Page 237 - Operations Strategy

212 CHAPTER 6 • PRoCEss TECHnology sTRATEgy

Figure 6.8 new developments in process technology can change the cost–
flexibility trade-off

Low volume High volume
Process High variety Low variety
(technology Many,
plus humans) small units Market requirements
Market requirements
Technology has high acuity of
is separated and judgement technology
High Cost Low
High

Coupling Connectivity Automation Analytical content Scale Scalability Flexibility

Low

Technology Process Few, large
is integrated (technology units of
plus humans) technology
has low acuity
and judgement

little flexibility. This made them suitable for high-volume, low-variety processes. If
process requirements were for high variety but low volume, process technology is
likely to consist of smaller separated units with relatively little automation.
● Trends in the development of each dimension of process technology, especially those
related to their increasing richness in information processing, are overcoming some
of the traditional trade-offs within each dimension. In particular, technology with
high levels of scalability can give the advantages of flexible, small-scale technology
and yet be quickly expanded if demand warranted it. Similarly, even high-volume
information processing technology can still display the relatively high analytical
content at one time reserved for more manual processes. Finally, technology with
high connectivity can integrate processes without the rigidity once associated with
high coupling.
● Market trends are themselves calling for simultaneously high performance in both
cost and flexibility. No longer is it acceptable to suffer high costs if flexibility is
demanded by the market, nor operations rigidity if costs need to be kept low. As far as
market requirements are concerned, the ideal area in the traditional product–process
matrix is one that delivers both low cost and high flexibility.
This is why information processing technology has had such an impact in so many
industries. In effect it has partially overcome some of the traditional trade-offs in
choosing process technology. But note the words ‘partially’ and ‘some’. There are still
trade-offs within technology choice, even if they are not as obvious as they were once.

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