Standardizing downtubes will increase production rates of the most popular SKUs, simplifying inventory and purchasing.

Ray Hawkins
Production Supervisor, Big Ass Fans

Eliminate Extra Parts For A Big Impact

Big Ass Fans brings industry-leading airflow and energy savings to customers worldwide.

$460,000

They will save an estimated $460,000 annually on material margin.

For more information on this story, contact
Jim Flickinger, SVP and Chief Commercial Officer, Big Ass Fans: [email protected]

Goal
Big Ass Fans wanted to evaluate which elements of its product line had the biggest opportunities and identify any simplification recommendations.

Process
The company’s residential simplification team included members from sales, production, marketing, and product management. They analyzed “A” and “B” products and customers to determine which SKUs drove the majority of residential revenue and which created unnecessary complexity for production, sourcing, and sales.

The team considered the composition of product kits across four main product lines and looked for ways to create uniform offerings, standardize major parts, adjust pricing, and remove long-tail SKUs. Their first recommendation to executive leadership in December 2021 was to level set pricing on foil finishes (colors)
for two different fan lines—essentially creating a tiered pricing structure that could increase margin by $3M annually.

After evaluating different downtube lengths across the residential product line, the team saw an opportunity to standardize downtubes included in fan kits. In one product line, two downtubes (the material that connects the ceiling fan body to the mounting hardware to ensure a secure and efficient installation) were included to provide options during fan installation. The team analyzed which downtubes were the most popular and the implications of offering one instead of two, which would reduce the cost of production, packaging, and consumer waste.

Results
By standardizing the downtubes offered in the initial purchase of the fan, Big Ass Fans plans to eliminate 300 SKUs from the system, 80% of which are “B” SKUs. This will save an estimated $460,000 annually on material margin and produce a more sustainable package. In addition, it will increase production rates of the most popular SKUs, simplifying inventory and purchasing. Additional downtube lengths will be available for purchase separately.

Big Ass Fans anticipates a positive consumer reaction to eliminating the second downtube, because customers won’t have to discard a redundant item. The residential line production team has also shared positive internal feedback. Since each downtube has to be wired and put together before assembling the full fan, packaging two downtubes required twice as much work and could cause line delays. Therefore, the elimination of the extra downtube should boost production efficiency significantly.

Key Learnings

  • Follow the data, it will help inform the thinking process that’s the foundation of 80/20.
  • Leverage input from channel partners and customers to evaluate the impact of proposed simplification actions. It will help ensure win-win outcomes.