Positioning of Production Systems:

Positioning of production system involves the selection of the type of product design, type of production processing system, and type of finished-goods inventory policy for each product group in the business strategy.

Product design is fundamentally two type viz. custom products and standard products. Custom products are designed as per the needs of each customer and its choice results in a batch production of many products. Alternatively standard product's choice results in only a few products leading to a continuous production or a batch production of large size.

Production processes may be of two types viz. product focused or process focused. In the former type which is required in case of a high volume of a few standard products, machines and workers needed for each product are grouped together. Whereas the latter suitable in case of a low volume of many unique products, involves only one type of process by each of the production department.

Selection of finished goods inventory policy may be done in two ways viz. produce to stock or produce to order. Generates to stock policy involves the production of products ahead to time and their placement in inventory. Generate to order policy is accompanied by the delay of production till one receives the customers' order. As apparent, produce to stock policy is preferred over the produce to order policy in case of fast delivery of products.