Reconfiguration flexibility

Reconfiguration is the ability to change a product’s specification as it progresses along the planning pipeline through to completed manufacture. Depending on the point the product has reached the consequence of reconfiguring it could be no more than the future production plan being amended, or it could mean that components that have been made already must be stored or scrapped and a replacement set sourced or manufactured, or it could mean that a part or module that has been fitted to a product is removed and swapped with another from a stand-by stock that is held in readiness for such a situation.

The cost of reconfiguring a product can be expected to be dependent in part on pipeline position. This cost component can be plotted against pipeline position as a reconfiguration cost curve. Four signature reconfiguration cost curves can be envisaged (Figure A):

• Decoupled: a feature or product starts as generic but then at a point along the process becomes a specific variant, after which the cost of changing the specification is high;
• Gradual: as a feature or product progresses along the pipeline the cost of changing the specification increases steadily;
• Ingredient: from an early point along the pipeline the cost of changing the specification is high which can be due to the identity of the product being strongly dependent on its constituents and having low commonality with other variants in the product range;
• Postponed: not until late in the pipeline does the cost of specification change become significant.

If a product is constructed from several features, their reconfiguration cost curves can be independent, especially if the supply resources necessary for their realisation are separate and independent. Consequently one feature can have a ‘postponed’ shape and another feature an ‘ingredient’ shape, while another has a ‘gradual’ shape, and so on.

Figure A: Four Signature Reconfiguration Cost Curves

The component of reconfiguration cost represented by the reconfiguration cost curve may be viewed as a direct cost that is incurred only when a product is reconfigured. There is a second component of reconfiguration cost – the fixed cost of investing in the flexibility to enable reconfiguration. The two cost components can be expected to be closely related, i.e. the greater the investment in flexibility, the lower will be the direct cost (Figure B). The objective of an enterprise is neither to over-invest nor under-invest in resources to enable reconfiguration. For example, it would be undesirable if an enterprise reduced the cost of reconfiguration through investment, only for the sales function to persuade customers to compromise on their specification. In the same vein, if the cost of reconfiguration is high it would be inadvisable for a customization service to be over-played to customers.

Figure B: Conceptual relationship between reconfiguration direct costs and investment in flexible resources

	Brabazon, Philip G. and MacCarthy, Bart L. (2004) Virtual-Build-to-Order as a Mass Customization Order Fulfilment Model. Concurrent Engineering Research and Applications, 12 (2). pp. 155-165
	Manufacturing Engineer article: Giving Customers the Car they Want