On the commercial side, product configuration implies generating a valid, complete, and consistent description (including price and delivery terms) of the product variant the customer is willing to buy and the company agrees to supply (sales configuration). On the technical side, product configuration implies translating such sales configuration into the operative instructions needed to build that product variant (technical configuration). Product configuration implies the predefinition of both product functionalities (which in turn requires deeper customer and market knowledge) and modality to obtain each of these functionalities.
IT-supported product configuration or simply product configurator supports the presentation of these product functionalities, checking of congruency between choices (sales configurators) and automatically producing bills of material and production sequences (technical configurators). The various configuration activities can be partially or totally automated depending on the specific context and company objectives.
Product configurators free up the technical office and sales office, and even more, they:
Virtual built to order is a form of order fulfilment in which the producer has the ability to search across the entire pipeline of finished stock, products in production and products in the production plan, in order to find the best product for a customer. In the virtual build to order a customer order can be fulfilled by a product either taken from finished stock, or taken from the pipeline matching the required specification, or taken from the pipeline and reconfigured in some way to match the specification, or entered at the start of the pipeline as a Built-to-Order product.
This approach reduces the trade-offs between:
A number of products are produced starting from the same components and raw materials. These works in progress become more and more different along the production and distribution flow. In this context, upstream activities are done in high volumes and can be done on forecasts to become more responsive without incurring excessive risks. Consequently, one way to become a mass customizer is to move changes in form and identity of the product at the latest possible point in the production and distribution flow.
In effect, this lever brings:
Changeovers are frequent in companies offering a large variety of catalogue or customized products made in small batches. Consequently, changeovers may occupy workers and machines for a considerable amount of time. In these contexts, the quick changeover is one of the main avenues to increase efficiency and responsiveness.
Single set-up times can be reduced through technological or organizational improvements. A reduction of total changeover time is obtainable also by improving scheduling without increasing inventories.
The effects of changeover improvements are:
Group technology is a general philosophy that advocates the systematic recognition and exploitation of similarities such as similarities in parts, products and design/manufacturing activities. The main assumption of group technology is that, if the parts/components are similar in shape and material, there is a high probability that their production processes will be similar. Two main areas of implementation of group technology are production and design.
In design, group technology can avoid creating new parts if similar parts with the same functionality already exist, speed up product development and generally lower part variety to manage. It brings also greater similarity and communality in production sequences. If applied to engineered-to-order products it makes more manageable the various projects by acting on their similarities.
In production, by grouping together machines that produce parts that are similar, a more repetitive production environment is created with:
The principal MC levers are: Standardization of components and subassemblies, Product modularity, Product platforms, Group technology, Quick changeover, Delayed product differentiation, Virtual build to order, IT-based sales product configuration, IT-based technical product configuration.
Each one of these levers can have different importance in different companies. Consequently, there is not an order of importance valid in general.
Companies that customize products or offer a high variety of products have a constant problem of components/parts proliferation. This proliferation can be caused by different reasons, ranging from differentiated customer’s needs and more demanding customers to local market regulations. An important role is played also by internal factors as marketing “creative” ideas and technical office tendency to find out the best solution for the specific product variant without enough attention to the consequences in the overall complexity that production and purchasing have to manage. A lever to counter this component proliferation is part standardization.
Standardization of parts (such as components and subassemblies) means increasing the degree of commonality of a given part across a company’s product range. It increases the number of occurrences of that part in the bills of materials of all the end items produced by the company, thus reducing the variety of parts managed within the company. It can be done within a product or across different products.
Part standardization is a crucial lever because it:
Product modularity essentially deals with how products are designed and how their functions are obtained. Modularity requires that each function is implemented by a distinct, dedicated module, meaning that there is a one-to-one mapping between product functions and modules. In addition, modularity requires that the interacting modules are decoupled (a property that is obtained by standardizing their interfaces).
Product modularity enables to make changes to any given module of the product without having to modify the interacting ones. To change one function it is enough to change one module. Therefore, product modularity:
Platform-based product development rests on the idea of simultaneously developing an entire set of products. These products should address a related set of market needs and have the potential to share components, interfaces between components, and production processes. Some product models can be fully designed while designing the platform. Other product models can be designed much later.
A product platform may take a considerable time to be developed, but once it is developed it speeds up the development of its additional products. Notably, investments made for a platform are exploited for a long time. Thus, the product platform: