CONSUMER BUYING MOTIVESThe modern concept of marketing considers the customer as the king or prime as satisfaction and delight of customer is the ‘mission of a business. is the customer who shapes the production and ma4eting policies of the rm. A marketer should understand this fact if he is to beuccess  in this mission. He must have sufficient knowledge about the customers to whom he s going to sell. He must try to understand the nature of customers, their this and their buying motives if he is to win permanent customers.A buying motive induces a buyer to buy a product. It is an influence or consideration which provides an impulse to buy. There is a buying motive  hind every purchase. It may not be the same with every buyer One buyer away purchase a product to satisfy his one need and another may purchase a product to satisfy an altogether different nerd. Therefore, it is necessary for áe marketer to identify the buying motives of different kinds of customers. Fr this he must study the psychology of the customer and design his market--mix accordingly. Maslow’s need hierarchy which explains buyer’s motives as been discussed later in this chapter.types of Buying Motives,There are three considerations which make a person purchase a product:& He has a desire which needs to be satisfied ; (ii) He has an urge which Nueces him to purchase ; and (iii) He has a reasoning.Broadly speaking, individuals are motivated to buy by internal and renal forces as under:Internal motives often originate in the minds of the people and are both typical and psychological in nature. They are broadly classified into two rational which are based on logical reasoning or thinking and amoral , which are based on personal feelings.External motives are outside oneself. Since a consumer is the product iiss environment, his buying motives are influenced by the external factors. us factors like income, occupation, religion, culture, family and social ‘environment act as motivators.Buying motives. may also be classified on the basis of product and patronage.1. Product Motives. These explain why people buy certain products. motives result directly from the needs of customers. Product motives be of two kinds:(A) Primary buying motives relate to the reasons why consumers buy one foods rather than another Such motives result directly from the needs and wants, and include the d 3ire to achieve recognition, physical well- preservation of self-image, relaxation, beauty, knowledge, money gain. The seller must discover the customer’s primary motives (for they are unaware of these) and then direct has appeal as effectively as possible.(b) Selective buying motives relate to causes that induce a consumer€ purchase certain class of quality goods. Selection is based on such motives the desire for both economy and convenience. Some of the most comselective buying motives include desire for convenience, versatility, econ dependability and durability.2. Patronage Motives. These cause a customer to buy products for. particular manufacturer or retailer. Important patronage motives are the. concerned with fashion, exclusiveness, dependable after-sales service, vengeance of location, quality, price,

reliability of the seller, punctuality delivery, variety of selection, etc. When a person decides to buy a particular product or patronize particular retailer, he may be guided by rational or emotional motives as cussed below.

Rational Motives (Economic Considerations)These motives are based on a man’s reasoning, logic and ability consideration of economic consequences. They include the immediacy monetary cost, and long-range cost effecting the buyer such as economy durability, depreciation, efficiency, degree of labor needed, dependability and ultimate benefits achieved.Emotional Motives (Psychological Considerations)Emotional buying motives are based on personal feelings and cover a we range of motives including impulses, instincts, habits and drives, etc. The motives include pleasure, comfort, status, pride, ambition, economic e social achievement, selection of gifts, maintaining and preserving heath satisfaction of appetite, proficiency, romantic instinct, social accepted recreation and relaxation, etc. Emotional motives are found more among people of high income group TV, Air Conditioner, Refrigerator, Washing Machine,. Geyser, Car, etc. a generally bought to satisfy emotional motives.

