Hayes-Wheelwright matrix
The matrix highlights the difficult trade-off between efficiency and flexibility of the operations with the upper-left modules favoring flexibility with high-cost productions and the lower-right modules favoring efficiency with the ability to spread their large fixed costs over a wider base, reducing cost per unit.
Distinctive competence is a characteristic or aspect of the company that gives it a comparative advantage over its competitors, usually categorized by cost/price, quality, flexibility and service/time.
[1] The wide range of skilled labor and use of general-purpose equipment allows upper-left processes to have distinctive competence in flexibility in their product/service provided, specifically in unique product designs.
[1] Upper-left processes excel in quality when it comes to unique designs based on the customers' specifications or if the product is considered artisan.
[1] Businesses that use the upper-left processes are likely able to charge higher prices because of their ability to cater to individual customers and to compensate for the skilled labor.
Hayes and Wheelwright illustrate this using a specialized manufacturer of printed circuit boards that produced customized products in low-volumes using an interrelated assembly-line process, placing the business in the undesirable lower-left corner of the matrix.
Knowing this, the company concluded its product lay in design capability rather than the circuit boards themselves, which placed them nearer along the diagonal.
[1] Another diagnostic use of the matrix is to organize individual operating units according to the suitable process choice while maintaining the overall coordination of the manufacturing procedure.
[1] The Hayes-Wheelwright matrix is a four-stage model; each stage is characterized by the management strategy implemented to exploit the manufacturing potential.
[3] The company's approach to manufacturing is reactive,[3] dealing with day-to-day problems like machine breakdowns, quality and delivery difficulties.
The management will emphasize increasing equipment and technological investments rather than improving infrastructure like planning and measurement systems and workforce policies.
Charter and mission statements are used to improve the company's competitive position by guiding manufacturing activities and decisions.
[4] Their internal process and product improvements will advance past industry standards, eventually leading the sector.
Each order requires varying structure, materials, form and possibly processing in accordance with the customer's design and specification, resulting in a jumbled flow with no repetitive pattern.
The larger volume and repetition of requirements allows management to take a more effective manufacturing route as they optimize capacity and significantly reduce costs.
Printing and machine shops that have contracts for higher volumes of products are examples of the batch process in manufacturing.
[1] Where the product has a consistent demand and large enough, the business can employ process referred to as mass-production such as the assembly line and continuous manufacturing.
Car washes, class registration in universities and many fast food operations are services that employ assembly lines.
The process is self-monitoring with a fixed and automated route, which limits labor requirements to monitoring and maintaining the machinery.
Industries that use this process include, gas, chemicals, electricity ores, rubber, petroleum, cement, paper, wood, and certain foods like milk, water, wheat, flour, sugar and spirits.
[1] Evolving management styles and technology are diminishing some of the inherent trade-offs found on the matrix, resulting in low predictive validity.
Koth and Orne (1989) propose the complexity of products and organizational characteristics like the extent of vertical integration, size and geographical scope of the operations should affect the appropriate process design.
Das and Narasimhan (2001) suggest advanced manufacturing technology for modular product structures can influence the contingency effect of the product variety and increase output and improve capabilities for job and batch shops in areas that were conventionally related with assembly lines and flow lines.
