Volume Variety Matrix

Volume- multifariousness and design In Chapter 1 the four Vs of trading operations were described. These were meretriciousness, variety, variation and visibility. The first two of these volume and variety atomic number 18 speci anyy important when considering design issues in operations attention. non but do they commonly go together (high variety commonly centre minor volume, high volume normally means minuscule variety) but together they likewise impact on the nature of yieldions and run and swear outes which aver them. The volume and variety of an operations activities are particularly influential in determining the way it thinks about its answerance objectives.The approach pattern be number one illustrates how the definitions of quality, speed, reli competency, tractability and price are influenced by the volume-variety thought of the operation. pic persona Quality in a low volume-high variety process much(prenominal)(prenominal) as an architects prac tice, for example, is largely touch on with the final aesthetic appearance of the mental synthesis and the take into accountness of its detailed design. In an exceptionally high volume-low variety process, much(prenominal) as an galvanisingity supply troupe, quality is exclusively concerned with error-free overhaul electricity must be constantly gettable in the crystalise form (in legal injury of voltage, frequency, etc. . The gist of quality has shifted from being concerned primarily with the performance and specification of the product or service towards harmony to a pre specify standard, as we move from low volume-high variety operations finished to high volume-low variety operations. press forward Speed for the architects practice means negotiating a completion date with each client, based on the clients admits and the architects estimates of how much constitute is affect in each project. Speed is taken to its extreme in the electricity utility where speed means literally instant li rattling.No electricity company could ask its customers to wait for their deli rattling of electricity. Speed therefore means an individualisticly negotiated delivery time in low volume-high variety operations, but moves towards meaning instant delivery in almost high volume-low variety operations. Dep break offability Dep restability 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 varied kinds of buildings according to its clients various invitements. With the electricity comp anys process, the need for product flexibility has disappeared entirely (electricity is electricity, more or less) but the ability to meet almost instantaneous quest changes by 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. salute Cost, in terms of the social unit price per product or service, varies with both(prenominal) the volume of railroad siding of the operation and the variety of products or function it aims. The variety of products or services in low-volume operations is relatively high, which means that running the operation go out be expensive beca physical exercise of the flexible and high skill levels employed. Further, because the volume of produce is relatively low, a few products or services are pushchair the operations high cost base.Also, and more signifi open firetly for the operatio n, 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 subdue of products or services. Cost per unit of output is therefore usually low for operations such as the electricity utility but, more meaning(a)ly, 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 requirement is high enough, the appropriate process is the crowd line. Often, this process (along with continuous both are in the lower-right quadrant of the intercellular substance) is referred to as mass production. Laborers broadly perform the same operations for each production run in a standard and hopefully uninterrupted come down. The assembly line treats all outputs as elementaryally the same.Firms characterized by this process are generally heavily automated, utilizing special-purpose equipment. Frequently, some form of conveyor system connects the various pieces of equipment used. There is usually a fixed hatful 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 harbour to be monitored and controlled.This also means that the managers drag of control can increase and less skilled workers can be utilized. 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 course divisible). Almost everyone can think of an example of assembly-line manufacturing (automobile manufactur ing is probably the most obvious). Examples of assembly lines in services are car washes, class registration in universities, and many fast food operations.Because the work-in-process equipment is take formd and sequenced according to the steps involved to produce the product and is frequently connected by some dissever of conveyor system, it is characterized as flowing in a line. Even though it may not be a straight line (some regulars utilize a U-shaped assembly line) we say that it has a connected line flow. Also, unattackables in the lower-right quadrant (line and continuous) are classified as having a product layout. day-and-night manufacturing involves lot-less production wherein the product flows continuously earlier than being divided. A basic material is passed through successive operations (i. e. refining or processing) and in the end emerges as one or more products. This process is used to produce exceedingly standardized outputs in extremely large volumes. The pr oduct course is usually so narrow and passing 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 stopping 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 inviolable to spread their enormous fixed cost over as large a base as realistic.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 fabricate is also a heavy user of continuous proces sing specially water, milk, wheat, flour, sugar and spirits.Read more Product-Process matrix strategy, organization, system, examples, manager, company, business, competitiveness, system http//www. referenceforbusiness. com/management/Or-Pr/Product-Process-Matrix. htmlixzz24d4V1uTD pic pic apply THE MATRIX The product-process matrix can facilitate the gaining 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 view 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 m ore effectively with those of marketing and of the corporation itself, all the enchantment leading to more informed predictions about changes in fabrication and the firms appropriate strategic responses. Each process choice on the matrix has a unique set of characteristics.Those in the upper-left field quadrant of the matrix (job betray 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, as welll and die take formrs, melodious instrument craftsmen) and professionals (lawyers, doctors, CPAs, consultants). Hence upper-left firms can be characterized as labor intensive. Since upper-left firms range to utilize general-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 problematic trade-off between ability 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 cost over a wide enough base to provide for trim costs. Finally, upper-left firms are also more likely to serve local markets. Lower-right firms require production facilities that are highly vary, capital intensive, and interrelated (therefore, inflexible).Labor requirements are generally unskilled or semi-skilled at most. Much of the labor requirement deals with save monitoring and maintaining equipment. Lower-right firms are also more likely to serve internal markets and can be vertically integrated. Hayes and Wheelwright relate deuce-ace areas affected by the use of the product-process matrix distinctive competence, management, and organization. DISTINCTIVE COMPETENCE. characteristic competence is defined as the resources, skills, and organiza tional 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 finespun 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-l eft firm. This is especially authorized when dealing with the need for flexibility of the product/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 take an advantage regarding flexibility of volume. Quality may be defined a number ways. If we define quality as reliability, hence lower-right firms could claim this as a distinctive competence. Lower-right firms would have the high volume necessary to pronto 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 lea ther 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, call 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 deep down the domain of lower-right firms. MANAGEMENT.In gen eral, the economics of production processes favor positions along the one-sided of the product-process matrix. That is, firms operate(a) on or close to the diagonal are expected to travel by 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 operating in the near vicinity, but not exactly on the diagonal, can be niche players, positions farther away from the diagonal are difficult to justify. Rolls Royce makes automobiles in a job shop environment but they understan d the implications involved. Companies off the diagonal must be aware of traps it can decline in quality into and 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 under 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 th e lower-left corner of the matrix not a desirable place to be. This knowledge forced the company to realize that what they were whirl 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 die portions of the total manufacturing task while still maintaining overall coordination. Most firms pass on 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 entraper facilities for different products or parts, or they may simply separate their product ion 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 bespoke 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 incoming and exit. Determining the appropriate mix of manufacturing facilities, identifying the key manufacturing objectives for each plant, and monitoring boost on those objectives at the corporate level. Reviewing investment decisions for plants and equipment in terms of their eubstance 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 comp anys 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 found the proposed birth 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 percent 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 alternatively of two.They propose a n 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