Consumer Behavior

“The fact of buying changes the dynamics of the relationship. The will never views the sale as a favor conferred on the seller and, in effect, bits the seller’s account. A healthy relationship requires a conies and constant fight against the forces of decline. One of the west signs of a bad relationship is the absence of complaints. The stomper is either not being candid or not being contacted. Probably both.—Theodore Levitt

INRODUCTIONThe modern marketing concept makes. customer at the centre-stage of sanitation efforts; The focus, within the marketing concept to reach the -et customer, sets the ball rolling for analyzing each of the conditions of the -t market. The first being to find out interest of such persons as would :‘-t me prospective customers. Then comes the. willingness of such interested :.ones to buy the offered product. But since customer needs come first and the organization offers the product, as imperative of the marketing pt, customer’s willingness to buy cannot be studied in isolation of the nearest of such prospects to satisfy a basic need from different satisfiers. Consumers’ needs recognition, their involvement level, the available alternate decision to buy and post-purchase behavior, all are part of the consumer behavior. Every consumer is unique and this uniqueness infest in search, purchasing, consuming, reacting, etc. Thus, consumer behavior must be properly understood by marketers.

Factors that influences on business buyers.

(1)Economic developments: Purchasing of materials depend upon the country�s economic conditions. If the economy is growing rapidly usually the consumption also grows proportionately then company should source materials accordingly

(2)Supply conditions:Raw materials required should be matched with the demand condition of the company. If there is an irregular or seasonal demand exists then company should adjust their supplies. Any shortage of the raw materials will force the company to go out of the company.

(3)Political and Legal environment: Any change in the government policy will have direct or indirect impact on the company. For example, An engineering firm work towards better environment standards in their products assuming that all automobile companies adhere to the international regulations but the government decided to post pone the regulation standard implementation for 12 years the entire material manufactured and raw materials will have extra holding and inventory costs.

(4)Competitive environment:Business buying is very complex. Any technology change adopted by the competitor should be carefully observed. If the company not able to identify the competitors move survival will become difficult.

(5)Culture and customs:Every country has its own culture and customs. As we discussed in the previous unit, why one should not sell beef products in India, in same

way business buying is also influenced by the culture and customs. For example, most of the products produced in Japan are of small size to suit their customers. Any company buying products in Japan should always keep these things in mind.

(6)Organizational objectives:Purchasing objectives are derived from the organization objectives. For example, an organization objective is to reduce the overall cost of 20%. Its purchasing objectives take this as benchmark and try to reduce the cost by 20%.

(7)Organizational policies and procedures: Companies� policies like centralization versus decentralization of buying and selling will have direct impact on the company�s production.

(8)Organization structure and systems:Lesser the hierarchy more will be the flexibility in the organization. Companies with more number of hierarchies will have plenty of problems to be addressed.

(9)Interpersonal factors:Business buying will have different outcome on the basis of authority, status, empathy and persuasiveness that customer and organization posses. Individual factors. Age, education, job position, Personality risk attitudes of individual will determine the buying behavior of each role and in turn these changes will have direct impact on the organization buying.

Marketing Strategy for New Industry Products

Pioneer in a Product - Issues

When a product is new in the industry life cycle, the firm starting the production and sale is the pioneer. Normally the growth is slow in the introduction of phase of a new industry product as the technical problems with the product are to corrected, production capacities have to be built up based on market acceptance and growth, distribution capacity is to be built up from scratch when distributors have no familiarity with the product, and customer may have reluctance to change his old behavior. If the product is an expensive high technology one, only small number of buyers can afford it.

Companies have choice to be a pioneer or a follower. A pioneer has to initiate every thing connected with the product. A follower has the benefit using various firms that helped the pioneer for his venture. Also he has the opportunity of studying the pioneer’s product and market response to it. He can examine the distribution channels used by the pioneer and gauge their effectiveness and he can evaluate various marketing strategies employed by the pioneer. Thus an early follower has some extra knowledge about the product and the market.

Is there any Advantage to the

 Pioneer?

Some studies indicate that the market pioneer if it can capture the leadership position gains the most advantages. Some studies dispute the finding that pioneers have sustained their leadership.  Robertson and Gatignon give the opinion that an alert pioneer-leader can pursue various strategies to prevent later market entrants from wresting away leadership. Being a pioneer has an advantage that can be capitalized. The pioneer has to dynamically compete in the market place to exploit his pioneering advantage. He needs to have a grand plan for life-cycle of marketing of the product and launch strategy has to be the first step in that grand plan.

