Product Variety Impact on Bill of Materials Structure and Master Production Schedule Development

The great variety of offerings from companies engaged in mass customization such as in the automotive sector, implies millions of end products. As in the case of carmakers, this variety proceeds from the combination of dozens of optional or alternative components whereby thousands or even millions of end products can be obtained. A number of technical or commercial constraints prevent most combinations of alternative components (ACs). In these conditions, the creation and updating of the full set of the Bills of Materials corresponding to each end-product is extremely complex. Additionally, customers may not define their product requirements by specifying a list of alternative components because of the number of alternative components (including some entirely unknown to them) and their interdependence. For the purposes of our paper, such variety is taken for granted and our focus is the associated impact on Bills of Materials. In the past 25 years, scant research has been dedicated to Bills of Materials representation problems in this context. The most exciting ones use predicates to formalize combinatorial constraints between ACs and introduce a ‘generic Bill of Materials’ concept to avoid an exhaustive description of all end products. Additionally, product description for customer purposes was streamlined through a further concept – the set of alternative services (SAS). The idea of this new approach developed in this paper, is to describe the product based on its market features, before moving on to the actual AC combinations based on predicates for alternative services (ASs). We show how some carmakers successfully use the AS concept to support sales at configurator level and address operational production issues. Because ASs are also useful for sales forecasting purposes, the concept facilitates Master Production Schedule (MPS) preparation. Nevertheless, daunting methodological problems remain to be tackled in connection with drawing up MPSs beyond the frozen horizon: first, owing to forecasting problems in connection with combinations of interdependent ASs and also because of longer lead times resulting from globalization.