=Paper=
{{Paper
|id=Vol-2467/paper-09
|storemode=property
|title=Comparing the Gained Benefits from Product Configuration Systems
|pdfUrl=https://ceur-ws.org/Vol-2467/paper-09.pdf
|volume=Vol-2467
|authors=Sara Shafiee,Lars Hvam,Anders Haug
|dblpUrl=https://dblp.org/rec/conf/confws/ShafieeHH19
}}
==Comparing the Gained Benefits from Product Configuration Systems==
https://ceur-ws.org/Vol-2467/paper-09.pdf
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Comparing the Gained Benefits from Product
Configuration Systems Based on Maintenance Efforts
Sara Shafiee1, Lars Hvam and Anders Haug
Abstract.1 Product Configuration Systems (PCSs) are automatic associated with PCS projects [5], [10]. Such studies are, however,
solutions to support and facilitate sales and engineering processes. often relatively undetailed or unspecific about the costs and
PCSs are among the most successful applications of expert system benefits of such projects. Thus, although the literature provides a
technology and one of the drivers in the digitalization era. variety of methods to support the development and implementation
Therefore, there are several studies on the benefits of PCS. Such
of product configurators, it remains unclear how to estimate the
studies are, however, often relatively undetailed or unspecific
about the costs and benefits of such projects. To address this issue, costs and benefits for different scenarios [9]–[11].
this paper presents studies of four PCS projects, which quantify To harvest the benefits of a PCS, great efforts and investments
benefits in terms of reduced working hours, and the costs in terms must be undertaken [5]. In this context, some research point to a
of development, implementation, and maintenance costs. The lack of PCS maintenance as the main reason for project failure
studies of the PCS projects each concern a 3-year utilization [10], [12]. The maintenance process in PCS involves constantly
period. Our results show that the gained benefits from PCS has a updating the PCS knowledge base and being responsive to
growing trend over the years in case of proper maintenance. We including alternative requirements [12].
also demonstrate the opposite is the case if not properly The research presented in this paper uses a case company to
maintaining the PCSs. Furthermore, the study reveals that PCSs investigate the financial consequences of not maintaining a PCS
with the constant maintenance grow increasingly popular (i.e., use
properly by comparing four of its projects. The aim is to evaluate
frequency) over time, while PCSs with poor maintenance decrease
in popularity. the trend of the gained benefits from PCS during the years after
development. Here, it is the assumption that PCS projects benefits
from proper and constant maintenance and updating in the years
1 INTRODUCTION after implementation [12]. This study also sets out to generalize
based on these findings concerning how the profitability of the
Customers have become accustomed to having products PCS projects in the years after development can be forecasted.
customized to their personal needs while retaining the price With the aim to investigate these effects, the following
associated with mass production [1]. Here, Product Configuration propositions are developed:
Systems (PCSs) can facilitate sales and production processes for Proposition 1. A PCS project will increase popularity and
customized products at prices comparable to mass produced [2]. produce greater benefits in the years after development in case of
PCSs affect the company’s ability to increase the accuracy of the continuous maintenance and updating.
cost calculations in the sales phase, consequently increasing the Proposition 2. A PCS project will lose popularity and benefits
efficiency of sales and engineering process [3]. PCSs are in the years after development in case of not employing continuous
developed through describing information about product features, maintenance and updating.
product structure, production processes, costs and prices in their To achieve this, we calculate the costs and benefits of four
knowledge bases [3]. PCSs support decision-making processes in different projects during their last 3-years. In this context, we focus
the product engineering and sales phases by determining important on the saved man-hours in the calculation of benefits in the four
decisions regarding product features and offering users information PCS projects. Then, we compare the yearly benefits from each
about product designs and costs [4], [5]. project to illustrate any trend of change during the 3-years. Finally,
PCSs can bring substantial benefits to companies such as, based on the knowledge in the literature and our research
shorter lead time for generating quotations, fewer errors, increased propositions, we demonstrate the results using graphs and discuss
ability to meet customers’ requirements regarding product the findings.
functionality, use of fewer resources, optimized product designs,
less routine work and improved on-time delivery [3], [6]–[8].
Although advantages of PCSs are evident, there are still some
2 RELATED WORKS
difficulties associated with required high investment [3], [9] and The relevant literature was reviewed to clarify the present study’s
the high chances of failure [10]. Hence, researchers have provided position in relation to existing research. This allowed us not only to
empirical data from case studies to better understand the ascertain whether this research has the potential to add to the
advantages, challenges, failure causes, expectations and risks existing knowledge but also to identify which parts of the available
knowledge are relevant to define the study’s scope. In this section,
1
the relevant literature on calculating the PCS cost- benefits and
Mechanical Engineering Department, Technical University of Denmark,
Denmark, email: sashaf@dtu.dk PCS complexity is reviewed and subsequently utilized for
ﻳﺎﻫﻮ
Copyright © 2019 for this paper by its authors. Use permitted under Creative Commons License Attribution 4.0 International (CC BY 4.0).
