The product-process matrix was introduced in two articles published in the Harvard Business Review in 1979. Developed by Robert H. Hayes and Steven C. Wheelwright, the matrix assesses the relationship between:
The stages of the product life cycle (from ideation to growth or decline), and
The stages of the process (technological) life cycle.
Product-Process Matrix
Description
Analysis
Implications
Examples
Project Layout
Low volume, high variety: Unique, custom-made products.
Each product is individually crafted, resulting in high customization and variety.
High flexibility, longer production times, and skilled labor are necessary.
Custom-built luxury yachts, one-of-a-kind art pieces.
Workcenter Layout
Low volume, low variety: Low volume of standardized products.
Products are made in batches, but each batch consists of similar items.
Moderate flexibility, efficient for small-scale production.
Bakery producing various types of bread, small machine shops.
Manufacturing Cell
Medium volume, low variety: Moderate volume of similar products.
Products are made in batches, but each batch consists of similar items.
Balanced flexibility and efficiency, suitable for medium-scale production.
Car assembly line producing various car models, apparel factories.
Assembly Line Layout
High volume, low variety: High volume of standardized products.
Mass production with high volume and minimal customization.
High efficiency, low unit costs, limited flexibility.
Fast-food chain producing a standard menu, automotive plants.
Continuous Process
High volume, very low variety: Continuous production of identical products.
Ongoing, uninterrupted production of a single, standardized product.
Maximum efficiency, lowest unit costs, minimal flexibility.
The product-process matrix (PPM) is a tool for assessing the relationship between the product and process lifecycle.
Businesses use the product-process matrix to understand better various strategic options related to their manufacturing operations.
By incorporating knowledge of the interaction between the product and process life cycle into strategic planning, the business can think creatively to improve organizational competence and establish a competitive advantage.
The PPM matrix can also involve manufacturing staff in opportunities, decisions, and continuous improvement initiatives where they would otherwise not be consulted.
To that end, the matrix can serve as a precursor to a root cause analysis and can also be used to identify process bottlenecks.
The structure of the product-process matrix
The product-process matrix contains sixteen cells with two dimensions:
Product structure/product life cycle – which occupies the four columns of the matrix, and
Process structure/process life cycle – occupies the matrix’s four rows.
Product development process columns
Each of the four columns denotes a product as it moves across different manufacturing phases:
Low volume, one-of-a-kind (unique) products with low standardization.
Low volume, multiple products that are not one-of-a-kind.
Higher volume standardized products, and
Very high volume commodity products.
Process lifecycle rows
Each of the four rows, on the other hand, describes various processes:
Jumbled flow.
Disconnected line flow.
Connected line flow, and
Continuous flow.
The four distinct stages of the product-process matrix
The region a business occupies in the matrix is determined by its stage in the product life cycle and its choice of the production process.
Imagine that a diagonal line is drawn from the top left cell to the bottom right cell of the PPM.
According to Hayes and Wheelwright, this line is where most organizations reside since product and process choices naturally align.
Four stages fall along the diagonal line, and each has a set of unique characteristics.
In the first stage at the top left of the matrix, production is not standardized and is thus more expensive.
By the fourth stage of the matrix, however, production has become standardized, mechanized, automated, and thus more cost-effective.
To better understand this evolution, we will describe each of the four stages below.
1 – Job shop
In the first stage, organizations manufacture different products in small quantities.
The unique nature of products necessitates customization, direct interaction with the customer, and skilled expertise or craftsmanship.
This production process favors creativity and flexibility over repetition and efficiency.
It may also be time-consuming if certain raw materials or skills are unavailable.
Medical practices, mechanics, and artisanal producers are good examples of job shops since the product is customized and frequently requires different operations.
2 – Batch
Batch processes can produce more products than a job shop, but the volume per product has not quite reached a level that justifies the purchase of dedicated equipment.
Products that are batch produced are sometimes accumulated until a sizeable amount can be processed simultaneously.
