Reduce by 70% the number of references managed without reducing the variety of the offer of a hydraulic motor manufacturer

Our client wishes to develop a new modular range of hydraulic motors to continue to offer a high level of variety to its customers while significantly reducing costs and complexity in-house.

IAC has been mandated to implement a modular design approach to reduce the TCO (total cost of ownership) of the new range by characterizing standard platforms, specific modules and optional customizations in delayed differentiation.

Characterization of the variety of customer needs and their impact on the current range

• Mapping of customer needs and the impact of the variety of these needs on the engine sub-assemblies
• Analysis of finished product sales over one year according to the market categories addressed

Measurement of the impacts induced by the complexity

• Mapping of the variety of current internal references and Pareto analysis of quantities purchased over 2 years
• Creation of a coupling matrix using the Design-for-Variety method to identify the interdependencies between the subsets that cause internal complexity
• Measurement of indirect costs by business line and evaluation of achievable gains through complexity reduction and massification

Construction of the target modular range and the optimized industrial scheme

• Definition of the optimized design of each sub-assembly, by decoupling them according to a strategy of standard platforms and specific modules managed in delayed differentiation, and according to a logic of standardization of purchased parts for a relocation of targeted references
• Optimization of purchasing and the supply chain through modularity to gain in direct cost but also in flexibility and lead-time

Thanks to the recommendations identified with the project team, the number of references managed can be reduced by 70% without degrading the catalog offer.

The use of standardized platforms allows:

- A massification of purchases leading to a 37% reduction in direct costs

- A 20% reduction in indirect costs for managing references throughout the engine's life cycle (design office, storage, purchasing, supplies, etc.)

- A customer lead time reduced from 4 to 2 weeks with a delayed differentiation directly on the assembly lines combined with a more regular and therefore more anticipated supply