product-process-matrix

Product-Process Matrix

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.

Understanding the product-process matrix

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:

  1. Low volume, one-of-a-kind (unique) products with low standardization. 
  2. Low volume, multiple products that are not one-of-a-kind.
  3. Higher volume standardized products, and
  4. Very high volume commodity products.

Process lifecycle rows

Each of the four rows, on the other hand, describes various processes:

  1. Jumbled flow.
  2. Disconnected line flow.
  3. Connected line flow, and
  4. 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.

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