05 Variant Management

Question 1

Variant Management (Definition)

Answer 1

Variant Management is the interface between the market-oriented department like sales, marketing and development on the one hand and the production-oriented departments like purchasing, logistics and production on the other.

Question 2

Goal of Variant Management

Answer 2

Show the market-oriented complexity (external complexity) in the internal processes in the best way, meaning cost- and resource-optimal -> Allow the minimization of internal complexity

Question 3

Task of Variant Management

Answer 3

Ensure the widest possible coverage of the target market through a suitable product differentiation or targeted product variation

Question 4

Complexity (Internal/External)

Answer 4

External Complexity: Market needs (customer demands)
 Results from the combination of market- and customer demands as well as legal guidelines and norms/standards
 Can be seen in the variety of the product program

Internal Complexity: Products (components and modules)
 Results form the fact, that internal added value processes have to respond to the variety of the product program
 Affects direct processes (e.g. production and assembly) and indirect processes (e.g. purchasing, logistics and development)

Question 5

Functional Complexity

Answer 5

Increasing demands on functionalities of products mean that more and more different functions have to be integrated into one product. -> Large number of components have to be coordinated and synchronized to fulfill the functions

Question 6

Product Programm Complexity

Answer 6

In order to serve a wide range of customers, it is increasingly necessary to offer not only standardized but also more exotic and specialized product versions. -> Product program needs to be steadily expanded, resulting in an increase in product program complexity

Question 7

Network Complexity

Answer 7

Increasingly complex products require a specialization of manufacturing companies to their core competencies. -> Vertical integration is reduced and specialist supplier products are used in end products
-> Supplier network is constantly expanding and must be controlled and managed accordingly

Question 8

Economic Optimum for the variant diversity of the product program

Answer 8

o In high wage countries, the control of complexity is not “nice to have” but an obligation
o Entrepreneurial goal: Identification of maximum net benefit of variant diversity
o The profit resulting from variant diversity increases degressively in general
o The costs resulting from complexity increase progressively in general
o Variant Management -> Continuous adjustment between optimum of advantage and disadvantage

EXAM! –> Abbildung in Zusammenfassung!

Question 9

Product Range Optimization

Answer 9

The aim of product range optimization is to achieve the best possible coverage of market requirements with a profitable product portfolio

Question 10

Feature Trees

Answer 10

Improve the transparency of the product variety that is requested by the market -> Display External Complexity

Question 11

Variant Trees

Answer 11

Support the optimization of the component variety and assembly processes -> Display Internal Complexity

Question 12

Feature Tree (Definition)

Answer 12

Visualizes the external complexity of the product program by showing the functional variety within the product program. It describes the product through variant-driving features and characteristics.

Question 13

Questions that the Feature Tree helps answering

Answer 13

• To which extent is the existing product program diversificated and inconsistent?
• Through which product features and characteristics does each variant distinguish itself from the others and are those differences really needed?
• How many units of each variant are sold?
• Which variants are sold very often, which ones rarely?
• Which product features and therefore variants can be eliminated or substituted?

Question 14

Possible Analysis based on the feature tree

Answer 14

 Change of variant variety through partly replacing, adding of new or eliminating old features
 Calculation of the probability of appearance of specific variants on the basis of sales forecasts (which helps to early identify not selling or rarely selling variants)
 ABC-Analysis based on realized sales (shows good and bad selling variants)
 Comparison of costs and prices

Question 15

Market Intelligence

Answer 15

• Helps to understand customer requirements
• Helps to identify homogeneous customer requirements and group them into market segments
  -> For these segments, preference variants must be determined and priced in line with specific market segments
  -> Planning of product variety based on market segmentation is supported by a competition and technology analysis  Variants emerge both because of market pull and technology push

Question 16

Communality Management - Different Levels of Commonality (lowest to highest)

Answer 16

• Requirement Commonality
• Functional Commonality
• Technology Commonality
• Physical Commonality

Question 17

Requirement Commonality

Answer 17

 Lowest level
 Equivalent requirements for products can be summarized
 Examples: Products need to comply with certain legal guidelines, perform certain functions, or comply with geometric constraints
 Many companies focus on customer needs  Requirement commonality

Question 18

Functional Commonality

Answer 18

Same functions can be summarized -> Anchored in functional structure in which the offered products can be classified

Question 19

Technology Commonality

Answer 19

 Describe the same technologies that are used in a product
 Example: Touch screen in smartphones

Question 20

Physical Commonality

Answer 20

 Highest level
 Almost identical product
 Example: Same touch screen for every smartphone model

Question 21

Goal of Commonality Management

Answer 21

the possibility of offering the greatest possible individual diversity at the overall plant level

Question 22

Aim of Standardization

Answer 22

The aim of standardization is not the standardization of complete machines/plants, but the definition of functional modules in order to derive standard scopes and the necessary variety of options.

Question 23

Commonality on different Product Levels

Answer 23

o Product Sequence: Carry Over Parts are maintained through various stages of development.
-> Example: Same door handles and windscreen wipers in Golf 6 & 7 -> Expenses for redevelopment and design can be avoided

o Product Program: Blocking creates communalities across different model series

Question 24

Variant Tree (Definition)

Answer 24

Provides a transparent view over the internal complexity of the product program that is offered on the market. It shows the creation of variants on different assembly levels, beginning with the single components that later add up to the complete product

Question 25

Questions that can be answered using the variant tree

Answer 25

 What effects does an integration of parts have on the variety along the assembly line?
 What conversions of the assembly line are possible or necessary, in order to move the point of variant-creation towards a better level?
 What impacts does the elimination of particular variants or features in the Feature Tree have on the part variety in the Variant Tree?

Question 26

Aim of the Variant Tree

Answer 26

Introduce variants as late as possible in the production process -> Try to move from a wide variant-tree to a narrow one that opens up at the end