ﻳﺎﻫﻮ
calculating the ROI (return on investment) and PCS complexity in collaboration) cards) [8], [24]. Other studies report that one the
four cases of this study. The importance of constant maintenance of main reason for the PCS projects failure is the lack of the proper
PCS projects and its influence on PCS projects’ profitability is also documentation and maintenance [10]. In other words, not
investigated. Finally, PCS complexity and complexity performing maintenance and updating tasks can have significant
measurements are discussed. negative consequences [25], [4], [26], [27].
The economic implications of the maintenance of data
repositories can be examined in terms of costs and benefits [28].
2.1 Cost benefit analysis for PCS The results of such analyses indicate that although the cost of
Several studies have addressed the cost factors of PCSs. Forza and maintaining a PCS can be relatively high, it cannot be ignored as it
Salvador [7] mentioned that a large investment in terms of man- risks wasting the investment. Hence, economic and business
hours may be needed to implement a PCS. Hvam [13] reported that benefits can justify the maintenance costs, as continuous updates of
in one case, the cost of developing and implementing a PCS in a the PCS are needed to ensure the accuracy and timeliness of the
large ETO companies was approximately USD 1 million, with configuration data.
operating costs of USD 100,000 per year. These costs are
compared to the usage of the system, which is estimated in order to
2.3 Complexity analysis for PCS
generate a budget and detailed quotations, according to which the
total sales price is USD 200 million [11]. Haug et al. [14] elaborate Complexity is one the most discussed challenges in software
on how man-hours in the configuration process can be reduced by development and maintenance [16], [29]. In PCS projects, the
up to 78.4%. Moreover, Hvam et al.’s [15] study indicates that complexity of PCS is associated directly with the complexity of
after utilization of PCS at the case company, the lead time required targeted products. As PCS complexity increases, the task of
to generate an offer was reduced by 94–99%. The reduction can be maintaining the PCS becomes more challenging and costly [30].
traced to automation of routine tasks and elimination of the To measure the complexity of PCSs, Brown et al. [31] defines
iterative loops between domain experts, as PCS makes all product three major complexity dimensions; 1) execution complexity, 2)
knowledge available [16]. Three main types of benefits are parameter complexity, and 3) memory complexity. Execution
mentioned in the literature [9]: (1) time reduction (man-hours and complexity covers the complexity involved in performing the
lead time), (2) product specification quality improvement and (3) configuration actions that make up the configuration procedure,
sales increase. while the memory complexity refers to the number of parameters
Costs of configurators has also been discussed [7], [13] and they that system manager must remember. In this paper, we measure the
include software licenses (the cost of buying the software and complexity involved in the knowledge that domain expert provides
annual licenses) as well as internal and external man-hours for during the creation of the configuration model [31], which could
modelling, programming, and implementing the configurator. The also be an indicator of the product complexity leading to the PCS
costs consist partly of the initial costs of making the configurator complexity. Therefore, we assess the parameter complexity in
and partly of the annual costs of maintaining and operating it [17]. terms of two major PCS knowledge base characteristics: attributes
However, there are still some hidden costs, such as the time needed and constraints (Table 1).
for people to learn and use the system – costs that, however, can be
measured as man-hours [18]. Table 1. Complexity assessment in terms of parameters in PCS [12]
No. attributes No. constraints
Low complexity 500 - 1300 200-800
2.2 Documentation and maintenance of PCSs Medium complexity 1300-2000 800-1200
High complexity >2000 >1200
One of the main challenges when using PCSs concerns a lack of
documentation, which can lead to incomplete and outdated systems
that are difficult to understand [19], [20]. For a company using a In this paper, we measure the complexity of each PCS projects as
PCS, it is therefore crucial to have an efficient system for sum of attributes and constraints. The complexity is highlighted as
documenting the structure, attributes, and constraints modelled one of the main the background information on PCS projects as the
within the system, as well as to facilitate communication between higher complexity dictates the higher effort in development and
PCS developers and domain experts [12]. Documentation is a vital maintenance tasks for PCS projects.
part of all IT projects, as it is used for sharing knowledge between
people and reducing knowledge loss, when team members become 3 RESEARCH METHODOLOGY
inaccessible [10], [21], [22]. The documentation of PCS includes
modelling, maintaining and updating the product model, and Different research has employed cost-benefit analysis for PCSs
storing all information related to the products’ attributes, using different cost factors such as the saved man-hours, increased
constraints and rules in the PCS [4]. sales, improved quality and reduction in errors and defects. To
Studies of companies using configurators have revealed that, date, there is little research that investigates the trends of cost-
without a planned systematic approach, companies are unable to benefits in PCS projects over time to estimate the changes in
develop and maintain their configurators [20]. Modelling profitability considering different variants. The number of research
techniques are used as documentation tools alongside the task of papers providing detailed data from real case projects are also
communication and validation of product information [16], [23]. limited. Thus, a explorative approach was employed in the form of
Research supports the modelling process by adding software a case study approach.
