Tackling the 3 primary drivers of product variability
by Teppo Salmia • 10 min read
Over the past 30 years I’ve worked in heavy machinery and telecommunications industries, and more recently as a business consultant with customers across various discrete manufacturing industries. Thus I’ve had the chance to observe the rise of product variability, and different strategies for tackling it. In this post I’ll take a look at how customer needs, the need for manufacturing parts from different raw materials, and color and brand variation drive product variability. I also outline some remedies to the headaches in managing product variability.
Customer needs are the #1 Driver of product variability
For obvious reasons Henry Ford style approach of only offering one type of product and expecting the customers to adjust their needs is no longer favored by manufacturing companies. Customer needs are widely recognized as the number one driver of product variation. We all have our personal preferences and we reflect them in our buying behavior, also in the business context. As a consequence manufacturing companies need to figure out how to provide customers what they want at a competitive cost level. One-off products could satisfy customer needs, but cost and lead-time issues make one-off products less desirable for manufacturers. Except in certain narrow product and customer segments where they can provide a competitive advantage.
As a result, mass-customization emerged as a way to fulfill more varied customer needs at competitive cost levels. Mass-customization can take many forms. Perhaps the most common approach is to develop re-usable product modules that can be combined in different configurations to satisfy a wide array of customer needs with fewer individual parts. Thus you can retain higher part production volumes and competitive cost level. Mass-customization is however not a silver bullet. There is evidence that skipping thorough analysis of which product features really are valued by your customers tends to result in niche features being introduced to products. This drives up product cost and product complexity. Done right, mass-customization works well with assemble-to-order business model, and thus facilitates quick response times to customer orders.
Managing customer needs driven product variability
To avoid excess cost of uncontrolled product variation the key is to
- Separate the really attractive product features from those with little significance
- Focus on a subset of the attractive product features you can implement cost efficiently, and sell at an attractive price.
- Develop a product architecture that allows varying product features through combining modules built from fewer components. Use embedded software to alter and optimize product behavior where applicable.
- Implement generic configuration rules that govern allowed combinations of features, and product specific configuration rules that govern inclusion and exclusion of parts based on feature selection.
Operating conditions drive product variability through part materials
Ambient conditions in general and in some product categories the characteristics of the material being handled with a product dictate the raw material selection. Thus, you need to use different materials for different applications, while geometric properties are shared by all material variants of a part.
Seems relatively straight forward, doesn’t it. But imagine how complex it can get when there are tens or even hundreds of material variants for each part, and when only certain combinations across parts are suitable for a given application. Adding all the other variability drivers can drive complexity through the roof.
Material variations can have a profound effect on manufacturing processes. Even though parts made from different materials share geometric properties, manufacturing processes will differ. Consider for example manufacturing of a high gloss injection molded part. The same form, fit and function can be achieved if the part is manufactured from e.g. black plastic granule and painted, or if it is injection molded from colored plastic granule. With the first approach you will have take paint thickness into account in injection mold dimensions to cater for tolerances. Furthermore, if you decide to provide the finishing touches by painting, you also need a painting line. Using colored plastic granule is likely to require higher mold surface quality to get the high gloss finish. So the process and tooling will differ. This is also true for machined parts. Machining steps, tools, and tool speeds may differ depending on the material.
Managing raw material driven product variation
In some respect material variation can even be considered as a special case of customer needs driven variation, because its origins are in the requirements for the product to operate under diverse conditions. Therefore it’s only natural that some of the same basic principles apply to managing material variation driven product variability that apply to customer needs driven product variation.
To get this type of variability under control you need to
- Separate the really attractive product applications from those with little significance. Take time to think through and thoroughly understand the impact of the decisions you take. A material variant is not just a simple matter of having another part ID, as discussed above.
- Focus on implementing a subset of the applications that can be implemented cost efficiently and sold at an attractive price.
- Separate design of the parts from the material variation to prevent multiplication of design data.
- Define generic configuration rules that govern allowed material combinations across your product.
- Define product specific configuration rules that govern inclusion and exclusion of parts based on feature selection.
- Implement integrated product and manufacturing change management to secure that material changes and introduction of new material variants get accounted for in part manufacturing processes.
Color and brand driven product variability
This gets us back to Henry Ford, since color and brand driven variation of products is perhaps most visible in automotive industry. Long gone are the days when customers were content with just one color option. Even a Ferrari isn’t always red. Anyone who has bought a car knows that it’s not just the exterior paint color you can choose, but also interior colors. And sometimes different surfaces can have different color, and even different material to be honest.
Color variation inevitably has an impact on manufacturing processes and part logistics. You need to decide where and when in the process you paint parts. And this impacts your stocking decisions. Furthermore the primer, method of applying the paint and the method of curing the paint all depend on the paint type, and may impact equipment required.
Colored parts and brand specific parts in heavy industries present a challenge also in the aftermarket. The decisions you need to weigh are whether to manufacture and stock parts as finished parts or less finish parts. Should you choose the latter you need to decide when in the process will those parts get the final surface treatment. Automotive companies as an example have pushed painting of exterior body parts to their dealer network. This allows them to avoid stocking large quantities of the same part in different colors.
Brand driven product variation is a slightly different animal. Yet it shares common characteristics with color driven variation. E.g, sister models across automotive brands share much of the same technology, but generally differ in exterior parts for styling reasons. However, it is common for industrial equipment and heavy equipment manufacturers to sell the same product under different brands. The characteristics that differ across brands are typically color, brand specific decals, documentation and sometimes embedded software.
The industries discussed above are not the only industries where color variation is a fact of life. It is already the norm in e.g. furniture industry and many product segments within consumer electronics. And it is becoming increasingly popular in products like household appliances, medical devices, recreational boats, etc.
Managing color and brand driven product variation
Taking shortcuts in deciding how to tackle color and brand driven product variation can come back to haunt you. My advice is to
- Take time to think through and thoroughly understand the impact of the decisions you take. A color variant is not just a simple matter of having another part ID, as discussed above.
- Separate design of the product from the color variation to prevent multiplication of design data.
- Define generic configuration rules that govern allowed combinations of colors across your product.
- Drive configurable color BOM with product specific configuration rules based on color and/or brand selection.
- Apply configuration rules to selecting which brand specific decals to include in the final product based on brand selection.
- Implement integrated product and manufacturing change management to secure that color changes and introduction of new color variants get accounted for in part manufacturing and assembly processes.
IDEAL GRP can help you get product variability under control
Our experts work with discrete manufacturing industry companies across the Nordics and Baltics solving tough problems. Tap into their knowledge for advise on managing product variability!
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