The pioneer may start from a specific product-market segment his launch but must have plans to cover the larger part of the market over a period of time by launching appropriate product variations and covering more market segments.

The competitive Cycle – The Pioneer’s Challenge

Initially, the pioneer is the sole supplier with 100% production capacity and market share.

In the second stage, there is competitive penetration as competitors build capacities and enter market.

In the growth phase, capacity tends to be overbuilt and any cyclical downtrends will impact margins for all. After some time share stability may happen.

Then a commodity competition stage will come where returns are average.

The final stage will be a decline for the industry and firms withdraw from the industry. The pioneer needs to steer through all the stages of the industry life cycle.

Pricing and Promotion Strategies for

Pioneers

Pioneer has the alternative of Skimming pricing or Penetration pricing.

Skimming is entering the market layer by layer in the order of value exchange. Initially buyers who are willing to pay a high price are serviced. This strategy is feasible if market is unaware of the product and special efforts are to be done by firms to make the potential buyers aware of the product.

Pioneer will do rapid skimming if the potential competition is imminent. In this strategy he will spend substantial amount on promotion to enlarge the sale quickly. If the potential competition is not imminent, the pioneer can undertake slow skimming. He can expand sales slowly by limiting promotion expenditure.

Penetration is entering a large market with a lower price. It is done for price sensitive products. Rapid penetration is preferred when the market is unaware of the product. The pioneer spends a good deal on launch and advertising. A slow penetration approach is used when market is aware of the product, but potential competition is limited.

Thus price and promotion are the two alternative dimensions which the pioneer has use in his strategy.

ndustrial Marketing Strategy

Developing A Strategy For Success

Having an effective industrial marketing strategy is difficult for most manufacturing firms. You’re

busy enough as it is to have to worry about the strategies you’re employing for internet marketing.

You’re busy spending your day taking and filling orders and ensuring the quality of your

manufacturing product or service. And yet a good industrial marketing strategy is vital to maintain

the health of your company. Internet Marketing is as important for an industrial firm as it is for a

company that target consumers. Whether it’s consumer traffic, or business to business, people are

searching for the products you sell on the internet. The only question is whether you are allowing

them to find you.

Industrial Marketing Strategy: Leveraging the Power of the Internet

The internet is the most powerful tool for consumers ever created. It is also the most powerful

advertising medium ever invented. Failure to take advantage of it is the biggest mistake your

manufacturing firm can make. The internet should be the center of any manufacturing marketing

strategy. It’s not only the most effective form of marketing. It’s low cost and requires very little effort

from you or your overworked staff.

Industrial Marketing Strategies: Targeting the Right Clients

One the biggest advantages of online marketing is the volume of marketing research data. Before

we target a specific market, we so exhaustive research to discover not only the sheer number of

people searching for the industrial or manufacturing products or services you sell, but the likelihood

of those people to actually purchase them. We use data gathered from billions of searches

performed on search engines to discover what search phrases these people use to find

products/services you sell. Once we find your firm’s most responsive customer and the terms they

use to search, we craft your web site around the goal of attracting these customers to your site, and

once there, convincing them to contact you.

Industrial Marketing Strategy: Sticking to The Plan

The secret of success for industrial internet marketing comes down to three things: Research,

Focus, and Consistency of Message. These should be the focus of any industrial marketing strategy

because doing these three things well will likely make you the online authority in your company’s

industry. The first step in the strategy is to convince the search engines that your web site is the best

place on the internet for information. Second, convince the online visitors that the search engines

send you that you’re the best company to provide that particular product or service to them. The job,

in essence, is the same, since search engines are constantly evolving into better mirroring the

behavior of humans. So the focus should be on attracting customers at the same time as attracting

search engines.

Of course there are some tricks to the trade you need to follow.

