Facility Layout: The Product-Process Matrix

The article describes a series of stages that the production process passes through. The process evolution begins with a very flexible process that is not very cost efficient. As time passes, the process becomes more standardized, mechanized, and automated. The end of the cycle is characterized by a very systematic process that is very efficient, but extremely capital intensive and inflexible. Similarly, products go through life cycle stages that we are more familiar with than the process counterpart. The process life cycle is illustrated by a product-process matrix which represents the interaction of the product and process lifecycles. The rows represent the stages through which a production process passes (flexible form in the top row to systematic form in the bottom row), and the columns represent the different product life cycle phases (great variety start-up phase on the left hand side to standardized commodity mature phase on the right hand side). A company can be characterized by its position on the matrix. The positions (regions) are determined by the company’s choice of production process and the stage of the product life cycle the particular product is in. For example, a company (or business unit) in the upper left hand corner would probably produce a product where each job is unique and capacity is rarely used at 100%. A company (or business unit) in the lower right hand corner would most likely produce a product such as a commodity where the production process is continuous, capital intensive, and inflexible.

The natural flow of the matrix is a negatively sloped line from the top left corner to the bottom right. Although some companies may deviate slightly from the line, no company would produce a product in either the upper right or lower left corner, where the product would either be too specialized or the process too uneconomical. As a company moves farther from the diagonal, it becomes increasingly dissimilar from its competitors. In certain instances, this may prove to be an advantage. However, if the company cannot find a way to exploit the advantages of its particular niche, it becomes more vulnerable to attack from competitors.

Resources: Facility Layout