Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

4.5.1 Branches of Industry in Dependency upon Characteristic Features

Intended learning outcomes: Produce an overview on branches of industry. Explain different branches in dependency upon the two features facility layout and product variety concept.


A branch of industry is the sector or segment of business a company engages in.

Definitions of various branches of industry and areas of business can be found in governmental statistics on economics and industry, for example. Typical industrial branches include the chemical industry, plastics industry, electronics and electrical industries, aircraft and automobile industries, engineering and metal industries, watchmaking industry, paper industry, and textile industry. Typical branches in service-providing businesses include banking, insurance, consulting, computer software, trust companies and private management, and care agencies (for people and things).

An obvious approach is to seek branch-dependent concepts.

A branch model of planning & control groups together with concepts appropriate to specific branches, including suitable types of business processes and business methods.

The branch of industry or service is indeed related to many of the characteristic features of planning & control. The corresponding business methods, however, are usually too general to be ideally suited to a particular branch. For this reason, it has been useful to go beyond those concepts and develop branch models. Figure 4.5.1.1 shows different branches in dependency upon two characteristic features: facility layout from Figure 4.4.3.1 (features related to logistics and production resources), and product variety concept from Figure 4.4.2.1 (features related to user and product or product family).

Fig. 4.5.1.1        Different branches in dependency upon the two features facility layout and product variety concept.

The figure shows that:

  • In a first approximation, branches can be readily positioned according to the feature facility layout. This indicates that there is a clear relation here.
  • A number of branches, particularly those in the process industry (branches produc­ing “stuff” rather than “things,” as some would say), can be distinguished along the values of the feature product variety concept relatively clearly. In nearly all branches, however, we find product variety concepts of “according to (changing) customer specification” all the way to “individual or standard product” — with some exceptions. Exceptions are the production of plants and facilities, shipbuilding, large aircraft, and software: there are no examples positioned in the top right-hand corner of the matrix. Other exceptions are the production of rubber, plastics, food and beverage, brewery, sugar, forest, paper, oil, steel: there are no examples positioned in the bottom left-hand corner of the matrix. The relation here, therefore, is less clear than the relation to the feature facility layout.

The feature product variety concept is therefore largely independent of the feature facility layout (as well as of volume, understood as batch size).[note 412] This important ob­servation leads to the matrix. The following are some examples that support this observation:

  • Take a company producing standard machines. This is done with frequent order repetition, but in single units, either according to arrival of a customer order, or in advance (because it is a standard machine, inventory risk is small: the machine will be sold sooner or later). This is the “nearly top” right-hand corner in the matrix: job shop production or single-item-oriented line production.
  • Another company produces standard screws. Again, this is done with frequent repetition, but each time in large batches. This is the bottom right-hand corner in the matrix (as lotless is also very possible): high-volume line production or continuous production.
  • A company in the chemical branch produces a large batch of a specific active substance only once for the whole life cycle of the product, because of the high setup and order administration costs. This is the nearly bottom left-hand corner in the matrix: high-volume line production.
  • Still another company produces a plant as a single unit and only once, according to customer specification. This is the top left-hand corner in the matrix: site or project production.

Quiz on Chapter 4.5.1. : not yet available

Branches of Industry in Dependency upon Characteristic Features[kml_flashembed movie="https://opess.ethz.ch/wp-content/uploads/elements/Quiz_4_5_1.swf" height="75%" width="100%" /]



Course section 4.5: Subsections and their intended learning outcomes

  • 4.5 Branches, Production Types, and Concepts for Planning & Control

    Intended learning outcomes: Describe branches of industry in dependency upon characteristic features. Explain in detail production types and concepts for planning & control. Disclose selecting an appropriate branch model, production type, and concept for planning & control.

  • 4.5.1 Branches of Industry in Dependency upon Characteristic Features

    Intended learning outcomes: Produce an overview on branches of industry. Explain different branches in dependency upon the two features facility layout and product variety concept.

  • 4.5.2 Production Types

    Intended learning outcomes: Produce an overview on production types. Explain the different kinds of facility layouts seen — from a systems capabilities viewpoint — as production types together with other production types.

  • 4.5.3 Concepts for Planning & Control

    Intended learning outcomes: Present the concept for planning & control. Explain different concepts of planning & control in dependency upon the features facility layout and product variety concept.

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