Reducing variety in product solution spaces of engineer-to-order companies: The case of Novenco A/S

Today many companies are experiencing increasing demands from customers for shorter delivery times and more competitive prices. In order to increase competitiveness from a price and time-to-market perspective, many companies initiate projects to reduce their internal product complexity by eliminating the product variety that do not create customer value. However, for Engineer-to-Order (ETO) companies, elimination of variety is particularly challenging, since it is about reducing variety in a complex product solution space, rather than just eliminating already produced product variants. To support ETO companies in achieving more efficient product solution spaces, this paper presents a procedure for reducing product solution spaces in ETO companies. The procedure is demonstrated through an action research study at the Danish ETO company, Novenco, which develops and manufactures heating, ventilation, air-conditioning and refrigeration solutions for land and marine applications.