Page 236 - Operations Strategy

THE PRoduCT–PRoCEss mATRix 211

Figure 6.7 Market pressures are requiring operations to be both flexible and low cost

Competitive
pressure to
reduce costs
High

Traditional trade- The need to
o ‘diagonal’ overcome the
between cost traditional cost–
and flexibility flexibility trade-o
Flexibility and achieve high
levels of performance
in both

Market
Low fragmentation
making
flexibility
High Cost Low
more
valuable

fully embraced process technology, albeit in new IT-rich forms. Indeed it is increasingly
difficult to overstate the impact that information technology is having upon organi-
sational life. There is almost no sphere of operations where computing technology in
one form or another has not had a substantial impact.

Process technology trends
So, markets seem to be demanding both greater flexibility and lower costs simultane-
ously from process technology. To the traditional mind-set, which we illustrated in
Figure 6.6, this seems to be difficult, bordering on impossible. Yet, remember our dis-
cussions on trade-offs between performance objectives back in Chapter 2? There we saw
the development and improvement of operations (including process technology) as
being a process of overcoming trade-offs. Now we must include developments in infor-
mation technology, especially their effect of shifting traditional balances and trade-offs.
In effect, we have argued that emerging scalability, analytical content and connectivity
characteristics have enabled process technologies to enhance their flexibility while still
retaining reasonable efficiency and vice versa. In other words, these trends in process
technology are having the net effect of overcoming some of the traditional trade-offs
inherent within the dimensions of process technology. This has, for some industries,
changed the nature of the product–process matrix, which we discussed earlier. Figure 6.8
shows how three separate but connected ideas have come together.
● The three dimensions of process technology – scale, automation and coupling – are
related to the volume/variety characteristics of the market. In traditional process
technologies, especially those with relatively little IT element, large, automated and
tightly coupled technologies were capable of processing at low cost but had relatively

M06 Operations Strategy 62492.indd 211 02/03/2017 13:05