Formulaic Manufacturing (FM) is built on the idea that the traditional design of manufacturing software is ill suited for dimensionally variable products. A rationale for FM follows below, preceded by a chronology of events leading to the adoption of FM at one small lighting manufacturer.
Background
In all manufacturing companies with which the author is acquainted, those using manufacturing software use a bill of materials (BOM) system. The BOM is the basic product recipe. The heart of the bill of materials system is usually manifested in a table of data similar to that below:
| Product | Component | Qty-Required |
| Chair | Seat | 1 |
| Chair | Leg | 4 |
| Chair | Back | 1 |
The nature of the typical BOM is that the component quantity is fixed per unit of the parent item. Consider, instead of a chair, a lighted sign. The quantity of framing material or face material is impossible to determine in advance of knowing the product's dimensions. The component quantities may have to be individually calculated. Further, the dimensions for components whose sizes vary with the product would have to be calculated, and typically, an item profile would have to be created for that specific size of product, and for each dimensionally variable component as well. (e.g. a 28 x 40 inch lighted sign which requires a 24 x 36 inch piece of face material.) Using traditional manufacturing software, dimensional variations of products would be handled by creating a new bill of material, and if the product has conditional or optional components, each unique combination of dimensions and options would require a unique BOM. Clearly, one should be able to imagine that in an organization with dimensionally variable products featuring a wide variety of options, maintaining BOMs for each unique combination could become burdensome and error-prone.
Challenges
The challenges of maintaining traditional BOMs at smaller manufacturers are exacerbated by two factors. First, it is not always practical for a true product expert to be involved in the preparation of all quotes, so products are often quoted using basic formulae with additions and reductions for certain options. When a quote is accepted, the creation of the BOM for the product should be a cooperative process involving sales, purchasing, and manufacturing staff. Too often the cooperative process takes longer than optimal, so it falls to sales staff to create the BOMs so that their orders can enter the production process. When sales agents create BOMs, too often the quoted price proves to have insufficient profit in it, and the accuracy of the BOM proves to be low, which may make inventory inaccurate to the point of untrustworthiness. Second, many small companies innovate to compete. The combination of innovation in offerings of dimensionally variable products rich with options, relatively small staff to execute operational processes, and short time frames to learn new products, brings challenges in quoting, costing, and inventory tracking that can be prohibitively expensive to overcome.
Solution
To reiterate, in traditional manufacturing software, the bill of material (BOM) for a chair might be as follows:
| Product | Component | Qty-Required |
| Chair | Seat | 1 |
| Chair | Leg | 4 |
| Chair | Back | 1 |
..while the conceptual BOM for a dimensionally variable product might be:
| Product | Component | Qty-Required |
| Sign | Face Material | (@ParentWidth - 2) * (@ParentLength - 2) |
| Sign | Frame Material | @ParentPerimeter |
| Sign | Corner Caps | 4 |
..thus, a system which allowed a product designer to enter a formula in the quantity required value for a component could save entry of a new BOM for each size of product. One of the key innovations in FM is the substitution variables in the formulae. The variables allowed in formulae are provided by a configurable part of FM, so the list can be tailored to fit your organization.
Variable Dimension Components
Since most components whose quantity required varies with the product size also have their dimensions vary, it follows that the traditional BOM structure could be enhanced to include dimensional formulae, resulting in a structure like that below:
| Product | Component | Qty-Required | Width | Height | Weight |
| Sign | Face Material | @MyArea | @ParentWidth - 2 | @ParentLength - 2 | @MyArea * 1.75 |
| Sign | Frame Material | @ParentPerimeter | | | @ParentPerimeter * .31 |
| Sign | Corner Caps | 4 | | | 1 |
..thus, a system which allowed a product designer to enter a formula in the width, height, and weight for a component could contribute more to downstream manufacturing and shipping processes.
Features and Options
Features and Options is a common extension to manufacturing systems that boils down to defining a set of questions regarding a product, a set of possible answers for each question, and rules governing which answers are allowed in what circumstances. Formulaic Manufacturing is currently in use in a company which uses features and options - the two capabilities are extremely powerful together. It is not unreasonable to imagine a sales representative in a quoting scenario having an input page which tells them what questions to ask, allows them to record the answers, and immediately calculates an accurate cost, price, and bill of materials for the product quoted.
For more information on Formulaic Manfucturing, contact our sales team.
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