Anna Myrodia

Impact of product configuration systems on product profitability and costing accuracy

Abstract This article aims at analyzing the impact of implementing a product configuration system (PCS) on the increased accuracy of the cost calculations and the increased profitability of the products. Companies that have implemented PCSs have achieved substantial benefits in terms of being more in control of their product assortment, making the right decisions in the sales phase and increasing sales of optimal products. These benefits should have an impact on the company’s ability to make more accurate cost estimations in the sales phase, which can positively affect the products’ profitability. However, previous studies have not addressed this relationship to a great extent. For that reason, a configure-to-order (CTO) manufacturing company was analyzed. A longitudinal field study was performed in which the accuracy of the cost calculations and the products’ profitability were analyzed before and after a PCS was implemented. The comparison in the case study revealed that increased accuracy of the cost calculations in the sales phase and consequently increased profitability can be achieved by implementing a PCS.

Analysis of visual representation techniques for product configuration systems in industrial companies

In recent years, there has been an increasing demand for customized products. Product configuration systems (PCS) are introduced as one of the most successful systems of artificial intelligent for providing customized products. One of the main challenges in PCSs projects are described in relation with knowledge representations and communications with domain experts. The results presented in the paper are therefore aimed to provide insight into the impact from using visual knowledge representations techniques in PCSs projects. The findings indicate that use of visual knowledge representations techniques in PCSs projects will result in improved quality of maintenance and development support for the knowledge base and improved quality of the communication with domain experts.

Return on investment from the use of product configuration systems – A case study

Abstract Product configuration systems (PCS) are increasingly being used in industrial companies to enable the efficient design of customized products. The literature describes substantial benefits that companies have achieved from the use of PCS, such as reduced resource consumption, reduced lead-time, improved quality, and increased sales, which should lead to a significant return on investment (ROI). However, there is little detailed quantification of the benefits, costs, and ROI from using PCS in the literature. Thus, the true value of PCS remains unknown. Hence, this study quantifies (1) the benefits in terms of reduced man-hours, improved quality of specifications, reduced lead-time, and increased sales and (2) the costs of development, implementation, and maintenance of PCS. Based on this, the ROI is calculated. The analyses presented in this study are based on a world-leading company in pump manufacturing. This study verifies the benefits of PCS that are described in the literature. Further, it contributes to the field by introducing a method to quantify the related benefits, costs, and ROI. Finally, the article illustrates how PCS can be used in companies having product portfolios consisting of a standard to engineered products.

Reconfiguring Variety, Profitability, and Postponement for Product Customization with Global Supply Chains

At present, many industrial companies offering high product variety focus on systematically reducing the complexity of their product range and business processes. Related challenges are often named to increase time to market, reduce the effectiveness in product development, and lower process efficiency. For manufacturers with global supply chains, additional uncertainties arise in defining the right manufacturing strategy with respect to production location and postponement. To better understand related managerial implications, this chapter discusses a case study of a global manufacturer providing customized industrial applications. In particular, the study investigates the relationships between product variant profitability and manufacturing strategy relative to postponement and location. The results indicate that an improved configuration of these factors through substitution and supply chain redesign significantly increases the overall product portfolio profitability.

Product configuration system and its impact on product's life cycle complexity

The purpose of this paper is to identify areas throughout a products lifecycle processes where complexity can be reduced by implementing a product configuration system (PCS). As discussed in the literature, several benefits are realized by using a PCS in terms of product and process standardization. This also leads to control and reduce of complexity both in products and processes. To this end, this research attempts to quantify and assess these benefits and is supported by empirical evidence. A case study of an engineering company is used and the results indicate significant improvements for the company in several life cycle processes.

Two-way substitution effects on inventory in configure-to-order production systems

In designing configure-to-order production systems for a growing product variety, companies are challenged with an increased complexity for obtaining high productivity levels and cost-effectiveness. In academia several optimization methods and conceptual frameworks for substituting components, or increasing storage capacity have been proposed. Our study presents a practical framework for quantifying the impact of a two-way substitution at different production stages and its impact on inventory utilization. In a case study we quantify the relation between component substitution, and inventory capacity utilization, while maintaining the production capacity as well as the external product variety.