Bottom-up Component Rationalisation using a Dynamic Sharing Matrix

Today, many companies spend a lot of resources developing and delivering products tailored to customers’ needs. This strategy of product proliferation has a huge effect on the complexity of the companies’ product portfolios, with an aspect of this being the management of the supply chain and inventory of the components used in the products.

This paper addresses this challenge by proposing a tool to reduce the number of component variants used in the product portfolio by creating an overview and proposing possible replacement components. The tool has been developed with smaller components in mind, as these are often overlooked as being insignificant, even though they can pose significant challenges for inventory management and cause delays in lead time if not in stock.

The general approach for the method is to gather the available data from within a company, and then start by analysing one type of component by setting up the matrices described to find possible replacement components. The process can then be expanded to other types of components, gradually, to increase the effect within the company.

The process has been employed in an engineer-to-order company that makes district heating units with a high degree of customisation. The focus here was put on different brass components, like tees and other fittings, which we classify as smaller components. This work has drastically improved the overview of brass components within the company to help in the development of new products.

The process is, at the time of this writing, still in progress, but initial estimates suggest that about 40% of the variants of brass components can be eliminated or replaced by other components, without affecting the functionality of the products being sold. © Proceedings of NordDesign 2022: How Product and Manufacturing Design Enable Sustainable Companies and Societies.