Customer-Specific Product Variants as Standard – Just a Pipe Dream?

Steinbeis supports medical equipment companies with the development of a modular product and production concept

Ondal Medical Systems is a medium-sized producer of medical equipment based in Hünfeld, northeast of Frankfurt. The company manufacturers pendant systems for large hospital suppliers. These systems are designed to carry a variety of medical devices. The customers often demand customizable solutions for their products to differentiate themselves from the competition. As the number of product variants grows, meeting expected delivery times becomes an ever-greater challenge. The Steinbeis Transfer Center for Management – Innovation – Technology recently supported the company by developing a modular product and production concept for a new product portfolio. The company pins its hopes on hitting its growth targets with the new group of products.

When the time came to develop the next generation of the company’s core products from their central axis product range and spring arms, one of the key requirements outlined in the briefing document was the development of a platform to serve as the basis for the various product modules that would also have to be developed. As the product manager at Ondal Medical Systems emphasizes: “The most important requirement mentioned by our sales colleagues was not to limit the perceived number of product variants for our clients but to increase the number so we could secure more market share.” This aim led to quite a dilemma: offer enough variety to external parties – that is, offer the customer utmost product diversity – but at the same time reduce variety internally (variants numbers in the company). This should help the company deliver on an important customer promise: quicker deliveries and improved product availability.

The ideal solution seemed clear from the start: the new central axis units and spring arms should be made up of as many standard components and modules as possible, just like in a LEGO set. If a given customer places an order, these could then be customized by adding a handful of customer-specific components. The advantage? Production and logistics should be able to create the specific customer variant relatively late in the production process, thus exploiting the benefits of pre-assembled components, shorter warehousing times, and faster reaction times. The project team would have to include representatives from all of the involved departments to meet sometimes conflicting aims. Support was offered by the experts from the Steinbeis Transfer Center for Management – Innovation – Technology.

The new design is based on the principles of toolkit development. To some extent, this meant rethinking the way things were designed in the past. “Sometimes individual components have to be equipped with more features than an individual customer actually requires – but that means a component can be produced independent of actual orders, so in some cases this drastically reduces indirect costs,” reports Ondal project manager Sebastian Timm, “but this advantage isn’t always immediately apparent, since it is difficult to measure.”

A good way to illustrate this is to take a simple example based on the variant hierarchy that is created if this method is used. Variant hierarchies provide a good overview of how a product variant is developed by using design principles that allow various features (the so-called variant drivers) to be combined as the product is assembled. The aim is to create the variant as late as possible in assembly, that is, to keep it as neutral as possible for as long as possible throughout the production and logistics processes. The success of these design principles has been enough to convince even the most skeptical critics. Originally there were 49 different joints, now there are only three – without the slightest loss in functionality. The process was just as successful with slip rings: just 4 instead of 35.

But this is certainly not the end of the project. “Many companies still believe that all you need to solve the problem of variant diversity is a new product architecture – but that’s only half of the equation,” says Prof. Dr. Günther Würtz, director of the Steinbeis Transfer Center for Management – Innovation – Technology. “Without changing the entire value chain – including suppliers – it is only possible to achieve a fraction of the potential productivity enhancements.”

This is something they had already realized at Ondal. That’s why a new production concept is also being developed to match the new design concept. This is based on a clear focus on value flows in the organization, or rather, a holistic optimization of assembly processes, material flows, and information flows with a strict regard for customers in order to meet targets in terms of delivery times and product availability. “The core principle of a variant-optimized value flow lies in letting the variant drivers flow into the production process as far down the line as possible – at best, directly before delivery,” Günther Würtz says to explain the basic principle. “This means that the value-adding can be independent of the customer order for as long as possible and so the process is less prone to interruptions. This is impossible without the right design concept.”

It’s important to note that variant management is not just a one-off exercise. New product needs come along throughout the entire product life cycle. The skill is to know how to handle these new requirements because variant management does not mean there are no more new variants or changes once the project is finished. The most methodical way to deal with this is to take out an old variant if a new one comes along. This principle helps keep the number of variants from growing, but it overlooks a very important issue in variant management: the costbenefit ratio. This brings financial factors into play. If a new variant makes sense in financial terms beyond the existing design phase and into production, it makes sense to introduce it. Ondal sees the variant-based development of their new product generation for central axis units and spring arms as a complete success. The company not only presented its new product at the latest leading trade show, but they also shot a brief movie to highlight the project and give customers deeper insights into their new processes. “We got a lot of positive feedback,” says Swen Heimeroth, development manager at Ondal. “Our customers not only welcomed the fact that we will continue to meet their needs for the highest possible product diversity – external variety – but also that our modular products will mean we can offer better delivery terms. And we will also gladly continue to offer our customers specialized solutions – but under different terms and conditions than our standard products.”

Ondal will have to do a bit of homework before the next product family is overhauled along similar lines. The toolkit will need to be entered into the variant configurator, further work is needed on the value flow principle in production, and much more. “But we will continue to use variant management” – that’s the unanimous opinion of the project team, as Sebastian Timm rather proudly summarizes.

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