Product configuration management is the capability of systematically organizing, tracking, and controlling the components of a product or multiple products, including hardware, software, documentation, and associated assets to enable quick and accurate configuration of end products, facilitate the reusability of parts and components across products and platforms and ensure consistency and maintainability of products and their components throughout all changes and lifecycles.
It sounds simple, but anyone who ever attempted to implement true product configuration management in their organization realized that it involves more than just buying a new software or installing new functionality for the PLM system that allows managing parts, BOMs and revisions.
The benefits of a well implemented product configuration management solution are huge though and include better BOM accuracy, faster product configuration, and lower product costs as a result of component reuse. In its server business, IBM for example was able to reduce part numbers by 70 – 80% through the use of common and preferred parts, eliminate $700 million from their cost structure and increase the number of new products by 270%[1].
So what does it take to implement a comprehensive product configuration management solution in a company that reaches across product lines and platforms?
1. Defining Modules, Variants, Options, and Configuration Rules
Many companies have a large catalogue of different manufacturing and purchase parts and components they use whenever one fits into a new product. It’s a lot like a large box of Legos, where one searches as long as required to find the right piece. But unlike playing with Legos, where one is limited to the pieces in the box, if an engineer doesn’t find a fitting part within a reasonable time, they quickly move to design a new one, with usually very expensive consequences downstream.
It would be much easier, faster and less costly if a product could be configured using a limited number of preconfigured modules, like for example a few different motors, batteries, bodies, chassis, drive trains, wheels, interior configurations, entertainment systems, etc. for which it has already been determined how they fit and work together.
And that is where a majority of the preparation effort is to make product configuration management work:
a) Analyze all existing products, identify what parts are common or can and should be reused across different products. Generally the more the same part can be reused across different products the cheaper the part as a result of economies of scale.
b) Define platforms or models. For example an economy model, a sports model, a family model and a truck.
c) Define modules that can be used in all platforms, like motor, battery, body, chassis, drive train, wheels, front seats, back seats, etc;
d) Define variants and options for each module. For example 200 kW motor, 260 kW motor and 320 kW motor; sedan, coupe, station wagon, convertible and truck; short chassis, medium chassis and long chassis; steel wheels and alloy wheels; textile seats or leather seats; sunroof or moonroof; a Pioneer, a Bose or a Sony entertainment system, etc. A variant thereby is something of which one has to be selected for each configuration, whereas an option is something that can or cannot be selected. For example, wheels are a variant, because one type of wheels have to be selected for a product. The sunroof and moonroof are options, because any car model could be ordered without it.
e) Define configuration rules that define which variants and options can, cannot and should be used together and with which platform or model. This is where it can get complicated, as with an increasing number of different modules, variants and options there is an exponentially increasing number of possible combinations and permutations. For example 3 different modules with only 2 variants or options each already results in 9 possible end configurations, if everything can be combined with each other. So it is generally important to keep the number of modules, variants and options as low as possible and define rules that limit what can, cannot, should and should not be used together. For example, it may be technically possible to configure the truck with a 200 kW motor, but we may not want to sell this configuration because the truck would not be powerful enough. But it may not be technically possible to configure the small car with the most powerful motor because there is not enough space. Another rule may be that the short chassis can only be configured as a coupe and station wagon, and the truck can only be configured with the medium and long chassis. Then of course for all models the sunroof and moonroof can be selected as options, except of course for the convertible, where a sunroof and moonroof make no sense.
2. Reconfigure Existing Products
Once all the models, modules, variants, options and configuration rules are defined, a determination needs to be made if existing products should be reconfigured using the new setup. If the existing products are still being sold, it most likely makes sense. If the existing products are just being used in the field, but no new models of this type are being sold anymore, it probably does not make sense and the new approach should just be applied to new products that are being sold.
This reconfiguration can involve significant effort as existing CAD assemblies and EBOMs may have to be restructured to reflect the new product configurations with the defined modules, variants and options.
3. Define Best Practices for the Use of the New Modules, Variants and Options and for Future Additions and Changes
Another important step is to define guidelines how models, modules, variants and options are used and when new ones can or should be added.
The reason is that it is usually easy to sell a new product that deviates only slightly from an existing one. But the downstream consequences are usually dear. So what should be done if a customer asks for a slightly different product then what is available. In our case, what if customers repeatedly ask for a Denon sound system? Should the company say no because that’s not an available variant? Should the company handle these instances as exceptions and custom configure the product with what the customer wants, in deviation of the existing variants and options? Or should a project be initiated to add a Denon sound system as a new variant?
There is not a right or wrong answer to these questions. But these are business decisions that should be made before the situation arises. Because in an urgent situation, one may make a decision that has long-lasting and expensive consequences.
In summary, implementing a new product configuration management solution involves a significant preparatory effort to define new models, modules, variants, options and configuration rules, and to apply them to the existing products. This effort can take many months and require many resources and should therefore be very carefully planned.
About the Author
Andreas Lindenthal is the founder and Managing Partner of PLMadvisors, a vendor and technology neutral consulting firm specializing in PLM, new product development (NPD) and innovation. He is a passionate thought leader and recognized industry expert with over 25 years international, hands-on professional experience in innovation, new product development (NPD), and product lifecycle management (PLM). He has served over 50 leading global companies across various industries to sustainably improve their business results by helping them to drive innovation, increase productivity, shorten time-to-market, reduce costs, ensure compliance and improve product quality through the definition, implementation and optimization of innovation, NPD and PLM strategies, practices, processes and technologies.
Prior to PLMadvisors Andreas co-founded and was president of Metafore, an independent PLM consulting and services company. Metafore later merged with Kalypso, an innovation consulting firm, where Andreas served as partner, practice lead and member of the leadership team. Previously, Andreas was an executive at Siemens PLM, where he was responsible for business development and customer support in Switzerland and the Western region of the United States. Andreas also worked as head of product development at Sulzer AG, a Swiss technology corporation, where he led the company’s new product development efforts. In this role he also led the evaluation, implementation, and operation of an enterprise-wide PLM system with the objective of lowering time-to-market and cost of goods sold for new products. From Sulzer he received the “Innovation Award” for his pioneering ideas and work in establishing and sustaining a corporate culture of innovation and productivity.
Andreas holds an MBA degree from the Graziadio School of Business and Management at Pepperdine University in Malibu, California, a bachelor degree in economics from the Institute of Management in Zurich, Switzerland and a bachelor degree in Mechanical Engineering with emphasis in Computer Integrated Manufacturing (CIM) from the Zurich University of Applied Sciences in Switzerland. Andreas has written various articles and thought ware and is a frequent speaker at industry events worldwide.