Managing product variety through configuration of pre-assembled vanilla boxes using hierarchical clustering

Postponement strategy and platform-based production are common practices of mass customisation to address supply chain challenges due to the requirement of product variety. This paper focuses on implementing mass customisation through development of semi-finished forms of products (vanilla boxes) to reduce supply chain cost and facilitate the production process. The challenge is that the possible number of vanilla box configurations grows dramatically with the increase in number of product variants. In the solution approach, the basic information of product variety is captured in a matrix format, specifying the component requirements for each product variant. Then, hierarchical clustering is applied over the components with the considerations of demands. The clustering method consists of three major stages: similarity analysis, tree construction and tree-based analysis. The key stage is similarity analysis, in which problem-specific information can be incorporated in the clustering process. Two numerical examples from the literature are used to verify that the clustering approach can yield good-quality solutions.