Component Commonality and Its Cost Implications - Increasing the Commonality of the Right Components

Jouni Lyly-Yrjänäinen, Petri Suomala, Poul Israelsen

Publikation: Konferencebidrag uden forlag/tidsskriftPaper uden forlag/tidsskriftForskningpeer review


Component commonality (Labro 2004, Zhou & Gruppström 2004) can be defined as the use of the same version

of a component across multiple products. It is usually seen as a means to manage costs without sacrificing

product variety. However, when managing costs with component commonality, the managers should be able to

identify rather rapidly which group of components would enable the most significant cost reductions.

Unfortunately, the existing literature lacks profound discussion of how to identify the right components for

increased component commonality. The objective of the paper is to discuss how to identify those components

that would most benefit from increased component commonality. The paper is based on an action research

project with a company that manufactures hydraulic power units.

Hydraulic power units are usually customized products and, hence, engineered to order. Customized hydraulic

systems mean that the steel constructions of such product also need to be customized. These steel constructions

are needed in the assembly first; yet, at the same time, they cannot be designed until all the components of the

power unit have been defined. Thus, the mechanical engineering of these steel constructions was identified as the

most important bottleneck for the delivery process causing many indirect costs, especially with respect to

project-management-related activities. Interestingly, by eliminating the need for mechanical engineering, the

context starts to approach assembly-to-order context, also resulting in significant cost reductions. Thus, in order

to achieve best results in engineering-to-order contexts, component commonality should mainly be focused on

non-expensive but customized bottle-neck items.

Antal sider17
StatusUdgivet - 2010
BegivenhedSixteenth International Working Seminar on Production Economics - Innsbruck, Østrig
Varighed: 1 mar. 20105 mar. 2010
Konferencens nummer: 16


KonferenceSixteenth International Working Seminar on Production Economics



Lyly-Yrjänäinen, J., Suomala, P., & Israelsen, P. (2010). Component Commonality and Its Cost Implications - Increasing the Commonality of the Right Components. Afhandling præsenteret på Sixteenth International Working Seminar on Production Economics, Innsbruck, Østrig.