The Product-Process Matrix

Using the Right Process for the Volume of Work You're Doing

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.