Martin Bonev

Optimizing the order processing of customized products using product configuration

For the better part of the 20th century many large companies have been focussed on optimizing their mass production process as a way of maximizing their profits. Nowadays, in the existing environment of global competitiveness, enhancing the production process remains a significant issue as well. Product configuration based on integrated modular product structure and product family architecture has been recognized as an effective means for implementing mass customization. In order to evaluate the effects of product configuration on order processing, a study has been conducted by the Department of Management Engineering and Operations Management of the Technical University of Denmark in cooperation with the Institute of Production Engineering and Machine Tools of the Leibniz Universität Hannover. Thereby, a product configuration system has been modelled for a manufacturer of mass customized products and its benefits for the order processing have been evaluated.

Formal computer-aided product family architecture design for mass customization

Conventional methods for product family architecture design are informal and limit the support for architecture communication, synthesis and documentation.A formal computational approach requires the integration to configuration systems, improved generic models and extended structural analysis methods.Product family architectures can be modelled interchangeably with generic design-structure matrixes, generic node-link diagrams and product variant masters.Supportive tools automate the documentation and formalize the synthesis of architectures, thereby making any decision about a preferred solution explicit and transparent. With product customization companies aim at creating higher customer value and stronger economic benefits. The profitability of the offered variety relies on the quality of the developed product family architectures and their consistent implementation in configuration systems. Yet existing methods are informal, providing limited support for domain experts to communicate, synthesize and document architectures effectively. In single product design explicit visual models such as design structure matrices and node-link diagrams have been used in combination with structural analysis methods to overcome the limitation of the informal approach. Drawing on thereto established best practises, this paper evaluates and extends the relevant methods and modelling techniques, to create a consistent and formal approach for the design and customization of entire product families. To validate its applicability, the approach is tested on a case study at a manufacturing company offering bespoke industrial applications. A generic modelling method termed the integrated design model (IDM) is developed and complemented with a computational structural analysis method, to assist domain experts in their daily work. When combined with a configuration system, the presented IDM tool automates the documentation and formalizes the synthesis of architectures, thereby making any decision about a preferred solution explicit and transparent.

Utilizing platforms in industrialized construction: A case study of a precast manufacturer

Purpose – The purpose of this paper is to explore the development of a platform-based project execution in the industrialised construction sector, with a focus on systematically balancing cost and value. Offering custom-tailored buildings at reasonable costs has been a growing concern for many construction companies. A promising approach adapted by operations management and design theory regards individual building projects as the adjustment and recombination of components and processes from a set of predefined platforms, while configuration systems assure feasible building solutions. Design/methodology/approach – After adapting some of the underlying assertions of platform design to the engineer-to-order (ETO) situation in construction, the practical implications are evaluated on a case study of a precast manufacturer using high performance concrete. Findings – Based on empirical findings from three distinct platform strategies, this research highlights key aspects of adapting platform-based developed th...

The Use of Modelling Methods for Product Configuration in Industrial Applications

Developing product configuration system (CS) requires extracting and representing domain expert knowledge in appropriate product models. As acknowledged by researchers, this is often one of the most challenging activities in configuration projects, where only little empirical insights have yet been reported. This article investigates the challenge on how industrial companies model their product CSs. The study is based on interviews of 18 industrial companies using CSs for configuring customer-tailored products. It investigates the relationship between using a structured modelling technique for modelling product families relative to less or no formal approaches. Furthermore, the study explores the specific characteristics of configuration set-ups with respect to size and complexity and their effect on product variant management and availability of product knowledge in organizations. The results empirically validate the need for a suggested systematic modelling approach for large and complex configuration projects and its positive effect on the overall performance of companies.

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.

Identification of Profitable Areas to Apply Product Configuration Systems in Engineer-To-Order Companies

This chapter suggests a systematic framework for identifying potential areas, where Engineer-To-Order (ETO) companies may increase their profitability by implementing a Product Configuration Systems (PCSs). In order to do so, a three-step framework is proposed based on literature. The starting point is to conduct a profitability analysis to determine the accuracy of the cost estimations, and based on that the reason for the deviations across different projects is found. The next step is to generate the scope for different scenarios that aim to improve the current situation. Finally, it is suggested to make a cost-benefit analysis for different scenarios to determine where a PCS can provide the most benefits. This chapter is supplemented with a case study from an ETO company where potential areas for using PCS were found by applying the suggested framework.

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.

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.

Analyzing the accuracy of calculations when scoping product configuration projects

Product configurators have increasingly been applied in industrial environments. With their help, companies providing customized products have managed to redesign their specification processes and to better handle the growing product variety. But despite the promising benefits, conducting configuration projects is still challenging. Assuming that configurators would naturally solve the existing flaws, both, researchers and professionals typically neglect the need for a making a precise scope for their implementation. Based on this theoretical and practical concern, the present study provides a detailed framework on how the highest potential and eventually the most benefits from using configuration systems can be identified. In particular, this paper investigates how the less explored domain of varying gross margins and calculations reveal a considerable potential for improvement by means of configuration.