Alfa Laval

Here we focus on two key enablers for Alfa Laval’s cutting-edge Configure to Order process:

1. Configurability
2. Information Model.

Configurability

The first enabler to improve the configurability of existing products is to restructure them into modules with defined interfaces. The product structure, or architecture, is defined at a level so the modules are neither too big and complex, nor too small and numerous. The architecture is created by restructuring the existing design, without redesign, so desired business effects can be reached faster.

Information Model

The second enabler is to define the modular architecture in an Information Model that feeds product data to downstream business systems, including Cost Price Quote (CPQ), Product Lifecycle Management (PLM), Computer Aided Design (CAD) and Enterprise Resource Planning (ERP). 

In the Alfa Laval case, the information model is developed, executed and governed in PALMA®. PALMA stands for Product Architecture Life Cycle Management and Alfa Laval uses this enterprise solution from Modular Management to develop and communicate modular product architectures across product areas. In summary, a modular product architecture improves the configurability of the assortment and PALMA® software manages the information model and enables system integration.

Alfa Laval is a world leader in heat transfer, separation and fluid handling. The company’s global organization embraces 42 major production units and 17 000 employees in 100 countries.

Alfa Laval’s gasketed plate-and-frame heat exchangers provide efficient heat transfer in compact equipment with a small footprint. The products are used for heating, cooling, heat recovery, evaporation and condensation. Industry applications include heating, ventilation, air conditioning, refrigeration, engine cooling, dairy and food processing, and even larger processes in the oil/chemical production and power generation. The product range is almost as broad as the industries it serves.

Figure 1: Part of the Alfa Laval Gasketed Plate Heat Exchanger Assortment

Over the years, the assortment has grown in line with demands for faster and more frequent launches of new, updated and customized products.

To maintain and develop this strong position, Alfa Laval realized that a fundamental change was needed in how products were structured and offered to the market. 

The decision was made to introduce a more modular product architecture to enable the Configure to Order process and integrate IT solutions along the value chain. The vision was for seamless and fully-automated product handling, from CPQ via PLM into ERP 

Challengers for Product Marketing & Sales

Alfa Laval uses a CPQ configurator to sell products. 

Although customers increasingly want to configure their own solutions to optimize their heat exchange process, the product structure used by the configurator did not reflect the modular design of the product. This lack of configurability led to a higher resource load when creating and maintaining specifications and configuration rules. It also necessitated non-value adding activities in the organization and longer lead times for product launches. For many projects, only the most prioritized parts of the offering were implemented in the configurator. And in very big projects, only the highest volume variants were implemented. A big challenge.

Although improvements had already been made in both the product structure and configurator, several issues could only be solved by a new approach to the product rules and logic.

Challenges for Product Design & Engineering

Heat exchangers are highly configurable products and because customized solutions are highly sought after, steps to improve configurability have the potential to deliver high value. 

The configuration model at Alfa Laval had to be improved. Product logic and rules were not easily accessible, which created dependencies on product and configuration experts. This also caused delays in implementing new variants in the configurator, not to mention difficulties in getting new engineers and product managers up to speed.

Longer lead times for new product launches were primarily due to the specification workload caused by the product structure. For example, an update of a single part could require updates to thousands of specification documents. No fun and a clear downside business risk.

The product structure generally provides a good overview of modules, variants and product data. Yet in the old structure and its accompanying documentation, this overview of design variants (parts or assemblies), including where they were used, was lacking. 

It was considered essential to improve governance of the product model and shorten the analysis time needed for design changes to be approved.

Challenges for Operations

Due to a high degree of customization, and a less than optimal product structure, the delivery process was complex and included non-value adding activities. To reduce and avoid manual activities in the delivery process, the goal was set to integrate the sales order systems with the ERP system. The product architecture information model was to be the enabler – the common ground – to link cost and lead times. At the early stages of product configuration by customers, it was about to become clearer what could be built, at what cost (internal) and when (internal/external to customer).