Configuration Examples& Mass Customization

by Christian BentzenSales & Project Director | SolutionSpace

Example of Complex Configurable Item: Cyclone Air Filter

Different Configuration for different purposes, same model

Configuration Complexity

Configure to Order (CTO) & Configure, Price & Quote (CPQ)

Multiple Channels & Geographies

Objectives of Configuration Management

Flex Hose

Clean Air Out

Cone

Outer Cylinder

Motor

CycloneOutlet

Blower Outlet

Duct

Muffler

Filters

Blower

Inlet

Dust Bin

Cyclone Air Filter

Dust Bin

Flex Hose

Clean Air Out

Cone

Outer Cylinder

Motor

CycloneOutlet

Blower Outlet

Duct

Muffler

Filters

Blower

Inlet

Cyclone Air Filter

Dust Bin

Flex Hose

Clean Air Out

Cone

Outer Cylinder

Motor

CycloneOutlet

Blower Outlet

Duct

Muffler

Filters

Blower

Inlet

Flex HozeDiameterLengthMaterial

BlowerCapacityMotor SizeDiameterOutlet LengthMaterial

CycloneAir FlowInner DiameterOuter DiameterHeightMaterial

InletAir FlowDiameterLengthMaterial

Dust BinDiameterHeightMaterialCapacityHow to Empty

DuctDiameterBend DegreeMaterial

MufflerNoise ReductionMaterial

FiltersAir FlowDiameterLengthFiltration CapabilityCleaning Method

OverallTotal CapacityMass BalanceEnergy BalanceNoise LevelMounting

Confugurable Parameters

Sales ConfigurationType of AirDegree of PollutionAir VolumeIndustry Requirements

. . . . leads to:HeightDiameterMaterialSurface

Production ConfigurationUpper Mounting Ring- Diameter, # HolesFour Upper Cone Parts- Hight, Width, Material, Surface- Bending work, Welding timeFour Lower Cone Parts- Hight, Width, Material, Surface- Bending work, Welding timeTwo Assemply Rings- Diameter, # Holes- Mounting timeOutlet Tube- Hight, Diameter, MountingMounting, Grinding, FinishingPackaging, Transportation . . .

Procurement ConfigurationMaterial & SurfaceSquaremetersTime to Cut & BendMeters of WeldingGrinding and FinishingPackaging, Transportation

- All according to the frame agreements with the workshops

Chamber Structure

Configuration Complexity

Different Views on the same Components• Sales Configuration

‒ Business Oriented, Customer Requirements & Benefits‒ Easy to use for Sales, Web Portal, B2B, B2C‒ Configure, Price & Quote (CPQ)

• Product Configuration‒ More Detailed, Individual Components‒ Engineering, Construction, CAD Drawings‒ Input to Production Planning, Project Management

• Procurement Configuration‒ Next Generation Approach‒ To be built into the Supplier Agreements‒ Lean, Just-in-time, take more control of the Value Chain

Facts from Gulf Extrusions:60,000 tons of extruded aluminium profiles per year13,000 different profile designs10,000 price enquiries per month

Fluctuating raw material prices, based on weightIncreasing cost of finishing, heavy investmentsLow Margins in a volatile market

ConfigurePrice

Quote

13,000 Profile DesignsAlloy, Length, QuantityAnodizing, Dying, SealingPowder Coating, CuringPolishing, Packaging

6 Extrusion PressesFully Automated FactoryTotal Cost Control of all Processes and MachinesIncreasing Production Cost

10,000 Enquiries per MonthAll necessary ProductionDetails -> ERP

Master Data ManagementDetailed Cost AnalysisProduct ModellingAdvanced ConfigurationDynamic Production Planning

The Most Advanced CPQ System - Configure to Order

Sales Configuration across multiple sales channels and geographies

The Challenge‒ Multiple product lines from different parts of the organization‒ Difficulty to fulfil the intention of One Point of Contact for all products & services‒ Customers often ask different parts of your organization and get different answers‒ Desire to improve conformity across all sales channels on a global scale‒ Increasing demand for flexibility from the customers‒ Pricing dependent on complex rules and agreements, often off-line‒ Problems to follow all changes in products and services and their prices‒ Too long time to introduce new products or changes ‒ Sales often promote outdated or impossible to produce products, leading to low margins,

rework or high warranty cost‒ Low Cross-Sales and Up-Sales support in existing systems‒ High time and resource consumption to prepare complex quotations‒ Complex approval processes to ensure correctness and proper margins‒ . . . .

Why Configuration ?

If you manufacture or sell complex product and services, you should consider introducing Configuration Management if you want to achieve the following benefits:

– Lower cost of Flexibility– Improved Customization– Faster Time-to-Market– Better Cost of Sales– Shorter Sales Cycles– Higher Customer Satisfaction– Optimized Product Quality– Structured Master Data Management– Sharing of Best Practices– More efficient Change Management– Visibility of Mistakes

Where Configuration fits in:– Product Design– Engineering– Sourcing– Manufacturing– Stock keeping– Marketing– Sales– Documentation– Service– Spare Parts

Objectives of Configuration Management

• To Design products that can meet customer demand the most optimal way

• To Engineer products and manufacturing methods to satisfy mass customization

• To Source required components with maximum re-usability and best possible price

• To Manufacture customized products at mass production efficiency and cost

• To improve Quality and Change Management

• To keep the lowest possible Stock to minimize tied-up capital

• To make sure that your products are Marketed according to local requirements

• To lower Cost of Sales by optimizing Channels to Market

• To minimize the cost of and maximize flexibility of Documentation

• To ensure optimal Service in order to improve Customer Satisfaction

• To optimize availability of Spare Parts at lowest possible cost

Disciplines of Configuration

• Modeling Products– To ensure mass customization possibilities

• Testing Models– It’s far cheaper to test a model than a product

• Implementing Models in Manufacturing– Getting the most out of the configuration technology

• Using Models in Marketing and Sales– Meeting Market Demand– Product Catalogues– Only sell what can be produced– Up- and Cross selling

• Building efficient Sales Channels– Indirect sales and web shops– Self Service Portals– Same model for all