The following sections describe each of the architectures, highlighting their differentiating characteristics. Flow - no flow Flexibility - very high Products - unique Capital investment - very low Variable cost - very high Labor content and skill - very high Volume - one. In a project , the inputs are brought to the project location as they are needed; there is no flow in the process.
Technically, a project is not a process flow structure since there is no flow of product - the quantity produced usually is equal to one. It is worthwhile, however, to treat it as a process structure here since it represents one extreme of the spectrum. Projects are suitable for unique products that are different each time they are produced. The firm brings together the resources as needed, coordinating them using project management techniques. Flow - jumbled flow Flexibility - high Products - many Capital investment - low Variable cost - high Labor content and skill - high Volume - low. A job shop is a flexible operation that has several activities through which work can pass. In a job shop, it is not necessary for all activities to be performed on all products, and their sequence may be different for different products. To illustrate the concept of a job shop, consider the case of a machine shop.
In a machine shop, a variety of equipment such as drill presses, lathes, and milling machines is arranged in stations. Work is passed only to those machines required by it, and in the sequence required by it. This is a very flexible arrangement that can be used for wide variety of products. A job shop uses general purpose equipment and relies on the knowledge of workers to produce a wide variety of products. Volume is adjusted by adding or removing labor as needed. Job shops are low in efficiency but high in flexibility. Rather than selling specific products, a job shop often sells its capabilities. Flow - disconnected, with some dominant flows Flexibility - moderate Products - several Capital investment - moderate Variable cost - moderate Labor content and skill - moderate Volume - moderate. A batch process is similar to a job shop, except that the sequence of activities tends to be in a line and is less flexible. In a batch process, dominant flows can be identified. The activities, while in-line, are disconnected from one another. Products are produced in batches, for example, to fill specific customer orders. A batch process executes different production runs for different products. The disadvantage is the setup time required to change from one product to the other, but the advantage is that some flexibility in product mix can be achieved. Flow - connected line Flexibility - low Products - a few Capital investment - high Variable cost - low Labor content and skill - low Volume - high. Like a batch process, an assembly line processes work in fixed sequence. However, the assembly line connects the activities and paces them, for example, with a conveyor belt. A good example of an assembly line is an automobile plant. Flow - continuous Flexibility - very low Products - one Capital investment - very high Variable cost - very low Labor content and skill - very low, but with skilled overseers Volume - very high. Like the assembly line, a continuous flow process has a fixed pace and fixed sequence of activities. Rather than being processed in discrete steps, the product is processed in a continuous flow; its quantity tends to be measured in weight or volume.
The direct labor content and associated skill is low, but the skill level required to oversee the sophisticated equipment in the process may be high. Petroleum refineries and sugar processing facilities use a continuous flow process. The primary determinants of the optimal process are the product variety and volume. The amount of capital that the firm is willing or able to invest also may be an important determinant, and there often is a trade-off between fixed and variable cost. The choice of process may depend on the firm's marketing plans and business strategy for developing a competitive advantage. From a marketing standpoint, a job shop allows the firm to sell its capabilities, whereas flow-shop production emphasizes the product itself. From a competitive advantage perspective, a job shop helps a firm to follow a differentiation strategy, whereas a flow shop is suited for a low cost strategy. The process choice may depend on the stage of the product life cycle.
Wheelwright put forth a product-process matrix relating process selection to the product life cycle stage. For example, early in a product's life cycle, a job shop may be most appropriate structure to rapidly fill the early demand and adjust to changes in the design. When the product reaches maturity, the high volumes may justify an assembly line, and in the declining phase a batch process may be more appropriate as product volumes fall and a variety of spare parts is required.