And that’s where we come in. Just because you know how to create or service industrial products

doesn’t mean you know how to successfully market them online. The key to the entire strategy is to

get noticed by the search engines. And without specific in-depth knowledge of search engine

optimization techniques, the whole plan falls apart. The truth is: no search engine ranking equals no

traffic. And no traffic equals no online sales. We are experts in all phases of internet marketing and

can implement an industrial marketing strategy that works to improve your firm’s bottom line.

Industrial Marketing Advisers: Your Strategic Guide To Greater Sales

We’ve helped many firms dramatically expand their sales in a variety of industrial and manufacturing

industries. Our industrial marketing strategies have helped firms reach the top positions on search

engines for their industry. And we can help your manufacturing product or service firm do the same.

Fill out the form at the top of the page to get a free no-obligation consultation of what the potential is

for your firm’s particular niche and how much it will cost to become an online authority in your

particular industry.

Industrial marketing (or business to business marketing) is the marketing of goods and services by

one business to another. Industrial goods are those an industry uses to produce an end product from one

or more raw materials.

buying techniques

techniques, tips and rules for professional buyers, purchasing and supplies management - a strategic approach to buying

Effective purchasing management and professional buying works better when a good strategic framework exists. Commonly, relationships between suppliers and customers are driven by personalities, or the needs of the moment, whereas relationships and purchasing strategy should ideally be based on a combination of factors reflecting the nature of each purchasing area, including: risk, complexity, value, the market and basic matters of supply and

demand. This simple article explains some of the principles, techniques and guidelines for buying, and is provided by Christopher Barrat, a writer on the subject of professional buying, whose contribution is gratefully acknowledged.

Bear in mind also that when buying anything you should be aware of the principles and techniques ofeffective negotiation. It is likely that the person selling to you will be using them, so even if you do not wish to adopt the approach and methods concerned, it's as well that you be able to recognise the tactics.

 

 

1. check you know where your purchase is positioned

Every buyer wants the maximum choice of compliant suppliers. This is a rare occurrence. Buying is often involved late, given specifications that are too tight, or not enough information to allow flexibility. The classic 'power matrix' always helps to assess how to engage suppliers:

buying relationships matrix

 low item value, product

complexity, buyer strength

high item value, product complexity, buyer strength

highmarket

complexity, risk, supplier strength

Critical yet infrequentcontract negotiations, which is the challenge. 

Can be difficult to attract and maintain priority and attention from suppliers, so buyers need to find ways to maximise theappeal and interest for the supplier. 

Develop and maintain strategic alliances or partnerships with sustainable high-quality strategic suppliers. 

Ongoing collaboration and review are essential.

Relationships are likely to be more important than contracts.

Buyers therefore need to becreative, pragmatic and adaptable, so as to find ways of increasing the appeal and priority for the supplier.

The likelihood is that contractswill be more important than relationships, due to the difficulty in sustaining senior level interest from the supplier.

Multiple relationships between buyer and seller organizations are likely to be very beneficial, and should be encouraged and enabled between as many counterpart levels and functions as necessary to attain mutual understanding of operational issues and implications for both sides.

Investment in 'coaching' suppliers to improve their strategic partnering capabilities can be worthwhile.

lowmarket

complexity, risk, supplier strength

Often involves 'commoditised' products and services. 

Generally try to automate arrangements and processes, so as to reduce transaction costs, variability and amount of time and effort required to maintain supply and renegotiations.

Buyers have extensive choice because of the number of suppliers available and the competition between them.

Buyers can exercise volume leverage to get the best deals. 

More aggressive buying tactics are acceptable and you should swap between the many undifferentiated yet adequate suppliers.

Establish efficient processes. Minimise time and activity for both sides.

 

The important step is to remember that even if you have little information, it doesn't actually effect where the real market pressures are. In other words let the market decide their position, not your lack of knowledge.

 

 

2. get involved with your sales people

Buying is a critical function. Despite this for many years it has been regarded somewhat as a second class citizen in the commercial rankings. If, as a buyer, you can get involved with your own sales people this will make a difference. Firstly you could consider running training courses for them. Secondly see if they can get you to one of their key customers to talk to their buyers - it establishes good relations and can facilitate product development.