The flow of work also tends to be smoother since many processes can be repeated as often as necessary.
However, the work-in-process still moves around the facility in a somewhat jumbled fashion known as disconnected or intermittent flow.
Examples include offices that process orders in batches and some operations within hospitals.
3 – Assembly line
The assembly line stage caters to high product demand and, along with the fourth stage below, is a form of mass production.
Workers perform the same operations for each production run, and all outputs are mostly the same.
The assembly line may be characterized by automation, specialized or robotic equipment, and conveyor belts connecting the various plant infrastructure pieces.
With fixed inputs and outputs, constant throughput time, and a relatively continuous flow of work, managers have a wider span of control since fewer workers are required.
While standardization increases process efficiency and makes it easier to manage, there is almost zero variety or flexibility in the goods produced.
4 – Continuous
The continuous stage is characterized by a very high volume of commodity products and high standardization, which can be a competitive advantage.
Items tend to move from one part of the process to the next with little human intervention.
Since continuous processes are capital intensive, product demand must be matched.
Starting or stopping the process can also be expensive – sometimes prohibitively so.
To spread out the cost of operations and benefit from economies of scale, most businesses run operations 24/7.
Examples of industries utilizing this process include chemicals, electricity, petroleum, paper, and timber.
Continuous processes are also prevalent in commoditized food products such as milk, wheat, flour, and sugar.
Key takeaways
The product-process matrix (PPM) is a tool for assessing the relationship between the product and process lifecycle.
The product-process matrix contains sixteen cells, with manufacturing phases of the product lifecycle occupying the four columns and various processes in the process lifecycle occupying the four rows.
Most organizations reside on a diagonal line in the PPM matrix since product and process choices tend to align with one another. Along this line are four stages which explain how a production process evolves to become more automated, more standardised, and less flexible.
Key Highlights
Purpose of the Matrix: The Product-Process Matrix helps organizations better understand their manufacturing operations’ strategic options by considering the alignment between the product and process life cycles.
Strategic Planning and Competitive Advantage: Incorporating knowledge of how product and process life cycles interact can lead to improved organizational competence and the establishment of a competitive advantage.
Involvement of Manufacturing Staff: The matrix can involve manufacturing staff in decision-making and continuous improvement initiatives that they might not otherwise be part of.
Root Cause Analysis and Bottleneck Identification: The matrix can serve as a precursor to root cause analysis and help identify process bottlenecks.
Matrix Structure: The matrix consists of sixteen cells categorized into four columns representing the stages of the product life cycle and four rows representing the stages of the process life cycle.
Product Development Process Columns: The columns represent different manufacturing phases, from low volume, one-of-a-kind products to very high volume commodity products.
Process Lifecycle Rows: The rows describe different types of processes, including jumbled flow, disconnected line flow, connected line flow, and continuous flow.
Four Stages of the Matrix: There are four stages that fall along the diagonal line drawn across the matrix, each with its unique characteristics:
Job Shop: Customized, low-volume products requiring craftsmanship and customer interaction.
Batch: Batch-produced products with somewhat smoother flow compared to job shops.
Assembly Line: High product demand with standardized, automated processes and less variety in products.
Continuous: Very high volume, highly standardized products with continuous, automated processes.
Evolution of Production Processes: As businesses progress along the diagonal line of the matrix, their production processes become more automated, standardized, and efficient.
Related Frameworks
Description
When to Apply
Mass Customization
– A business strategy that combines the low cost of mass production with the flexibility of customization to meet individual customer needs. Mass Customization leverages technology and flexible processes to produce customized products at scale.
– When aiming to satisfy diverse customer preferences and requirements while achieving economies of scale in production effectively. – Implementing Mass Customization to leverage technology and flexible processes for producing customized products at scale.
Just-In-Time (JIT)
– A production strategy aimed at minimizing inventory levels and production lead times by producing goods only as needed. Just-In-Time (JIT) emphasizes waste reduction, continuous improvement, and close coordination with suppliers.
