job shop). Again, the matrix provides a valuable framework for diagnostic use in these situations.OTHER USES OF THE PRODUCT-PROCESS MATRIX Additional uses of the matrix include Analyzing the product entry and exit. Determining the appropriate mix of manufacturing facilities, identifying the key manufacturing objectives for each plant, and monitoring pass on on those objectives at the corporate level. Reviewing investment decisions for plants and equipment in terms of their trunk with product and process plans. Determining the direction and timing of major changes in a companys production processes. Evaluating product and market opportunities in light of the companys manufacturing capabilities. Selecting an appropriate process and product structure for entry into a new market. It should be noted that recent empirical research by Sohel Ahmad and Roger G. Schroeder lay out the proposed alliance between product structure and process structure to be significant but not strong. In general terms, they found that as the product life cycle changes the process life cycle also shifts in the consistent direction, but not necessarily along the diagonal.Some 60 pct of the firms studied did not fall on the diagonal. The researchers propose that this occurred because new management and technological initiatives have eliminated or minimized some of the inherent trade-offs found on the Product-Process Matrix. They classify these initiatives as processing technology, product design and managerial practice (e. g. , TQM and JIT). Therefore, Ahmad and Schroeder recommend that the matrix be conceptualized as having three axes rather of two.They propose an x-axis (product life cycle stages), a y-axis (process life cycle stages), and a z-axis that represents an organizations proactive effort towards adopting and implementing these innovative initiatives. As a firm moves away from the origin along the z-axis, it becomes able to minimize some of the trade-offs seen in the Product-Process Matrix framework. Read more Product-Process Matrix strategy, organization, system, examples, manager, company, business, competitiveness, system http//www. referenceforbusiness. com/management/Or-Pr/Product-Process-Matrix. h tmlixzz24d4lyOQ5 pic pic pic pic pic pic pic pic