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

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.



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.

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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.

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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 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.