– When seeking to reduce inventory holding costs, minimize production lead times, and improve operational efficiency effectively. – Implementing Just-In-Time (JIT) to streamline production processes, minimize waste, and improve responsiveness to customer demand.
Total Quality Management (TQM)
– A management philosophy focused on continuous improvement, customer satisfaction, and employee involvement in all aspects of the organization. Total Quality Management (TQM) emphasizes the importance of quality at every stage of the production process.
– When aiming to improve product quality, customer satisfaction, and organizational performance through continuous improvement and employee involvement effectively. – Implementing Total Quality Management (TQM) to foster a culture of quality, customer focus, and continuous improvement.
Lean Manufacturing
– A production methodology aimed at maximizing value and minimizing waste in manufacturing processes. Lean Manufacturing principles include identifying and eliminating non-value-added activities, improving flow, and empowering employees.
– When seeking to improve efficiency, reduce waste, and enhance value in manufacturing processes effectively. – Implementing Lean Manufacturing principles to streamline operations, improve productivity, and increase competitiveness.
Six Sigma
– A data-driven approach to process improvement aimed at reducing defects, variation, and waste to achieve near-perfect quality. Six Sigma methodology involves Define, Measure, Analyze, Improve, and Control (DMAIC) phases to identify and eliminate causes of defects systematically.
– When aiming to achieve significant quality improvements, reduce defects, and optimize processes effectively. – Implementing Six Sigma methodology to systematically identify and eliminate causes of defects and variation.
Kaizen
– A Japanese term for continuous improvement, emphasizing small, incremental changes made by employees at all levels of the organization. Kaizen fosters a culture of continuous learning, problem-solving, and innovation.
– When seeking to drive continuous improvement, empower employees, and cultivate a culture of innovation effectively. – Implementing Kaizen principles to encourage small, incremental changes and continuous learning throughout the organization.
Agile Manufacturing
– A production approach that emphasizes flexibility, responsiveness, and rapid adaptation to changing customer demands and market conditions. Agile Manufacturing enables organizations to quickly adjust production processes and product designs based on real-time feedback.
– When facing rapidly changing customer demands, market conditions, or technological advancements and needing to adapt production processes and product designs quickly and efficiently. – Implementing Agile Manufacturing principles to enhance flexibility, responsiveness, and adaptability in manufacturing operations.
Theory of Constraints (TOC)
– A management philosophy focused on identifying and alleviating bottlenecks or constraints that limit organizational performance. Theory of Constraints (TOC) emphasizes the importance of optimizing the flow of work through the system.
– When facing bottlenecks or constraints that limit organizational performance and seeking to optimize flow and improve throughput effectively. – Applying Theory of Constraints (TOC) principles to identify and alleviate constraints and improve overall system performance.
Value Stream Mapping (VSM)
– A visual tool used to analyze, document, and improve the flow of materials and information required to bring a product or service to customers. Value Stream Mapping (VSM) identifies waste, inefficiencies, and opportunities for improvement in production processes.
– When seeking to identify and eliminate waste, inefficiencies, and bottlenecks in production processes effectively. – Using Value Stream Mapping (VSM) to analyze, document, and improve the flow of materials and information in production processes.
Cellular Manufacturing
– A production approach that organizes machines and workstations into cells, allowing for the continuous flow of materials and reduced setup times. Cellular Manufacturing promotes flexibility, efficiency, and teamwork within production processes.
– When aiming to enhance flexibility, efficiency, and teamwork in manufacturing processes by organizing machines and workstations into cells effectively. – Implementing Cellular Manufacturing principles to promote continuous flow, reduce setup times, and improve overall productivity.
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The product-process matrix was introduced in two articles published in the Harvard Business Review in 1979. Developed by Robert H. Hayes and Steven C. Wheelwright, the matrix assesses the relationship between:
The stages of the product life cycle (from ideation to growth or decline), and
The stages of the process (technological) life cycle.
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Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
