SBIR Phase I: Parts Forecasting for Configurable Products

This Small Business Innovation Research (SBIR) Phase I project addresses the impact of product variety on parts inventories. The goal is to help the manufacturers of configurable products; these are products that have many different configurations, or variants, or build combinations. These variants arise because the product has a large number of features/options or the customer is given choices over options. The manufacturers of such products have a difficult time forecasting the requirements for the parts they will need to build the end items that they deliver to their customers. This effort is designed to show that current methods and first order take rates are inadequate for parts planning, and to show that much better parts forecasts can be based upon configuration-level demand forecasts. Manufacturing in the United States is shifting from mass production toward mass customization. Mass production of identical objects can be done more cheaply overseas. But higher value manufacturing that produces customized products can be kept in the United States. One of the major problems associated with high variety manufacturing is parts planning. Poor parts forecasting leads to large inventories of unneeded parts, production-interrupting shortages of needed parts, and hence higher product cost. Better parts forecasting tools could improve the profitability of American manufacturers.