 

 

3. segment your staff

Buying covers a very wide spectrum. Strategic sourcing at one end, and invoice entering at the other. This is a broad skill set, and not all buyers can do both. If you want to develop your buyers skills then start by really checking who is capable, and or willing. Some of your best staff may not actually want to be developed into strategic relationship managers. If you need to sell your department better internally - then pick your best presenter to do this, not simply the buyer who deals with that group.

 

 

4. repetition is the key to supplier measurement

There are probably more supplier measurement processes than there are suppliers. Everyone is constantly inventing and re-inventing some set of magic criteria that will measure supplier performance, and now of course the trend is to make it all 'e-capable' and self managing. Don't get tempted down this path. All of the processes do basically the same thing - ie., get a series of aspects of supply and give you some sort of rating on a scale between 'hero' and 'plonker'. The key to success is to stick with the same simple measure - and do it over time. It is by definition going to be a relative movement that you want to see, not an absolute one. Only if you repeat the same process time and time again is this possible.

 

 

5. supplier rationalization - an ends or a means?

Any self respecting buyer has gone through some sort of supplier rationalization programme. It probably makes up one of your objectives and probably has a firm number - eg 'reduce supplier base to 300 suppliers'. Beware these sorts of targets - why 300? Why not 307 or 289? The issues is that this target loses sight of the reason for reduction - ie., you want to simplify processes, increase supplier dependency and therefore reduce costs. However everyone also knows that if you reduce too far you become locked into certain suppliers and prices can rise. What is more if you are going to go down an 'e-auction' route your first step may well be to increase the amount of suppliers. Rather than set an arbitrary number for suppliers, focus on the outcome - reducing costs - and see if this one particular tool is useful or not.

 

 

6. price versus cost - understanding and calculating actual total cost

Price is different from cost. The terms are often interchanged in business, which can lead to confusion in negotiations, and wrong

decisions based on 'false economy'. The key rule is that 'price' is only one of the elements that makes up 'cost'. There are many other factors to consider and factor into the overall value judgement, and whether one proposition or supply arrangement is truly better than another.

actual total cost

price = basic cost of product or service £/$

value = cost of quality (including maintenance, disposal, and costs relating to environmental and corporate social responsibility factors)

£/$

transaction = cost of acquisition (including buying resources, effort, time, payment terms, change management, training related to implementation)

£/$

actual total cost £/$

See the Actual Total Cost diagram in MSPowerpoint or as an Acrobat pdf.

The price is the label on the packet, or the basic price of the product or service, but it is no indication of true value or cost. For example, a chair has a price tag on it of £10 or $20. The value however, is related to useable benefits that the chair gives, and the cost implications of using it for its intended purpose. It may be a very cheaply-made chair, in which case if its role is just to last one season in a rented holiday flat and then be thrown away, then that is fine. If however the chair is required for visitors in the reception of high quality business, then its style, comfort and durability are important required features, and therefore form a real part of its value (or not as the case may be). So in this instance a chair is likely to warrant a relatively high 'price' in order to provide the necessary value and benefits, which ultimately produce a significantly lower 'actual total cost' than paying a low price for an inferior product which fails to perform, endure, give a suitable impression, etc. The CEO of a potential $20m client who sits in a $20 reception chair

might decide after all that he doesn't want to place his business with a company who put such a low value on its visitors. What's the actual total cost of the $20 chair then?...

NB the term 'added value' is used a lot in business today. Often it is just a smokescreen for a price increase so be aware. To really add value any feature should have some real and tangible effect on the longer term use/replacement value/cost of transaction/reputation for the buyer's business. When confronted with claims of added value, ask, 'exactly what is the the added value?' By the same token, if you use the term 'added value' when selling to a buyer, make sure you can demonstrate it.

