Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

7.2 Adaptive Techniques

Intended learning outcomes: Explain techniques for standard products with few variants as well as techniques for product families.


7.2.1 Techniques for Standard Products with Few Variants

 A variant bill of material is the bill of material for a product family containing the necessary specifications indicating how the bill of material for a variant of the product family is derived. A variant routing sheet is defined analogously.[note 702]

Standard products with few variants are produced repetitively and possibly stored. Here, conventional representations of product structure using bill of material and routing sheets can be used. Figure 7.2.1.1 shows that a variant in stock corresponds to a different item. Variant-specific compo¬nents are grouped in their own variant assembly, called V1, V2,…, while the general components form their own assembly G. Variants in stock (P1, P2,…) contain as components the general assembly G and the corresponding variant-specific assembly V1, V2,…

Fig. 7.2.1.1        Conventional variant structure for a few, stockable variants.

The (independent) demand for the product family, weighted by the option percentage, results in the independent demand for variants P1, P2,… The option percentage, like independent demand, is a stochastic variable (see Section 10.5.3). Because of a necessary safety calcula­tion (see Section 10.5.4), the sum of the inde­pendent demand for the variants is greater than the independent demand for the product, or product family. To put it another way, the sum of the option percentages, under consideration of a safety factor, is greater than 1.

In the case of assemble-to-order (ATO), deriving dependent demand for the general assembly G yields an amount that is too large. This is corrected by entering negative indepen­dent demand for general assembly G. This negative number equals the sum of the safety demand for the variants P1, P2,… minus the safety demand for the product family.

This technique is easy to apply to a range of several dozen variants, which can be found, for example, in the manufacture of large machinery. For planning aspects, it may use different kinds of particular bills of material:

  • Both the general assembly G and the variant assemblies V1, V2,… can be phantom assemblies, which are transient (nonstocked) subassemblies.
A phantom bill of material represents an item that is physically built, but rarely stocked, before being used in the next step or level of manufacturing (cf. [APIC16]).[note 703]
  • A position of a variant-specific assembly can also (or partly) represent the subtraction of a position of the general assembly. This can be achieved through a negative quantity per in the variant-specific assembly, for example.
A plus/minus bill of material is a variant bill of material with added and subtracted positions. A plus/minus routing sheet is defined analogously.
  • Both the general assembly G and the variant assemblies V1, V2,… can be — and in particular the “parents” of a plus/minus bill of material are — pseudo items.
A pseudo bill of material is an artificial grouping of items that facilitates planning ([APIC16]).
  • Phantom and pseudo bills of material facilitate the use of common parts bills of material.
A common parts bill of material groups common components of a product or product family into one bill of material, structured to a pseudo parent number (cf. [APIC16]).
A modular bill of material is arranged in product modules or options. It is useful in an assemble-to-order environment, i.e., for automobile manufacturers (cf. [APIC16]).
A variant master schedule is a master (production) schedule for products with few variants or product families.[note 704]

There are two possibilities for the level of the variant master schedule. Figure 7.2.1.2 shows an example MPS at the end product level, supposing a quantity per of 1 for the general assembly G and an equal option percentage in the demand — with a deviation of 20% — of the two variants at the product family P level. For teaching purposes, the example does not take into consideration safety demand for the product family P.

Fig. 7.2.1.2        The production plan and its corresponding MPS at the end product level (example of a product family P with two different products, P1 and P2).

Note the negative demand on the level of the general assembly G, as discussed above. As for distribution of the deviation in the two periods of January and March, the reader can refer to Figure 5.2.3.4.

The associated final assembly schedule (FAS) modifies the MPS according to the actual customer orders. If in January the actual demand is 60 units of P1 and 40 units of P2, then the MPS for February must be revised to replenish first the excess use of P1 in January (20 units). Figure 7.2.1.3 shows this situation, extended for several months.

Fig. 7.2.1.3        Revision of the MPS according to actual splitting of family demand as given by the FAS.

Figure 7.2.1.4 shows the second possibility for the level of the master pro­duction schedule (MPS): the MPS at the subassembly level. We suppose a quantity per of 2 and, again, an equal option percentage — with a deviation of 20% — for each variant-specific assembly V1 or V2. Again, the example does not consider safety demand for product family P. In this case, there is no need to deal with the (tricky) negative demand of general assembly G.

Fig. 7.2.1.4        The production plan and its corresponding MPS at the subassembly le­vel (example of a product family P with two variants, V1 and V2).

The revision of the MPS according to actual splitting of family demand given by the FAS would result in a table similar to the one in Figure 7.2.1.3.

A planning bill of material is an artificial grouping of items that facilitates master scheduling and material planning (cf. [APIC16]).

