Harvard Business School 9-682-008

August 1, 1981

Types of Processes
While every production process is unique in certain respects, a number of general categories
can be identified. In combination, these categories provide a useful way of thinking about production
systems, for they highlight differences of great interest to management. Different types of processes,
for example, often have very different operating characteristics, requiring different skills and
sensitivities. In some cases, labor relations and worker supervision will be critical, while in others,
capacity utilization and machine downtime will be more important. Recognition of these differences
is an important first step in insuring that an operating system performs effectively.

In this note, several different production processes will be identified and discussed. Included
among them are projects, job shops, batch processes, line flows, and continuous processes. The next
section of the note introduces each of these processes in turn, exploring their basic characteristics
while providing a number of examples.

The Major Process Types

While most production processes can be distinguished from one another on several
dimensions, two are of primary importance. These are the volume of product produced (both in total
and in batch size) and the tightness of connection or fit between the various parts of the operating
system. Together, these characteristics are often sufficient for distinguishing the major differences
between process types. Moreover, they are themselves complementary, and have important
implications for the competitive advantages and disadvantages of different operating systems.

Projects, for example, generally consist of a series of discrete steps designed to produce a
unique, one-of-a-kind item. A wide range of activities must be carefully coordinated, including
planning, design, purchasing, and production. The scheduling and sequencing of tasks therefore
becomes of primary importance, and network diagrams, like the one below, are often used to
highlight the interdependence among tasks.1 Here, the circles represent activities to be performed and
the arrows indicate the order of precedence of the different tasks. In this example, task 4 cannot begin
until tasks 2 and 3 have first been completed. Task 3, however, also requires the completion of task 2
before it can begin. Because of such complex interrelationships among activities, sophisticated

1 The process diagrams in this note are drawn from “A Note on Types of Processes,“ Harvard Business School
(Boston: Intercollegiate Case Clearinghouse 9-675-051).

This note was prepared by Assistant Professor David A. Garvin as the basis for class discussion rather than to illustrate
either effective or ineffective handling of an administrative situation.
Copyright © 1981 by the President and Fellows of Harvard College. To order copies or request permission to
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permission of Harvard Business School.

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planning techniques like the Critical Path Method (CPM), which distinguishes those tasks that must
be completed on time if a project is to be finished on schedule (i.e., those tasks that are on the “critical
path”) from those that contain some slack (and are off the path), have been devised to simplify the
resulting scheduling problem.

It is important to recognize that services as well as manufactured products qualify as projects,

as do certain special purpose activities undertaken within a firm. The launching of a new product’s
advertising campaign, for example, can be considered a project, as can a targeted research and
development program. Other examples of this type of production process include major construction
projects like dams or highways, customized products like racing cars or oceangoing vessels, and
highly engineered products like satellites or missiles.

Figure 1 A Project Network

1
6
3
5 8 End
Start 0
4

7
2

Compared to projects, job shops and batch processes typically involve a larger number of
products, with each produced in relatively small volumes. According to some estimates, more than 75
percent of U.S. production involves volumes of this size, too small for the efficient use of assembly
lines or other highly automated techniques.2 Products are often customized, and each may require
different tasks or follow different sequences through the production process. In a hospital emergency
room, for example, which is representative of a job shop, some patients will receive x-rays, others
blood transfusions, and still others surgical treatment, yet all will first be processed by a receiving
nurse. A schematic of this type of process appears in Figure 2, showing how different products
(patients) may follow different flow patterns. Here, Product A requires tasks 1, 2, and 3, Product B
tasks 4, 2, 5, and 6, and Product C tasks 7, 8, 1, 5 and 9. Because of these different sequences and the
varying amounts of time involved at each step, different loads are imposed on different pieces of
equipment, and work-in-process inventories may build up, occasionally appearing in different parts
of the system. Overall, labor content and worker skills are high, general purpose machinery is often
employed, and workers may be trained to operate several different pieces of equipment.

In general, batch processes are distinguished from job shops by their larger lot sizes, the
greater standardization of their products, and the greater commonality of the required tasks. Job
shops generally offer greater responsiveness to varying customer requirements, and are more often
found where prototypes or customization are involved. Both labor and equipment must therefore be
highly flexible and adaptable. Batch processes involve greater similarity among the units produced,
and require less flexibility to product variation. Their limited volumes per product, however,
preclude the efficient use of assembly lines.

Both services and manufactured products fall under these headings. Examples of job shops
include general purpose machine shops, automobile repair shops, manufacturers of specialty

2 “Those Smart Young Robots on the Production Line,” Fortune, December 17, 1979, p. 90.

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furniture, and custom dressmakers, while examples of batch processes include bookbinderies, the
manufacturers of complex electronic equipment, and musical instruments makers.

