Cost-estimation in customised production: When to expect transition to big data age

Abstract

Make-to-order manufacturing is specific in the need to combine personalisation of customised products with endeavours to reduce costs to the level as low as in mass production. Cost estimation, which usually takes place at the same time as the price-setting process, is a crucial phase for the Make-to-order businesses. Analysis of profitable customised furniture manufacturing enterprises brought up a question about the scale of implementation of smart manufacturing solutions in the cost-estimation process. The question was tackled by carrying out an evaluation of the cost estimation process from the point of view of manufacturing data management. To identify advanced technological solutions adopted in customised manufacturing and find out whether producers benefit from the collected data, an interview-based qualitative analysis was made. The total duration of the conducted interviews of representatives of all organisational levels as well as independent experts and external IT managers exceeds 22 hours. Processing of the interview data by means of NVivo software package allowed a description and a comparative analysis of the content, collection and administration of the costrelated data. The analysis revealed wide usage of modern information technologies in make-to-order manufacturing including the use of databases and conventional algorithms for data analysis and administration. However the problems were identified in all stages: data storage is fragmental and messy, arbitrary decisions often take place instead of data analysis, data transfer is complicated due to different units of calculation and data administration takes too much labour input. Most of the barriers make-to-order manufactures face in data collection, storage, analysis, transfer and administration are of the nature of the organisational structure and capabilities. Low motivation to upgrade the cost-estimation data administration capabilities is partly predetermined by the auspicious situation in the local market, where production costs may be reduced by, for example, cutting down labour costs.