Product Process Matrix

The product-process matrix, developed by Hayes and Wheelwright in 1979 was designed to show the trade-offs in operations and marketing by linking product plans and process choices. The model is based on traditional trade-offs evident in a single manufacturing facility environment. The product-process matrix has been empirically tested, but improvements in operations flexibility by applying advanced technologies have caused many to question the model's continued validity. In recent years, the environment has changed significantly, with manufacturing companies offering more product customization as they gain process flexibility. In addition, the model as originally developed, does not incorporate the supply chain perspective. New models are required that include the entire supply chain as well as the impact of developments in manufacturing.

The operations strategy literature discusses the importance of defining the appropriate production process to support the competitive priorities specified in the business strategy. Building on the works of Skinner (1969) and Abemathy and Townsend (1975), this hierarchical structure was further analyzed by Hayes and Wheelwright as they looked at the relationships between marketing and operations. They suggested that there should be a link between product plans and process choice that supports the overall business strategy (Hayes and Wheelwright, 1979). Furthermore, they contended that firms operating on or close to the diagonal of the product-process matrix will outperform those that hold significantly off-diagonal positions (see Figure 1). Much of the operations strategy literature since then has supported their assertions, and many operations management texts use the model to describe process choice in manufacturing.

More recently, research has been conducted to validate empirically whether firms actually link their process choice to product volume and customization and whether those decisions result in better performance.

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