Figure 2 Job Shops and Batch Processes

Product A 1 2 3 Product A

Product B 4 5 6 Product B

Product C 7 8 9 Product C

Of all production systems, line flows and continuous processes typically produce products in the
largest volumes. Standardization becomes critical, and some products, like oil, chemicals, or paper,
are relatively undifferentiated bulk commodities. In many continuous processes, raw and in-process
materials are automatically transported throughout the plant, with little worker contact. Along the
way, the material is processed or chemically transformed—in furnaces, separators, mixers, and the
like—gradually attaining its final, saleable form. Often the only responsibility of workers in these
plants is the monitoring of dials and gauges controlling the process flow. Line flow processes are also
highly automated, although some of them, like fast-food restaurants, employ a more labor-intensive
process. In either case, tasks are defined narrowly and the division of labor is high. The production
process is broken down into relatively simple operations, with workers normally specializing in a
small number of tasks (except in those continuous processes where workers spend most of their time
monitoring equipment, in which case they may have rather broad responsibilities). Repetition and
simplicity are essential features of each activity. As Figure 3 indicates, the different stages of the
production process are tightly interconnected, with partially completed products often flowing
uninterruptedly from one step to the next. The same production sequence is normally followed by
most products.

In general, continuous processes are distinguished from line flows by their higher volumes,
the more limited differentiation of their products, their greater reliance on capital equipment, the
tighter connection between the various stages of their operating systems, and their more intensive use
of automated materials handling and transfer equipment. Among the products produced by line
flows are automobiles, pocket calculators, and ball point pens, and among those produced by
continuous processes are steel, chemicals, and paper.

Figure 3 Line Flows and Continuous Processes

raw raw
materials materials

0 1 2 3 4 5

The Match Between Product and Process

One implication of the preceding discussion is that different production processes possess
characteristics that make them more or less suitable for different competitive environments. No single
process is likely to be appropriate in all circumstances. A continuous process, for example, because of

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its lack of flexibility, is unlikely to be especially effective in a market where customized, low volume
products are the norm, just as a job shop is unlikely to be the best way to produce a commodity item.

This suggests that product and process characteristics are often complementary, with
processes chosen to match the key features of the markets that they serve. Different processes do
different things well, and should be chosen accordingly. Projects and job shops, for example, would
be most appropriate where low volume, relatively expensive products predominated and buyers
were more concerned with performance and quality than with price. These production processes,
after all, are often extremely time-consuming, and typically require highly skilled labor. Line flows
and continuous processes, on the other hand, would be better suited to markets where standardized,
high volume production was the norm and buyers were especially price sensitive. The advantage of
these systems lies in their ability to employ capital-intensive techniques to produce similar products
relatively cheaply. Batch processes would fall somewhere between these two extremes, being suitable
for volumes less than those typical of line flows and greater than those typical of job shops, while still
allowing for some standardization of the product.

An example may be helpful here. Consider how various types of automobiles are
manufactured. While we typically think of automobile assembly as a line flow process—Henry Ford
being the father of the modern assembly line—mass production techniques are not always
appropriate. A racing car for the Indianapolis 500 or a special order Rolls Royce is unlikely to be
assembled by this means. Their low product volumes, attention to quality and performance, and
buyers’ insensitivity to price all argue in favor of other methods. Project techniques would probably
be most appropriate for constructing the racing car, while a job shop or batch process would best
serve the needs of Rolls-Royce assembly. More automated processes, designed for standardized
chasses and bodies, provide little flexibility and would be inappropriate here. The usual advantage of
such capital-intensive techniques—their ability to produce large product volumes at comparatively
low cost—does not match the demands of the racing car or Rolls-Royce markets.

At the other extreme, a “world car” is now in the offing, with the same basic automobile
being sold in a number of different countries. Efforts to tap these global markets have led to further
standardization of automobile and engine designs. In these circumstances, continuous processes
become increasingly desirable, for greater standardization implies higher volumes, fewer
changeovers, and a reduced need for flexibility. Cost reduction becomes critical, putting a premium
on capital-intensive techniques. Nissan, for example, a major Japanese automaker, has pursued this
goal by using industrial robots to assemble automobiles, a degree of automation now considered
desirable because of the changed nature of the product and the market.

The Spectrum of Processes

While efforts have been made to carefully distinguish the major process types and to present
relevant examples, these categories remain little more than generalizations. Attempts to establish a
one-to-one correspondence between each process type and actual production processes are likely to
be extremely difficult, for the fit between the two will never be perfect. Moreover, actual production
processes often contain elements of several major process types.

Consider, for example, a company that manufactures plastic toys. Three major operations are
involved. First, plastic is extruded in a more or less continuous process, with the basic parts created
by molding techniques. Second, the parts are further shaped by highly skilled craftsmen. General
purpose machinery is employed, and this stage of the process corresponds closely to a job shop.
Finally, the parts are assembled into a small number of standardized items on a moving assembly
line.

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Clearly, this system contains elements of several different processes and cannot be fit into any
one of the major process types. Even those processes that are more uniform are difficult to classify, for
it is seldom easy to distinguish job shops from batch processes or line flows from processes that are
more continuous. As a result, it is preferable to view production processes as being arrayed along a
spectrum, with the different process types blending into one another without sharp divisions between
them. As Figure 4 illustrates, projects fall at one extreme of this spectrum, continuous processes at the
other, and job shops, batch processes, and line flows in-between. Where several types of processes are
combined, as in the toymaker example, each stage of the operation will fall at a different point on the
process spectrum.

