Low volume products

Low Volume Products

Low volume products (LVP) have extra challenges that have to be addressed to make the product successful.  In this article we will look at the major issues associated with LVPs.

To qualify as an LVP depends on the product involved.  An annual production of 1,000 cars for specific model would no doubt be considered a LVP.  An annual production of 100 oil tankers of the same design would be considered a high volume product (HVP).  There are a large number of products that probably fall somewhere between a LVP and HVP.

Some of the issues with LVPs are:

  • Tooling costs.
  • Supply chain limitations.
  • Limitations on product testing.
  • Assembly methods will likely be different than high volume production.

Tooling Costs

Normally you don’t have the luxury of spending a million dollars on a set of stamping dies and then buying another set when the first ones didn’t work out.  A high volume business could easily amortize this cost over the production of 200,000 units, but not 200 units.  Spending $20,000 on a rotational molding mold when you are buying $2,000/year of parts from that mold most likely isn’t feasible.  Instead of molded plastic covers, you may be forced to use fabricated metal covers or no covers at all.

When tooling cost isn’t an issue, the designer has a much easier job.

Assembly Methods Different Than HVP

This is related to the tooling cost issue discussed above.  Your product assembly area may not have highly specialized assembly tools, fixtures, etc that would permit the use of high speed fasteners for example.  You would then be forced to use regular nuts and bolts as fasteners which will increase assembly time.

Another example is when designing sheet metal parts.  If you have access to a laser and some specialized press brake dies you could design slot and tabs to fasten parts together.  If you have to constrain your design to parts that can only be sheared and punched, you will have to use fasteners which will increase part count and assembly time.

Of course you could argue that if your factory doesn’t have the necessary tools you could always outsource the parts.  This may work in some cases, but there is the trade-off of a higher part cost vs. in-house labor.

Supply Chain Limitations

Obviously when you are buying low quantities of parts, prices breaks will be a problem.  It’s tempting to buy offshore to compensate, but as we will see in a later chapter other problems will negate any cost savings.

Just-In-Time inventory and lean manufacturing practices are intended to reduce the carrying costs of inventory.  High volume production makes this task easier.  When buying parts from an outside vendor, you may bring in one day’s supply at a time.  When one day’s production is 1,000 parts such as windshield wiper arms, this can make be done.  When a day’s supply is two gearbox mounting brackets it becomes difficult to get the supplier to send a truck to your factory every day.

When you are trying to reduce internally produced parts inventory there is always the trade-off between inventory carrying costs and increased set-up costs for low volume production runs.

Limitations on Product Testing

In a perfect world, we would have unlimited testing budgets.  In reality, and especially LVP, this is far from the case.  In some specialized one-off or very low volume products, testing may account for a great deal of final cost, say 50%.  In most LVP cases this would be impossible to produce a competitive product or even one that someone would want to buy.

When testing is limited, the design engineer is faced with over-designing parts and using conservative, proven designs.  While recycling designs is good practice, it does limit innovation and moving new designs along the evolutionary time line.