Maybe it’s because we specialize in high mix manufacturing or maybe there are just more of them out there, but we are increasingly working with companies with highly configurable products who want to adopt lean principles in their production operations. These products span the verticals of electronics, industrial equipment, and consumer products industries. In some ways, this level of configurability is anathema in the lean community. Indeed, some lean thought leaders have argued that companies should identify their runners, repeaters and strangers, focus on making their runners flow, and then diligently get rid of their strangers. At an AME conference session on high mix/low volume manufacturing, the presenter’s advice was in effect to find good suppliers to outsource the strangers to. That can’t work when the product strategy itself is to provide highly tailored solutions to their customers.
When the number of potential combinations of features, options, colors, sizes, and accessories gets into the billions, product configurators move from “nice to have” to “business critical.” Lean introduces the concept of a “perfect order” where the right products are sold at the right quantity, at the right quality, at the right capability, at the right time, and for the right price. How do you get it right every time all the time with such variation and complexity? In effect, this is a new product every time out.
Configuration management is most often seen as an “order to cash” function where a product configurator ensures allowable combinations and assists with product pricing. A configurator typically produces a unique bill of material for the particular order which defines the selected features, options, and colors. This unique bill of material is the “as ordered” configuration which may become the “as built” configuration depending on the flexibility to apply substitute components readily.
Companies producing thousands of unique products per day have had to solve the challenges of managing variation within standard processes. Here are some of the strategies we’ve found to be the most effective:
- Understanding the demand patterns of runners, repeaters and strangers allows you to have some base volume of repeating work that can help provide a buffer to the dips and spikes of customer demand. That understanding needs to apply to every level of build from final assembly back through sub-assembly or feeder areas so that intermediate level buffers can keep lead times short.
- Integrating configuration with material movement to point of use. Again, some components that are used commonly across many configurations should be held at point of use. Others should be picked only based on order requirements. Tracking specific picks or transfers to their requirements allows the operators the visibility to know whether they have the material to build a specific order.
- Integrating configurators with production scheduling. When the time to build a product varies substantially depending on configuration, using average build times either risks late delivery or not being able to use your available capacity as fully. Maintaining standard times by feature set can allow a unique build time for each configuration.
- Providing complete operator instructions assembled based on specific configuration forces electronic presentation of drawings and work instructions that can be prepared for a specific order.
- Tracking “as ordered” and “as built” configurations provides traceability for later product support.
The common thread is that configured solutions require more focus on the information flow within an organization than on the physical material flow. And that requires an integrated execution system that fully supports configuration management.
Author: Phil Coy, Director, Strategic Services