Figure 4 The Process Spectrum

Continuous
Projects Job Shops Batch Processes Line Flows Processes

The value of this formulation lies in the fact that process characteristics will change in a
reasonably uniform fashion as one moves along the spectrum. Labor, materials, planning and control,
management tasks, and other features of the operating system can then be analyzed from this
perspective. Each will be assessed in turn.

Labor

As one moves along the spectrum from projects to continuous processes:

• Labor content per dollar value of the product decreases.

• The required labor skills fall. Craft skills are often required by projects or job
shops, while line flows, because of their increased division of labor, involve
simpler and more repetitive tasks. For many continuous processes, however,
higher skill levels are required because of the “art” and judgment involved in
monitoring or controlling the process. In the extreme case of a fully automated
continuous process, no direct labor would be involved.

• Training times fall, although continuous processes may again be an exception to

the general pattern.

• The degree of worker discretion (e.g., control over the pace of the process)
declines.

• Payment systems tend to shift from piece rates to hourly wages, and occasionally,
to weekly or monthly salaries.

Materials

As one moves along the spectrum from projects to continuous processes:

• Materials (input) requirements are known with greater certainty.

• Supplier ties are more formal and are of longer duration.

• A higher degree of vertical integration (i.e., ownership of suppliers) is observed.

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• Raw materials inventories increase in size. For line flows and continuous process,
however, steady purchases can reduce the size of inventories on hand at any
given time.

• Work-in-process inventories decrease in size.

• Finished goods inventories are larger.

Planning and Control

As one moves along the spectrum from projects to continuous processes:

• Long-term sales forecasts become increasingly important for planning purposes.

• High capacity utilization becomes more important.

• Scheduling becomes less complex because of the limited variation in job

sequences and tasks.

• Quality control becomes more formal.

• Information flows and coordination between workers and management become

less important, simplifying the monitoring of production flows.

Management Tasks

As one moves along the spectrum from projects to continuous processes:

• Staff needs (for quality control, capacity planning, new product development,
etc.) become more important relative to line supervision.

• Long-term issues such as capacity planning, facilities location, technological

change, and long-range forecasting become more important relative to day-to-
day operating considerations.

The Choice of Production Techniques

It is important to recognize that the particular production processes employed by firms do

not simply reflect the limits imposed by technology. As our discussion of the automobile industry
makes clear, managers have considerable discretion in choosing among production techniques, for
the same product can usually be produced in a number of different ways. The choice among these
alternatives has an important bearing on the likely success or failure of a firm, and on the tasks
required of management to compete effectively.

A production process had been well-chosen if it matches the firm’s strategy, the demands of
the market, and the features of the external environment in which the firm finds itself. Those
processes using relatively more labor, for example, are likely to be more appropriate where labor is
relatively abundant, while those processes using relatively more capital are likely to enjoy an
advantage where labor is comparatively costly. Similarly, continuous processes are likely to be better-

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suited to standardized, commodity items, while job shops are preferable for firms specializing in
customized products.

In choosing among production processes, managers must develop a detailed understanding

of the available alternatives. Four characteristics are especially important:3

1. What each alternative will cost (both originally and over the lifetime of the
equipment).

2. What each alternative will do (in terms of volume of output, quality of output,
and responsiveness to changed product requirements).

3. What each alternative requires (in terms of raw materials, energy, and other
inputs).

4. The degree of certainty of the above information (including both short and long
run uncertainties).

An analysis based on these four criteria can be quite complex. For example, production
processes differ not only in their installation costs but also in their maintenance and repair
requirements. Retooling may sometimes be necessary. These costs must be considered when
reviewing alternative production processes, for otherwise, accurate comparisons cannot be made.
Similarly, some processes are better than others at producing high quality output, tailored to tight
specifications. In some markets this is a critical consideration, while in others, it is relatively
unimportant. Once again, the determination must be made before choosing a production process.
Finally, both the necessary labor skills and management know-how differ among processes, in
addition to obvious differences in raw materials requirements. These, too, be assessed if a company is
to settle on a process that can be employed effectively.

Having selected a particular production process, managers must then identify the key
management tasks. These tasks depend critically on the general characteristics of the production
process. For those processes closest to job shops, identifying and breaking bottlenecks, scheduling and
loading the plant, and keeping quality at high levels are important skills required of management. For
line flows or continuous processes, meeting materials requirements, keeping capacity utilization high,
and planning future facilities are key management tasks. Clearly, in order to succeed management
must be sensitive to the peculiar demands of the operating system, for that determines many of their
subsequent responsibilities.

3 Technology and the Manager, Harvard Business School (Boston: Intercollegiate Case Clearinghouse 6-671-060,
1979), p. 4.