The cost of the transaction is what it actually costs your organization to do the deal (and also to review it and renegotiate it in months and years to come). Costs of transaction are regularly overlooked - by buyers and sellers alike, and everyone else who thinks that selling and buying are all about price. For example professional buyers often receive suggestions from users or staff who say they can buy cheaper copier paper from their local discount store. They ignore the cost of the transaction - that to purchase the cheaper paper from a local store involves someone spending time to go there, with cost of travel, the time to complete and fulfil an expense claim - all of which mean the cost of the transaction far outweighs any initially apparent 'price' savings.

Consider also the cost of change, implementation and training. These are also costs of the transaction, and can be enormous - in some cases greater than the basic price of the product or service. IT hardware and software are notable examples where the costs of executing the transaction through to implementation can produce frightening implications for costs, and also for process integrity and continuity.

An increasingly relevant factor is 'total cost of ownership' (TOC or TCO). Total cost of ownership includes all of the factors above, but will also consider costs of disposal, and increasingly for all industries, the cost of reputation - for example the effect that sourcing low priced third-world goods can have on an organization's reputation - notably its reputation for Corporate Social Responsibility (CSR).

In summary, whether buying or selling, price is only a part of the actual total cost. Costs of quality including maintenance, disposal, CSR (corporate social responsibility) and environmental factors, and costs of the transaction including buying resources, effort, time, payment terms, and renegotiations (all largely dictated by the seller’s relationship capabilities) must all be be considered when assessing or comparing the actual total costs of propositions, products or services

Job shopFrom Wikipedia, the free encyclopedia

In the United Kingdom, "job shop" can also be a colloquialism for a Job Centre.

Job shops are typically small manufacturing systems that handle job production, that is, custom/bespoke or

semi-custom/bespoke manufacturing processes such as small to medium-size customer orders or batch jobs.

Job shops typically move on to different jobs (possibly with different customers) when each job is completed. In

job shops machines are aggregated in shops by the nature of skillsand technological processes involved, each

shop therefore may contain different machines, which gives this production system processing flexibility, since

jobs are not necessarily constrained to a single machine. In computer science the problem of job shop

scheduling is considered strongly NP-hard.

In a job shop product flow is twisted, also notice that in this drawing each shop contains a single machine.

A typical example would be a machine shop, which may make parts for local industrial machinery, farm

machinery and implements, boats and ships, or even batches of specialized components for the aircraft

industry. Other types of common job shops aregrinding, honing, jig-boring, gear manufacturing,

and fabrication shops.

The opposite would be continuous flow manufactures such as textile, steel,food manufacturing and manual

labor.

Advantages[edit]

High production mix flexibility

High flexibility in product engineering

High expansion flexibility (machines are easily added or substituted)

High production volume elasticity (due to small increments to productive capacity)

Low obsolescence (machines are typically multipurpose)

High robustness to machine failures

Compare to transfer line

Disadvantages[edit]

Very hard scheduling due to high product variability and twisted production flow

Low capacity utilization

PROCESS MANAGEMENT

Companies begin the process of organizing operations by setting competitive priorities. That is they must determine which of the following eight priorities are to be emphasized as competitive advantages:

1. Low-cost operations 2. High performance design

3. Consistent quality 4. Fast delivery time

5. On-time delivery 6. Development speed

7. Product customization 8. Volume flexibility

Although all eight are obviously desirable, it is usually not possible for an operation to perform significantly better than the competition in more than one or two.

The five key decisions in process management are:

I. Process Choice

II. Vertical IntegrationIII. Resource FlexibilityIV. Customer InvolvementV. Capital Intensity

These decisions are critical to the success of any organization and must be based on determining the best was to support the competitive priorities of the enterprise.

PROCESS CHOICE

The first choice typically faced in process management is that of process choice. Manufacturing and service operations can be characterized as one of the following:

1. Project2. Job Shop3. Batch Flow4. Line Flow5. Continuous Flow

The nature of these processes are discussed below and summarized in the manufacturing product-process matrix on page 8.