support and integrating these different modelling techniques (PVM The company selected for case studies produces highly
(product variant master) and CRC (class-responsibility- engineered products and technology. More specifically, studies of
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four configurator projects were carried out at a large Danish ETO choosing man-hours is the ease of access to these data, as well as
company, which produces chemical processing systems. The case the uncertainty related to other factors – as, for example, increased
company was chosen because it: sales and improved product quality, which could be results of other
factors than the PCS. The number of saved man-hours before and
offers highly engineered and complex products; after using the configurator and the gained benefits based on the
saved man-hours are calculated for the last 3-years. The total costs
had recently implemented PCS projects – including
of each project is calculated based on the development,
projects with frequent and more sporadic maintenance
implementation and the yearly running costs (such as licenses and
efforts;
maintenance activities) for the last 3-years.
had measured/estimated costs and benefits of PCS Analyzing the costs and benefits from the last 3 years at the
projects over the last three years; and case company allows us to benefit from the use comparative
offered a unique level of access to project data. multiple case study method [32], [33]. Case-based research seeks
to find logical connections among observed events, relying on
The reason for choosing one case company for the four studies of knowledge of how systems, organizations, and individuals work
PCS projects was to provide the in-depth data analysis and be able [33], [34]. Furthermore, case studies provide researchers with a
to observe the changes in benefits over time, while keeping many deeper understanding of the relations among the variables and
external factors (such as organizational culture, IT department and phenomena that are not fully examined or understood [35], for
PCS software shell) as fixed as possible. instance, the impact of the proper maintenance of the PCS projects
ETO companies normally engineer the products with high on the gained and constant benefits increase during the years.
complexity based on customer request. Hence, we chose the case
projects with the most complex products. The initial criteria for
choosing the four projects were: 4 CASE STUDIES
Table 3 illustrates all the figures related to the gained benefits
maximum similarities between the four PCS project
based on saved man-hours for each project during the first year
contexts to keep external factors constant;
including development. All the costs are in Danish Kroner.
differences in costs and benefits;
Table 3. Calculation of the total benefits in DKK based on the saved man-
similar users (engineers);
hours in the first year of development
different PCS use frequency (number of generated
(just based on saved
Benefit per quote in
hours (saved man-
quotes); Number of quotes
Total benefit per
(development +
maintenance +
Case Studies
configurator
man-hours)
Total Costs
through
per year
licenses)
two projects with continuous maintenance and two with
hours)
year
limited maintenance during the last three years;
same IT team and the involvement of similar tasks during
development and maintenance;
Case 1 240 10,3 987.840 527.000
similar software platform and integrations. Case 2 295 1 118.000 157.000
Case 3 200 2 160.000 565.000
Case 4 270 0,5 54.000 437.000
All the PCS projects focused on sales process automation in
situations where generated quotations were not significantly The calculation of the total benefits in Table 4 illustrates all the
affected by market fluctuations, depended on the requests from the figures related to the gained benefits based on saved man-hours for
customer. Here, the company experts generate the quotes from the each project during the second year. For the second year, we only
sale PCS in order to offer the price and all the specifications to the calculated the maintenance costs and license costs (only for users),
customer based on his/her requirements. Cases 1 and 2 received as there was not any development, but only maintenance.
continues proper maintenance during the last three year; while
cases 3 and 4 has been rarely updated. Table 2 shows information Table 4. DKK based on the saved man-hours in the second year after
related to the four selected PCS projects. The complexity ratio on development
different projects indicates the task of maintaining the PCS as the
Benefit per quote in
hours (saved man-
higher complex projects require more challenging and costly
Number of quotes
saved man-hours)
Total benefit per
(maintenance +
(just based on
Case Studies
configurator
maintenance tasks.
