Refining the product-process matrix

We undertake an empirical study of the well-known product-process matrix using data collected from 128 plants. Our analysis indicates that the relationship between Product structure and Process structure is significant, but not strong. Furthermore, less than half of the plants operate near the diagonal of the matrix. We found that the off-diagonal plants are using innovative initiatives to overcome the lack of product structure and process structure match. As a result, we propose that a third dimension be added to the product-process matrix that measures how aggressively plants are implementing these innovative initiatives, thereby explaining their off-diagonal behavior.