Product Portfolio Restructuring: Methodology and Application at Caterpillar

• 成果类型: Article
• 署名作者: Shunko, Masha; Yunes, Tallys; Fenu, Giulio; Scheller-Wolf, Alan; Tardif, Valerie; Tayur, Sridhar
• 署名单位: University of Washington; University of Washington Seattle; University of Miami; Caterpillar Inc; Carnegie Mellon University
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• DOI: 10.1111/poms.12786
• 发表日期: 2018
• 页码: 100-120
• 关键词: line design; OPERATIONS; IMPACT; variety

摘要

We develop a three-step methodology to restructure a product line by quantifying the restructuring's likely effects on revenues and costs: (i) Constructing migration lists to capture customer preferences and willingness to substitute; (ii) Explicitly capturing the (positive and negative) cost of complexity across different functional areas, using statistical analysis of cost data; and (iii) Integrating these tools within a mathematical optimization program to produce a final product line, incorporating the possibility of differentiating products by lead-time (into different lanes). Our methodology is highly flexibleeach step can be tailored to a company's particular setting, data availability and strategic needs, so long as it produces the necessary output for the next step. We report on the successful application of our methodology to the Backhoe Loader product line at Caterpillar: In collaboration with Caterpillar, we were able to significantly simplify this line, reducing the number of configurations from 37,920 to 135, in three lanes, while increasing sales by almost 7%.