Hayes and Wheelwright argue that it is profitable for firms

Hayes and Wheelwright argue that it is profitable for firms to operate along the diagonal of the product-process matrix. Justify the reason surrounding their argument. Can you think of situations wherein firms could move away from the diagonal and yet remain profitable?

Solution

No, It\'s not profitable for firms to operate along the diagnol of the product process matrix as there are a few reasons

This process matrix helps out to know the stratergies to deal, but not the real facts.

Firstly, diagnol product process matrix is designed to know the relationship between the product life cycle and technological life cycle. It is examined for the market manufacturing congruence issues and to facilitate the understanding of the stratergic options available to the company.

This Production management moves through different stages like markets and products with COST- EFFECTIVE Process. There are few process choices and process structures to be followed.

Process Choices:

1. Continous Flow & Job Shop: Here, Job shop is the producer of unique Products. (ie. If we can produce the exact output of the customers requirement )then there will be a continoud flow. For this job the people with skill and experince are needed, if once the product is released then we can assume the flow for the requirement. As the product released will be unique there will be continous flow is an assumption. If there is a requirement , recruting people with skill and experience is a bit difficult task as the wages paid to them will be high. Finally Job shop is for a small requirement basis

3. Batch: It is for higher volume of prroducts in repetition. If a product is failed then there are many chances to get lower. As the products required here are on repetative basis in a bulk it\'s not possible to deal with.

4. Assembly Line: Basing only the assembly line we can\'t say this process is profitable. It is possible only when th eproduct demand is high. If once the product demand is high then certainly the demand of the products gets down later . Even though continous manufaturing returns lot-loss of production where in the product flows continously rather than being divided. Only one process choice can\'t make it over to profitable state.

Getting skiled and experinced is a very difficult task. Even though people are skilled and experienced the quality assurance of the product may vary in many possible ways.

Process Structures:

1. Jumbled Flow

2. Disconnected Line Flow

3.Continous Flow

4. Connected Line Flow

Some other difficult tasks of matrix to be followed

1. Analysing the product entry and exit.

2. Determining the appropriate mix of manufacturing facilities, identifying the key manufacturing objectives for each plant, and monitoring progress on those objectives at the corporate level.

3.Reviewing investment decisions for plants and equipment in terms of their consistency with product and process plans.

4.Determining the direction and timing of major changes in a company\'s production processes.

5. Evaluating product and market opportunities in light of the company\'s manufacturing capabilities.

6.Selecting an appropriate process and product structure for entry into a new market.

Every time these stratergies are not useful to move into a profitable state. Based on the products and the person dealing with and the need of the customer (as they keep on changing time to time).

Customer is GOD a saying which is true. Customer is the one who changes (like requirement, need, product changes etc.).

Yes, there are situations wherin firms can move away from the diagnol and yet remain profitable when the strategy of the company is known and the process of dealing the product and the customer.