Project Process. Examples of a project process are building a shopping center, planning a major event, running a political campaign, putting together a comprehensive training program, constructing a new hospital, doing management consulting work, or developing a new technology or product. A project process is characterized by a high degree of job customization, the large scope of each project, and the release of substantial resources, once a project is completed. A project process lies at the high-customization, low-volume end of the process-choice continuum. The sequence of operations and the process involved in each one are unique to each project, creating one-of-a-kind products or services made specifically to customer order. Although some projects may look similar, each is unique. Firms with project processes sell themselves on the basis of their capabilities rather than on specific products or services. Projects tend to be complex, take a long time, and be large. Many interrelated tasks must be completed, requiring close coordination. Resources needed for a project are assembled and then released for further use after the project is finished. Projects typically make heavy use of certain skills and resources at particular stages and then have little use for them the rest of the time. A project process is based on a flexible flow strategy, with work flows redefined with each new project.

Job Shop Process. Next in the continuum of process choices is the job shop process. Examples are custom metal processing shop, hospital emergency rooms, custom plastic injection molding shop, or making customized cabinets. A job shop process creates the flexibility needed to produce a variety of products or services in significant quantities. Customization is relatively high and volume for any one product or service is low. However, volumes aren't as low as for a project process, which by definition doesn't produce in quantity. The work force and equipment are flexible and handle various tasks. As with a project process, companies choosing a job process often bid for work. Typically, they make products to order and don't produce them ahead of time. The specific needs of the next customer are unknown, and the timing of repeat orders from the same customer is unpredictable. Each new order is handled as a single unit--as a job. A job shop process primarily involves the use flexible flow strategy, with resources organized around the process. Most jobs have a different sequence of processing steps.

Batch Flow Process. Examples of a batch flow process are scheduling air travel, manufacturing garments, furniture manufacturing, making components that feed an assembly line, processing mortgage loans, and manufacturing heavy equipment. A batch flow process differs from the job process with respect to volume, variety, and quantity. The primary difference is that volumes are higher because the same or similar products or services are provided repeatedly. Another difference is that a narrower range of products or services is provided. Variety is achieved more through an assemble-to-order strategy than the job shop’s make-to-order strategy. Some of the components for the final product or service may be produced in advance. A third difference is that production lots or customer groups are handled larger quantities (or batches) than they are with job shop processes. A batch of one product or customer group is processed, and then production is switched to the next one. Eventually, the first product or service is produced again Batch flow processes have average or moderate volumes, but variety is still too great to warrant dedicating substantial resources to each product or service. The flow pattern is jumbled, with no standard sequence of operations throughout the facility. However, more dominant paths emerge than at a job shop and some segments of the process have a linear flow.

Line Flow Process. Products created by a line process include automobiles, appliances, personal computers, and toys. Services based on a line process are fast-food restaurants and cafeterias. A line flow process lies between the batch and continuous processes, volumes are high, and products or services are standardized, which allows resources to be organized around a product or service. Materials move linearly from one operation to the next according to a fixed sequence, with little inventory held between operations. Each operation performs the same process over and over with little variability in the products or services provided. Production orders aren't directly linked to customer orders, as is the case with project and job processes. Manufacturers with line flow processes often follow a make-to-stock strategy, with standard products held in inventory so that they are ready when a customer places an order. This use of a line flow process is sometimes called mass production. However the assemble-

to-order strategy and mass customization are other possibilities with line flow processes. Product variety is possible by careful control of the addition of standard options to the main product or service. The pacing of production may be either machine-paced or worker-paced.

Continuous Flow Process. Examples are petroleum refineries, chemical plants, and plants making beer, steel, and processed food items. Firms with such facilities are also referred to as the process industry. An electric generation plant represents one of the few continuous processes found in the service sector. A continuous process is the extreme end of high-volume, standardized production with rigid line flows and tightly linked process segments. Its name derives from how materials move through the process. Usually one primary material, such as a liquid, gas, wood fibers, or powder, moves without stopping through the facility. The process often is capital intensive and operated round the clock to maximize utilization and to avoid expensive shutdowns are start-ups.