Total Costs
through
per year
licenses)
hours)
year
Table 2. Background information on case studies
Complexity of the configurator (sum of
Case Studies
attributes and constraints)
Case 1 High = 3400 Case 1 380 10,3 1.560.000 136.000
Case 2 310 1 124.000 70.000
Case 2 Medium = 2100
Case 3 80 2 64.000 40.000
Case 3 Medium = 1850 Case 4 150 0,5 30.000 70.000
Case 4 Low = 790
Table 5 illustrates all the figures related to the gained benefits
In this paper, we focus only on saved man-hours as our benefits based on saved man-hours for each project during the third year.
measure when comparing the four projects. The reason for Again, for the third year, we only calculated the maintenance costs
ﻳﺎﻫﻮ
ﻳﺎﻫﻮ
and licenses costs (only for users), as there was not any Moreover, as the benefits of the projects increase, there is a
development, but only maintenance for case 1 and 2, while not for trend of decrease in the total costs of the projects per year. As
case 3 and 4. illustrated in Figure 2, for cases 1 and 2, the cost in year 1 includes
The numbers in Table 3-5 show a positive trend towards higher development cost based on the man-hours spent on development,
number of generated quotations and higher benefits for the case while in years 2 and 3, there will be just minor updates and
PCS projects with continues maintenance effort. It also maintenance. For Cases 3 and 4, the maintenance efforts are just
demonstrates the negative trend in both cost and benefits for the the costs paid for licenses, after which they decrease significantly.
PCS project with no maintenance efforts. The results demonstrate
that the rate of using the PCSs increases over time if the system is 600.000
maintained and updated.
500.000
Table 5. Calculation of the total benefits in DKK based on the saved man-
400.000
hours in the third year after development
Yearly costs
300.000
(just based on saved
Benefit per quote in
hours (saved man-
Number of quotes
Total benefit per
(maintenance +
200.000
Case Studies
configurator
man-hours)
Total Costs
through
per year
licenses)
hours)
year 100.000
0
Case 1 Case 2 Case 3 Case 4
Total Costs in first year (development + maintenance + licenses)
Case 1 422 10,3 1.736.000 115.000
Total Costs in second year (maintenance + licenses)
Case 2 320 1 128.000 52.000
Case 3 20 2 16.000 22.000 Total Costs in third year (maintenance + licenses)
Case 4 60 0,5 12.000 22.000
Figure 2 The total benefits based on the saved man-hours for each of the
PCSs over three years
5 DISCUSSION It can be understood from the numbers and graphs that the cost of
The case studies demonstrate a positive trend in popularity and use maintenance are very low as compared to the investments for the
of the PCS with continuous updates, which leads to the increase in initial development of a PCS. However, the maintenance efforts
PCS profitability. and costs can have a dramatic influence on the popularity and
Analyzing the cost benefits across three years for case 1 and 2 benefits of PCS projects.
clarifies that if the PCS is maintained and updated continuously,
they will be used more over the time and turn to become an
important tool among the experts. In other words, experts would
6 CONCLUSION
give up using other tools (such as excel sheets) and all use the The aim of this study was to understand the influence of the
configuration system. As the number of the quotations generated maintenance of the PCSs on gained benefits in terms of saved man-
increase, the more man-hours will be saved due to the automation hours. Empirical data was gathered from an ETO company based
and the benefits of using the PCS increase. Figure 1 demonstrates on the previous 3-year results, which confirmed the propositions
the yearly benefits for each of the case studies. Apart from the made. Specifically, numbers for the cost and benefits for the last 3
complexity or size of the PCS and number of saved hours, case 1 years was available from the case company, and the complexity
and 2 presented PCS projects with the tendency to increases in was estimated based on the number of attributes and the number of
benefits during the years. However, as illustrated in Figure 1 cases constraints in PCS. The analysis of these data led to the conclusion
3 and 4 have a huge decrease in use and benefits during the last that there is a positive correlation between continuous maintenance
three years due to the lack of maintenance. in PCS projects and the level of gained benefits in the selected case
projects. If not engaging in maintenance efforts, in the case
Yearly beenfits (saved man‐hours)
1,000,000 projects the money is wasted on licenses and other fixed costs for
900,000
800,000
PCSs. As the studied projects showed, projects that receive no
700,000 maintenance can result in financial loss – since users do not use
600,000 PCS that are not up-to-date because of the lack of maintenance
500,000
400,000
efforts.
300,000 This research is a first step in exploring the impact of
200,000 maintenance on the saved man-hours in PCS project. However,
100,000
there are generalization limitation for the paper due to the limited
0
Case 1 Case 2 Case 3 Case 4 number of cases and data. For future research, the study of this
Total benefit in first year 987,840 118,000 160,000 54,000
paper identified a number of factors, which can influence PCS
Total benefit in second year 1,560,000 124,000 64,000 30,000
Total benefit in third year) 1,736,000 128,000 16,000 12,000
projects’ costs and benefits, needing to be further studied. These
factors include employee experiences, user expertise, level of
Total benefit in first year Total benefit in second year Total benefit in third year)
details included in PCSs, and organizational culture.
Figure 1 The total benefits based on the saved man-hours for each of the In this study, we compared four projects using only one
PCSs during the last three years variable, namely ‘saved man-hours’. Thus, there is a need for
further research to analyze different factors, which may contribute
ﻳﺎﻫﻮ
ﻳﺎﻫﻮ
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