This document discusses process technology and its dimensions. It describes three key dimensions - coupling, automation, and scale - that are used to characterize process technologies. Coupling refers to the degree of integration between process units, automation refers to the level of labor versus capital intensity, and scale refers to the number and size of process units. The document explains how an organization's process technology can be mapped on these dimensions and how their positioning along the dimensions impacts flexibility and cost. New technological developments can shift an organization to different parts of the cost-flexibility trade-off spectrum.

1. © Nigel Slack and Michael Lewis 2003
Quality
Performance
objectives
Dependability
Development
and
Organization
Speed
Flexibility
Cost
Resource Usage
MarketCompetitiveness
Decision areas
Issues covered in this chapter
Capacity Supply
Network
Process Technology
definition and
characteristics
Issues include:
• The impact of
process
technologies on
operations
• Understanding the
general
characteristics of
process
technologies over
time
• The effect of new
forms of technology
on performance
Slide 8.1

2. © Nigel Slack and Michael Lewis 2003
product
innovation
process
innovation
Rateofinnovat Rateofinnovation
Time Time Time
Generic product/process life cycle (assembled, non-
assembled products and services)
Rateofinnovation
(a) (b) (c)
Slide 8.2

3. © Nigel Slack and Michael Lewis 2003
Information
Indirect
process
technology
Infrastructural
services
Direct process
technology
Materials
Information
Customers
Products and
services
Direct and indirect process technology
Slide 8.3

4. © Nigel Slack and Michael Lewis 2003
SCALE
LOWHIGH
Many, small units of
process technology
Issues:
Lower capital costs
Demand matching
Failure redundancy
Upgrading easier
Fewer, larger units of
process technology
Issues:
Higher capital costs
Economies of scale
Vulnerable to failure
‘All or nothing’
change
Scale is usually an important
dimension of process technology
Many,
small units
Few, large
units
Slide 8.4

5. © Nigel Slack and Michael Lewis 2003
AUTOMATION
HIGH LOW
Labor Intensive
Issues include:
Higher direct costs
Control intensive
Human creativity
Capital Intensive
Issues include:
Lower direct costs
Design intensive
Maintenance costs
Automation is usually an important
dimension of process technology
Low acuity
and
judgement
High acuity
and
judgement
Slide 8.5

6. © Nigel Slack and Michael Lewis 2003
COUPLING
HIGH LOW
The degree of coupling between individual units is usually an
important dimension of process technology
Integrated
Rigid
Loose
Separated
Stand-alone
Issues include:
Lower capital costs
Fragmentation or
flexibility?
Control flexibility
System robustness
Integrated
Issues include:
Higher capital costs
Speed or rigidity?
Designed
synchronisation
System efficiency
Slide 8.6

7. © Nigel Slack and Michael Lewis 2003
The three dimensions of process technology are
often closely linked
COUPLING
HIGH LOW
Integrated
Rigid
Loose
Separated
AUTOMATION
HIGH LOW
Low acuity
and
judgment
High acuity
and
judgement
SCALE
HIGH LOW
Few,
large
units
Many,
small
units
Flexibility performance
Cost performance
Slide 8.7

8. © Nigel Slack and Michael Lewis 2003
The product-process matrix and the technology dimensions
Market requirements
Low volume
High variety
High volume
Low variety
High Cost Low
LowFlexibilityHigh
A
B
C
Off the diagonal
high flexibility
redundant capability
high costs
Off the diagonal
low flexibility
insufficient
capability
high costs
Coupling
Automation
Scale
Loose
Separated
High acuity
and
judgement
Many,
small
units
Integrated
Rigid
Low acuity
and
judgement
Few,
large,
units
Slide 8.8

9. © Nigel Slack and Michael Lewis 2003
Moving down the diagonal of the product-process
matrix in retail banking
[1] [2]
[3]
Increasingscale
Increasingautomation
Increasingcoupling
Low volume
High variety
High volume
Low variety
Low volume
High variety
High volume
Low variety
[2]
Slide 8.9
Individual
branches
Voucher
processing
centers

10. © Nigel Slack and Michael Lewis 2003
Low
Flexibility
High
High Low
Cost
Market
fragmentation
making flexibility
more valuable
Competitive
pressure to
reduce costs
Market pressures are requiring operations to be
both flexible and low cost
Slide 8.10

11. © Nigel Slack and Michael Lewis 2003
SCALABILITY
LOW HIGH
Issues:
Bespoke, legacy
systems
Specific expertise
required
Idiosyncratic processes
In-house
Issues:
Reliable architecture
Dispersed system
skills
Standard processes
Outsourced?
In some technologies scalability is as
important as scale
Slide 8.11

12. © Nigel Slack and Michael Lewis 2003
ANALYTICAL CONTENT
LOW HIGH
Low analytical
resource
Issues include….
Lower capital cost
Simple sequential
rules
Data input
predominates
Often single point
of connection
High analytical
resource
Issues include….
Higher capital cost
Parallel processing
Data manipulation
(expert systems,
artificial intelligence
(AI) etc.)
Complex connectivity
‘Analytical content’ is the equivalent of automation for
information-rich technologies
Slide 8.12

13. © Nigel Slack and Michael Lewis 2003
CONNECTIVITY
LOW HIGH
Low connectivity
Issues include:
Customized, legacy
systems (black-box)
Hard-wired
Restricted access
High connectivity
Issues include:
Platform independence
(HTML, Java etc.)
Bandwidth available
Reliable middleware
Security concerns
The degree of connectivity is the equivalent of
coupling in information-rich technologies
Slide 8.13

14. © Nigel Slack and Michael Lewis 2003
The effect of technology change on the three dimensions
COUPLING
Integrated
Rigid
Loose
Separated
AUTOMATIONLow acuity
and
judgment
High acuity
and
judgement
SCALEFew,
large
units
Many,
small
units
Flexibility performance
Cost performance
CONNECTIVITY
ANALYTICAL CONTENT
SCALABILITY
Some flexibility advantage retained
in spite of adoption of ‘efficient’
technology
Some cost advantage retained in spite of
adoption of technological flexibility
Slide 8.14

15. © Nigel Slack and Michael Lewis 2003
New developments in process technology can change
the cost-flexibility trade-off
Market requirements
Low volume
High variety
High volume
Low variety
High Cost Low
LowFlexibilityHigh
Coupling
Automation
Scale
Loose
Separated
High
acuity and
judgement
Many,
small
units
Integrated
Rigid
Low acuity
and
judgement
Few,
large,
units
Connectivity
Analyticalcontent
Scalability
Slide 8.15