Link manufacturing process and product life cycles
Focusing on the process gives a new dimension to strategy
Robert H. Hayes and Steven C. Wheelwright
Although the product life cycle concept may have value for managers, its emphasis on marketing can make it inadequate for strategic planners. These authors point out that using a process life cycle can help a company choose among its various manufacturing and marketing options. Using the concept of a "product-process matrix," they show how a company's position reflects its weaknesses and strengths, and they discuss the implications for corporate strategy. Mr. Hayes is professor of business administration at the Harvard Business School. He is currently serving as faculty chairman of and teaching at Harvard's Senior Managers Program in Vevcy, Switzerland. One of his previous articles in HBR is "How Should You Organize Manufacturing?" (coauthor, Roger W. Schmenner, JanuaryFchruary 1978). Mr. Wheelwright is associate professor of business administration at the Harvard Business School. He is currently teaching in the MBA program and is faculty chairman of Harvard's executive program on Manufacturing in Corporate Strategy. One of his previous HBR articles is "Corporate Forecasting: Promise and Reality," [coauthor, Darral G. Clarke, NovemberDecember 1976).
The regularity of the growth cyeles of living organisms has always fascinated thoughtful observers and has invited a variety of attempts to apply the same principles—of a predictable sequence of rapid growth followed by maturation, decline, and death-to companies and selected industries. One such concept, known as the "product life cycle/' has been studied in a wide range of organizational settings.' However, there are sufficient opposing theories to raise the doubts of people like N.K. Dhalla and S. Yuspeh, who argued in these same pages a few years ago that businessmen should forget the product life cycle concept.Irrespective of whether the product life cycle pattern is a general rule or holds only for specific cases, it does provide a useful and provocative framework for thinking about the growth and development of a new product, a company, or an entire industry. One of the major shortcomings of this approach, however, is that it concentrates on the marketing implieations of the life cycle pattern. In so doing, it implies that other aspects of the business and industry environment move in concert with the market life cycle. While such a view may help one to think back on the kinds of ehanges that occur in different industries, an individual company will often find it too simplistic for use in its strategic planning. In fact, the concept may even be misleading in strategic planning. In this article we suggest that separating the product life cycle concept from a related but distinct phenomenon that we will call the "process life I TJie Product Life Cycle and Internationa! Trade. Louis T. Wells, |r., ed. ICambridge, Mass.; HarvaiiJ University Press, 1D71I, im example. proviJcs evidence from a number of industries that argues for broad application of this concept, 2. N.K. Dhalla and S. Yuspirh, "Forget the Priidutt Life Cycle Cnni;epU" HBR I3nuary-February 197(1, p. 101.
Harvard Business Review
cycle" facilitates the understanding of the strategic options available to a company, particularly with regard to its manufacturing function.
The product-process matrix
The process life cycle has heen attracting increasing attention from husiness managers and researchers over the past several years.^ Just as a product and market pass through a series of major stages, so does the production process used in the manufacture of that product. The process evolution typically hegins with a "fluid" process—one that is highly flexible, hut not very cost efficient—and proceeds toward increasing standardization, mechanization, and automation. This evolution culminates in a "systemic process"...