Developing product configurators for use in a multinational industrial goods company
Leaders for Global Operations Program.
Donald Rosenfield and Josef Oehmen.
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As multinational industrial goods companies (MNCs) selling low-volume high-complexity products move into markets across the globe, they develop an operations strategy to provide a product tailored to local markets, often also engineered and manufactured in that local market. As MNCs seek to provide more customization to their customers, they face issues with the resulting complexity of operations, leading them to pursue mass customization, i.e. providing variety at low cost through configurable products. An important step in this product strategy is the introduction of product configurators, i.e. software tools that permit the automatic or semiautomatic configuration and pricing of product variants. Through streamlining the specification and bidding process, product configurators lower process time and therefore also lower costs in both sales and engineering functions. However, difficulties arise in developing a product configurator for a global company operating in many different localized markets. This study develops a framework for multinational companies to first evaluate the needs of their overseas divisions for a product configurator and second identify the gaps between the global and local product configuration and pricing. The objective of the framework is to provide a unified, centrally managed product configurator that provides the ability to tailor product options to specific local needs. A case study of a power electronics multinational with 9 overseas locations is performed. Interviews of key stakeholders in the head office and in the overseas division provide preliminary indication of differing product configurator design requirements from country to country. A deep dive is performed using the framework into two of its oversea divisions, Canada and Brazil. The study reveals key differences in the product feature requirements, in costing products due to local labor costs, part costs and import taxes, in the pricing process due to margin structures and sales incentives and in usage patterns due to language, local technical terminology and collaboration modes between sales and engineering. Using survey techniques, prioritization of the configurator functionality requirements is determined. Combined with an organizational analysis of the company, an integrated implementation plan is developed to permit identification of solutions in conjunction with roll-out to the international organization.
Thesis (M.B.A.)--Massachusetts Institute of Technology, Sloan School of Management; and, (S.M.)--Massachusetts Institute of Technology, Dept. of Mechanical Engineering; in conjunction with the Leaders for Global Operations Program at MIT, 2013.Cataloged from PDF version of thesis.Includes bibliographical references (p. 83-84).
DepartmentSloan School of Management.; Massachusetts Institute of Technology. Department of Mechanical Engineering.; Leaders for Global Operations Program.
Massachusetts Institute of Technology
Sloan School of Management., Mechanical Engineering., Leaders for Global Operations Program.