If your company offers configurable products or services, what are the best practices for connecting with your customers? Your company would:
- Modularize your offerings in such a way that customer requirements can be derived from standardized modules (or components or capabilities) allowing for acquisition “a la carte.” This, of course, requires that there has been a “rationalization” effort to identify those essential options or value components that customers will require.
- Maintain a listing—usually within a configurator—of standardized modules as well as any rules for combining the modules into fully-configured customer orders.
- Provide a means to seamlessly share the same understanding about customer options across the enterprise (with customers, distributors, sales, order administration, and customer service).
- Extend the capability to create personalized orders and explore quotation alternatives with the customers, distributors and channel partners (extended enterprise) via tools offered and supported for that purpose. This allows customers to conduct a “what if” analysis looking at different capability and pricing options. [Note: Three things a customer really cares about are (1) what are my options, (2) how much is this set of options going to cost, and, (3) for manufacturers of products, how long will it take to produce it? Truly effective systems need to address all of these issues.]
- View the likelihood that any two orders would be identical as a coincidence and set up the business accordingly, e.g., complete modularity—no bundles.
- For product manufacturers, produce orders only after receipt of an order—no stocking of any finished products.
How does the business behave differently?
- For product and service providers:
- Orders are driven directly to Order Administration or Customer Service
- Development, Product Management and/or Marketing is involved only when a new module is needed.
- Product management makes determinations about “saleable” option combinations.
- No people-dependency for expert knowledge about allowable option combinations.
- For product manufacturers:
- Engineering is not involved in the creation of a bill of material to support individual order configurations.
- Engineering defines “allowable” product configurations based on technical feasibility, not marketing or sales policy. This is important. You do not want to change the logic behind allowable or permissible configurations every time the marketing or sales philosophy changes. To do otherwise creates constant rework and churn.
- Engineering designs the product with product modularity in mind.
The attributes above demonstrate why offering configurable products and services must be approached as an enterprise-wide business strategy, not merely a departmental hurdle. Efficiencies must flow across the entire enterprise. The mission is providing unique products and services tailored to the customer’s needs with the same or greater efficiency than is presently realizable.
The modularization of the offerings must not occur in a silo separate from the rest of the organization or the impact will be sacrificing speed and efficiencies to meet each customer’s requirements. And, the inefficiencies, of course, undermine profits.
Customers at the high-end of the marketplace want products that are highly-personalized, unique and offer superior value. For example, there is a product configurator for the Bentley GTC Speed, a very high-end automobile is an excellent example of how a company has approached giving customers a lot of choice in how they want their $250,000 automobile configured.
Dave Gardner, Gardner & Associates Consulting http://www.gardnerandassoc.com
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