A planning bill of material can facilitate the management of a variant master schedule. A planning bill of material may include historical option percentages of a product family as the quantity per.

A production forecast is a projected level of customer demand for key features (variants and accessories).[note 705]

A production forecast is calculated by using the planning bill of material.

A two-level master schedule uses a planning bill of material to master schedule an end product or product family, along with selected key features (variants and accessories). 

A product configuration catalog is a listing of all upper-level configurations contained in an end-item product family. It is used to provide a transition linkage between the end-item level and a two-level master schedule (cf. [APIC16]).

Adaptive Techniques (Questions).



7.2.2 Techniques for Product Families

Generally, a product family can have hundreds of variants. In this case, a super bill of material is an appropriate planning structure.

 A super bill of material is a planning bill of material for product family P, divided in one common and several modular bills of material. The common bill of material G, together with one of the modular bills of material V1, V2,…, Vn, forms one possible product variant. The quantity per (xi) of each modular bill of material (Vi) is then multiplied by the expected value of the option percentage corresponding to the variant, plus safety demand for the deviation of the option percentage (as was also necessary in the case with few variants).

Figure 7.2.2.1 illustrates the example in the definition above.

Fig. 7.2.2.1        Super bill of material with option percentages x1, x2,…, xn.

The (independent) demand for the product family is the forecast for the entire product family plus eventual safety demand (see Section 10.5.4). In general, the sum of all demand on variant assemblies is — even with a quantity per of 1 — by far greater than the demand for the product family.

A structure like this is also called one-dimensional variant structure (variable bill of material and variable routing sheet), because the variants are simply counted de facto. V1, V2,…, Vn may lie in the form of a plus/minus bill of material.

In contrast to the case with few variants in Section 7.2.1, requirements planning now yields dependent demands. In order configuration, a variant number must be added to the product family, so that the correct product variant can be selected and put into a production order.

The number of variants per product family that can be managed practicably with this technique is as high as several hundred. For larger numbers of variants, it becomes very difficult to determine the correct variant. Administrative search efforts become unwieldy, and there is the danger that one and the same variant will be stored as master data more than once. Moreover, many of the bill-of-material positions and routing sheet positions saved under the variant assemblies are redundant; they exist in the various variants in multiple fashion. In most cases, there is a multiplicative explosion of the quantity of the positions in the bill of material and routing sheet; the same components and operations appear — often except for one — in almost every variant. This redundancy causes serious problems for engineering change control (ECC).

Figure 7.2.2.2 shows an example of the variant master schedule at the subassembly level. For this case, let the quantity per for each variant be only 1. In addition, let the number of variants be 100, and let the demand quantity of the whole family P be 100, too. Again, we suppose an equal option percentage — with a deviation of 20% — of the variants of the demand at the product family P level. Again, for teaching purposes, the example does not take into consideration safety demand for product family P.

Fig. 7.2.2.2        The production plan and its corresponding MPS at the subassembly le­vel (example of a product family P with a number of variants in the order of the total demand quantity for the product family).

The revision of the MPS according to actual splitting of family demand given by the FAS would result in a table similar to the one in Figure 7.2.1.3, but it is more complicated to calculate.

Furthermore, the example reveals that, if the number of variants becomes as high as the total demand quantity for the product family, the option percentages become small. In addition, their deviation from the mean becomes so large that no forecast for the variant assemblies with economically feasible consequences is possible. For each variant, demand tends to be lumpy. For this reason, it will be necessary to apply one of the deterministic techniques that are described in the following.



Course sections and their intended learning outcomes

  • Course 7 – The Concept for Product Families and One-of-a-Kind Production

    Intended learning outcomes: Produce logistics characteristics of a product variety concept. Explain adaptive and generative techniques in detail. Describe the use of generative and adaptive techniques for engineer-to-order. Differentiate various ways of cooperation between R&D and Engineering in ETO Companies.

  • 7.1 Logistics Characteristics of a Product Variety Concept

    Intended learning outcomes: Differentiate between high-variety and low-variety manufacturing. Describe different variant-oriented techniques, and the final assembly schedule.

  • 7.2 Adaptive Techniques

    Intended learning outcomes: Explain techniques for standard products with few variants as well as techniques for product families.

  • 7.3 Generative Techniques

    Intended learning outcomes: Disclose the combinatorial aspect and the problem of redundant data. Present variants in bills of material and routing sheets as production rules of a knowledge-based system. Explain the use of production rules in order processing.

  • 7.8 Scenarios and Exercises

    Intended learning outcomes: Apply adaptive techniques for product families. Disclose the use of production rules in order processing. Elaborate the setting the parameters of a product family.

  • 7.9 References

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