Return on investment from the use of product configuration systems – A case study

Katrin Kristjansdottir*, Sara Shafiee, Lars Hvam, Martin Bonev, Anna Myrodia

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

Product configuration systems (PCS) are increasingly being used in industrial companies to enable the efficient design of customized products. The literature describes substantial benefits that companies have achieved from the use of PCS, such as reduced resource consumption, reduced lead-time, improved quality, and increased sales, which should lead to a significant return on investment (ROI). However, there is little detailed quantification of the benefits, costs, and ROI from using PCS in the literature. Thus, the true value of PCS remains unknown. Hence, this study quantifies (1) the benefits in terms of reduced man-hours, improved quality of specifications, reduced lead-time, and increased sales and (2) the costs of development, implementation, and maintenance of PCS. Based on this, the ROI is calculated. The analyses presented in this study are based on a world-leading company in pump manufacturing. This study verifies the benefits of PCS that are described in the literature. Further, it contributes to the field by introducing a method to quantify the related benefits, costs, and ROI. Finally, the article illustrates how PCS can be used in companies having product portfolios consisting of a standard to engineered products.

Original languageEnglish
JournalComputers in Industry
Volume100
Pages (from-to)57-69
ISSN0166-3615
DOIs
Publication statusPublished - 2018

Keywords

  • Case study
  • Cost-benefit analysis
  • Information systems
  • Mass customization
  • Product configuration system (PCS)

Cite this

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title = "Return on investment from the use of product configuration systems – A case study",
abstract = "Product configuration systems (PCS) are increasingly being used in industrial companies to enable the efficient design of customized products. The literature describes substantial benefits that companies have achieved from the use of PCS, such as reduced resource consumption, reduced lead-time, improved quality, and increased sales, which should lead to a significant return on investment (ROI). However, there is little detailed quantification of the benefits, costs, and ROI from using PCS in the literature. Thus, the true value of PCS remains unknown. Hence, this study quantifies (1) the benefits in terms of reduced man-hours, improved quality of specifications, reduced lead-time, and increased sales and (2) the costs of development, implementation, and maintenance of PCS. Based on this, the ROI is calculated. The analyses presented in this study are based on a world-leading company in pump manufacturing. This study verifies the benefits of PCS that are described in the literature. Further, it contributes to the field by introducing a method to quantify the related benefits, costs, and ROI. Finally, the article illustrates how PCS can be used in companies having product portfolios consisting of a standard to engineered products.",
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author = "Katrin Kristjansdottir and Sara Shafiee and Lars Hvam and Martin Bonev and Anna Myrodia",
year = "2018",
doi = "10.1016/j.compind.2018.04.003",
language = "English",
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journal = "Computers in Industry",
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Return on investment from the use of product configuration systems – A case study. / Kristjansdottir, Katrin; Shafiee, Sara; Hvam, Lars; Bonev, Martin; Myrodia, Anna.

In: Computers in Industry, Vol. 100, 2018, p. 57-69.

Research output: Contribution to journalJournal articleResearchpeer-review

TY - JOUR

T1 - Return on investment from the use of product configuration systems – A case study

AU - Kristjansdottir, Katrin

AU - Shafiee, Sara

AU - Hvam, Lars

AU - Bonev, Martin

AU - Myrodia, Anna

PY - 2018

Y1 - 2018

N2 - Product configuration systems (PCS) are increasingly being used in industrial companies to enable the efficient design of customized products. The literature describes substantial benefits that companies have achieved from the use of PCS, such as reduced resource consumption, reduced lead-time, improved quality, and increased sales, which should lead to a significant return on investment (ROI). However, there is little detailed quantification of the benefits, costs, and ROI from using PCS in the literature. Thus, the true value of PCS remains unknown. Hence, this study quantifies (1) the benefits in terms of reduced man-hours, improved quality of specifications, reduced lead-time, and increased sales and (2) the costs of development, implementation, and maintenance of PCS. Based on this, the ROI is calculated. The analyses presented in this study are based on a world-leading company in pump manufacturing. This study verifies the benefits of PCS that are described in the literature. Further, it contributes to the field by introducing a method to quantify the related benefits, costs, and ROI. Finally, the article illustrates how PCS can be used in companies having product portfolios consisting of a standard to engineered products.

AB - Product configuration systems (PCS) are increasingly being used in industrial companies to enable the efficient design of customized products. The literature describes substantial benefits that companies have achieved from the use of PCS, such as reduced resource consumption, reduced lead-time, improved quality, and increased sales, which should lead to a significant return on investment (ROI). However, there is little detailed quantification of the benefits, costs, and ROI from using PCS in the literature. Thus, the true value of PCS remains unknown. Hence, this study quantifies (1) the benefits in terms of reduced man-hours, improved quality of specifications, reduced lead-time, and increased sales and (2) the costs of development, implementation, and maintenance of PCS. Based on this, the ROI is calculated. The analyses presented in this study are based on a world-leading company in pump manufacturing. This study verifies the benefits of PCS that are described in the literature. Further, it contributes to the field by introducing a method to quantify the related benefits, costs, and ROI. Finally, the article illustrates how PCS can be used in companies having product portfolios consisting of a standard to engineered products.

KW - Case study

KW - Cost-benefit analysis

KW - Information systems

KW - Mass customization

KW - Product configuration system (PCS)

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DO - 10.1016/j.compind.2018.04.003

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