Managing Variety for Assembled Products: Modeling Component Systems Sharing
AbstractComponent sharingÔusing the same version of a component across multiple productsÔis an approach adopted by many assembled-product manufacturers to achieve high final product variety with lower component variety and cost. This paper presents a methodology for determining which versions of a set of related components should be offered to optimally support a defined finished product portfolio. We develop optimization models that determine which versions of each component should be introduced and which of these versions each product should use to minimize design and production costs. This approach is appropriate for components with a relatively low impact on consumersÙ perceptions about product differentiation, which can be shared across a set of products if they meet the most stringent performance requirements in the set. We illustrate our procedure on automotive braking systems, but also discuss its applicability to other components and industries. We identify three conceptually different organizational approaches to component sharing: a coordinated projects approach that requires higher-level organizational echelons above the individual project, a project-by-project approach that does not, and a hybrid partially coordinated approach. We use our model to examine how the gain from the coordinated projects approach relative to the project-by-project approach varies with the number of component versions in consideration, warranty costs, complexity costs, and demand variability. Further, we use our model to highlight the risk of using simplistic heuristics to determine design sequence within a component system in a partially coordinated approach.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by INFORMS in its journal Manufacturing & Service Operations Management.
Volume (Year): 5 (2003)
Issue (Month): 2 (November)
Component Systems Sharing; Managing Variety; Assembled Products Design;
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Israelsen, Poul & Jørgensen, Brian, 2011. "Decentralizing decision making in modularization strategies: Overcoming barriers from dysfunctional accounting systems," International Journal of Production Economics, Elsevier, vol. 131(2), pages 453-462, June.
- Nils Boysen & Armin Scholl, 2008.
"A general solution framework for component commonality problems,"
Jena Research Papers in Business and Economics - Working and Discussion Papers
12/2008, Friedrich-Schiller-University Jena, School of Economics and Business Administration.
- Nils Boysen & Armin Scholl, 2009. "A General Solution Framework for Component-Commonality Problems," BuR - Business Research, German Academic Association for Business Research, vol. 2(1), pages 86-106, May.
- Nepal, Bimal & Lassan, Gregg & Drow, Baba & Chelst, Kenneth, 2009. "A set-covering model for optimizing selection of portfolio of microcontrollers in an automotive supplier company," European Journal of Operational Research, Elsevier, vol. 193(1), pages 272-281, February.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc).
If references are entirely missing, you can add them using this form.