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

7.2.1 Techniques for Standard Products with Few Variants

Intended learning outcomes: Present the conventional variant structure for a few, stockable variants. Explain the production plan and its corresponding MPS at the end product level and at the assembly level. Describe the revision of the MPS according to actual splitting of family demand as given by the FAS.


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).




Course section 7.2: Subsections and their intended learning outcomes

  • 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

    Intended learning outcomes: Present the conventional variant structure for a few, stockable variants. Explain the production plan and its corresponding MPS at the end product level and at the assembly level. Describe the revision of the MPS according to actual splitting of family demand as given by the FAS.

  • 7.2.2 Techniques for Product Families

    Intended learning outcomes: Present the super bill of material with option percentages x1, x2,…, xn. Describe the production plan and its corresponding MPS at the assembly level, using the example of a product family P with a number of variants in the order of the total demand quantity for the product family.

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