Lars Hvam and Niels Henrik Mortenson head up the Centre for Product Modeling at the Technical University of Denmark's Department of Manufacturing Engineering and Management. At the MIT Smart Customization Seminar, they presented several compelling case studies of smart customization in action among their clients. These are all major B2B manufacturers who have been applying the principles of smart customization and modular design of product lines and business processes for several years.
These cases are covered in more detail in their recently published book, Product Customization.1 One of the most detailed accounts that Lars and Niels presented included highlights from American Power Conversion.
The Importance of a Product Variant Master
Niels Henrik Mortensen and Lars Hvam described how American Power Conversion created a streamlined modular product
line by mapping out the current product assortment and processes and then simplifying
Dramatic Reduction in Lead Times by Moving from Engineering to Configuration
American Power Conversion (APC) is a multibillion dollar provider of complete power management systems for data centers, access providers, business networks, and home/small office.
It used to take APC 18 months to design, configure, and deliver the power management infrastructure for a data center for on-site assembly. Today, the company's 35,000 customers receive (or generate) a quote in less than an hour. The lead time for delivery of a complete infrastructure system for a large data center has been reduced from 400 days to 16 days! Since the systems arrive pre-assembled, on-site installation and integration has also been dramatically reduced.
Customers and technical consultants no longer engineer these complex solutions; they configure them. American Power Conversion's configuration and ordering systems are used by more than 10,000 sales engineers and dealers worldwide as well as by the majority of APC's customers.
APC manufactures standard modules in the Far East (power supply, air conditioning, cabling). All of these modules are mass produced. "The manufacturing is planned and executed based on the product and manufacturing specifications generated in the configuration systems," they explained. Most systems are then pre-assembled in one of APC's 15 assembly distribution centers around the world.
1) Lars Hvam, Niels Henrik Mortensen, Jesper Riis. Product Customization. Springer, 2008