Abstract
This chapter suggests a systematic framework for identifying potential areas, where Engineer-To-Order (ETO) companies may increase their profitability by implementing a Product Configuration Systems (PCSs). In order to do so, a three-step framework is proposed based on literature. The starting point is to conduct a profitability analysis to determine the accuracy of the cost estimations, and based on that the reason for the deviations across different projects is found. The next step is to generate the scope for different scenarios that aim to improve the current situation. Finally, it is suggested to make a cost-benefit analysis for different scenarios to determine where a PCS can provide the most benefits. This chapter is supplemented with a case study from an ETO company where potential areas for using PCS were found by applying the suggested framework.
References
Hvam, L., Mortensen, N.H., Riis, J.: Product Customization. Springer, Berlin (2008)
Felfernig, A., Friedrich, G.E., Jannach, D.: UML as domain specific language for the construction of knowledge base configuration system. Int. J. Software Eng. Knowl. Eng. 10, 449–469 (2000)
Zhang, L.L.: Product configuration: a review of the state-of-the-art and future research. Int. J. Prod. Res. 52, 6381–6398 (2014)
Forza, C., Fabrizio, S.: Managing for variety in the order acquisition and fulfilment process: the contribution of product configuration systems. Int. J. Prod. Econ. 76, 87–98 (2002)
Mortensen, N.H., Hvam, L., Boelskifte, A., Hansen, C.L.: Making product customization profitable. Int. J. Ind. Eng. Theory Appl. Pract. 17, 25–35 (2010)
Aibinu, A.A., Pasco, T.: The accuracy of pre‐tender building cost estimates in Australia. Constr. Manage. Econ. 26, 1257–1269 (2008)
Akintoye, A.: Analysis of factors influencing project cost estimating practice. Constr. Manag. Econ. 18, 77–89 (2000)
Cooper, R., Kaplan, R.S.: Measure costs right: make the right decisions. Harvard Bus. Rev. 66, 96–103 (1988)
Walker, M.: ABC using product attributes. Financ. Manag. 69, 34 (1991)
Kaplan, R., Anderson, S.R.: Time-Driven Activity-Based Costing: A Simpler and More Powerful Path to Higher Profits. Harvard Business Press, Boston (2013)
Zhang, M., Tseng, M.M.: A product and process modeling based approach to study cost implications of product variety in mass customization. IEEE Trans. Eng. Manag. 54, 130–144 (2007)
Barker, V., O’Connor, E., Bachant, D.E.: Expert systems for configuration at Digital: XCON and beyond. Commun. ACM 32, 298–318 (1989)
Fleischanderl, G., Friedrich, G.E., Haselböck, A., Schreiner, H., Stumptnerm, M.: Configuring large systems using generative constraint satisfaction. IEEE Intell. Syst. 4, 59–68 (1998)
Hvam, L.: Mass customisation of process plants. Int. J. Mass Customisation 1, 445–462 (2006)
Petersen, T.D.: Product configuration in ETO companies. In: Blecker, T. (ed.) Mass Customization Information Systems in Business, pp. 59–76. Igi Global, London (2007)
Farris, P.W., Bendle, N.T., Pfeifer, P.E., Reibstein, D.J.: Marketing Metrics: The Definitive Guide to Measuring Marketing Performance. Pearson Education, Upper Saddle River (2010)
Myrodia, A., Hvam, L.: Managing variety in configure-to-order products—an operational method. Int. J. Eng. Industr. Manag. 5, 195–206 (2014)
White, S.A.: Process modeling notations and workflow patterns. In: Fischer, L. (ed.) Workflow Handbook 2004, pp. 265–294. Future Strategies, Lighthouse Point (2004)
Shafiee, S., Hvam, L., Bonev, M.: Scoping a product configuration project for engineer-to-order companies. Int. J. Industr. Eng. Manag. 5, 207–220 (2014)
Messonnier, M., Meltzer, M.: Prevention Effectiveness: A Guide to Decision Analysis and Economic Evaluation. Oxford University Press, Oxford (2003)
Ariano, M., Dagnino, A.: An intelligent order entry and dynamic bill of materials system for manufacturing customized furniture. Comput. Electr. Eng. 22, 45–60 (1996)
Andreasen, M.M.: Integrated Product Development. Springer, Berlin (1987)
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 2.5 International License (http://creativecommons.org/licenses/by-nc/2.5/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.
The images or other third party material in this chapter are included in the chapter's Creative Commons license, unless indicated otherwise in a credit line to the material. If material is not included in the chapter's Creative Commons license and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder.
Copyright information
© 2017 Springer International Publishing Switzerland
About this paper
Cite this paper
Kristjansdottir, K., Hvam, L., Shafiee, S., Bonev, M. (2017). Identification of Profitable Areas to Apply Product Configuration Systems in Engineer-To-Order Companies. In: Bellemare, J., Carrier, S., Nielsen, K., Piller, F.T. (eds) Managing Complexity. Springer Proceedings in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-29058-4_27
Download citation
DOI: https://doi.org/10.1007/978-3-319-29058-4_27
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-29056-0
Online ISBN: 978-3-319-29058-4
eBook Packages: Business and ManagementBusiness and Management (R0)