May 1998 • Volume 8 • Number 5
The Evolution of Configuration in Mid-Market Manufacturing
Bringing customers in more closely to the fulfillment process for their orders helps capture their loyalty and improve the business relationship.
By Bruce Crocco and Munira Fareed
In the customer-driven marketplace of the 1990s, companies increasingly turn to mass customization to remain competitive. Traditionally, midsized manufacturers have concentrated automation efforts on the back office, focusing their attention on making the shop floor more efficient. Today, more and more manufacturers are turning their attention to the front office — looking at the business functions that are closer to their customers. Configuration systems that help reengineer the sales and marketing process and easily integrate with a company's enterprise resource planning system play a major role in this effort.
By streamlining the sales and order process, a configuration system lessens employee training costs and eliminates order mistakes and rework. In turn, configuration systems reduce order fulfillment costs, shorten delivery cycles, increase capacity and help bring new products to market quickly. By ensuring timely, satisfying responses to customer needs, the configuration system strengthens customer relationships, which translates to increased sales for the manufacturer.
History of Configuration
Since the mid-1980s, software companies have started developing and marketing more standard configuration applications to meet broader business and customer demands. This has occurred in response to an increasingly competitive market that has required a greater number of midsized manufacturers to customize their products to meet unique customer needs. As a result, cycle times continue to shrink, necessitating the entire manufacturing process — from order to shipment — to become even more efficient.
Thus, today's software solutions strive to bring the configuration process closer to the customer, allowing customer representatives, the sales team and, often, the customers themselves, to configure the product online.
Tying Configuration Solutions to Business Challenges
In the midsized manufacturing market, it is useful to evaluate configuration solutions for each of the three main manufacturing environments.
Assemble-to-Stock
An automotive manufacturer is one example of a company that would benefit from a marketing configuration system designed for an assemble-to-stock environment. The marketing configuration system allows a manufacturer to control mission-critical data such as specifications, pricing and product information. Customers can easily use such a system to select automotive features and options, and the system can quickly meet customized requests to increase return on investment. While addressing the needs of customers, a marketing configuration system also provides the manufacturer with critical knowledge about consumer preferences.
Good product selection tools allow the customer to choose valid product configurations interactively. As the customer drives the product selection process by sequentially selecting product components, the marketing configurator prevents invalid component selections that violate product model constraint. Marketing configurators even add components automatically if they are required by past selections. For example, when configuring an automobile, selecting a moon roof may automatically trigger the inclusion of power windows and door locks if the same electrical system is used for all three options. Good selection tools will prevent the user from making an entire set of choices only to discover that the set chosen is invalid and the process must be restarted.
When selecting a marketing configuration system, manufacturers should find a system that offers speed of implementation, ease of maintenance by a diverse group of employees, and the ability to support multiple deployment platforms.
Assemble-to-Order
Imagine a furniture manufacturer that designs executive offices for senior management. In such a manufacturing environment, attributes of certain pieces of furniture may dictate other choices available. For example, certain leather sofas may be available with only a select number of frames, or a bookshelf made of a particular type of wood may have a maximum width-to-length ratio. In these cases, the configurator must be able to apply preset formulas to determine if selections are valid.
In selecting a manufacturing configurator, a company should examine bill of material capabilities, performance, speed, integration and scalability.
The bill of material explosion allows the manufacturer's sales or order entry person to configure products using minimal details, while providing a complete, descriptive list of inputs for manufacturing purposes.
An important measure of any configuration system's performance is the speed at which configurations can be generated — it is insufficient for a system to be technically capable of producing a correct answer if the work cannot be processed in a time frame that allows the user to be productive.
A strong manufacturing configuration system must also integrate with a manufacturer's enterprise resource planning system. Tight integration allows the configurator to receive information about the items to configure and export solutions to other systems in the company.
Scalable configuration solutions must demonstrate consistent performance while supporting growth in the number of components, as well as users. To configure a wide range of products of varying complexity, a manufacturing configuration solution must scale to handle an increasing number of parts and components.
Engineer-to-Order
A midsized manufacturer specializing in product packaging may be a candidate for an engineering configuration system. The reason: Product packages are almost always unique to the customer and to the individual product. If a company designs a unique beverage container that must be packaged in units of 10, it will require a custom solution. Since no design for such a package exists, the engineering configuration engine generates a valid product configuration comprised of the components necessary to satisfy the initial requirements.
Generative modeling refers to an engineering configuration engine's ability to generate the appropriate product configuration. IT usually includes the ability to model spatial problems and support high-level needs analysis. This means the configurator must be able to take inputs in the form of abstract functional requirements. For example, a customer might describe the need for product packaging that can ship, store and merchandise a new hot beverage. The configurator must be able to build a system that meets such an abstract need without the product being explicitly described.
Ease of modeling within a complex engineer-to-order environment and the ability to perform spatial analysis are also important considerations.
Future of Configuration
As configuration systems move into the 21st Century, customers can expect to see more Web-based systems that bring configuration and other front office functions to the customer. Instead of a salesperson sitting with a customer at a laptop, the customer will be able to log on to a Web site and configure the product himself. An example of this kind of interaction can be found at www.volvocars.com.
In addition, configuration solutions are becoming more and more complex. Instead of configuring a desk or chair, a furniture manufacturer is being asked to configure an entire office building.
Few business functions have the potential to affect the bottom line as dramatically as automation in the sales and order entry area. In the recent past, manufacturers have focused reengineering efforts on back office processes such as purchasing, engineering, manufacturing, finance and human resources. The right configuration tool, integrated with other front office tools and a company's enterprise resource planning system, can improve a manufacturer's relationship with customers and become a significant competitive advantage.
Before making a major investment in configuration technology, it is important for a manufacturer to consider some key questions:
In most manufacturing environments, object-oriented modeling greatly reduces implementation and maintenance requirements of a configuration system. Object-oriented modeling language delivers orders-of-magnitude improvements to the task of maintaining configuration information. This characteristic allows the user to establish inheritance among system components and re-use previous constraints, which greatly reduces future maintenance of the configuration system.
2. Does the configuration system integrate easily with a new or existing enterprise resource planning package?
3. Can the configurator extend to other front office tools easily?
4. Does the configurator come with tools that allow you to easily build your own user interface?
5. Is the configuration system Web enabled?
For many years, configuration applications existed only as proprietary software written by individual companies for specific applications. According to Advanced Manufacturing Research, most early configurators were primitive "expert systems" that leveraged artificial intelligence research in rule-based problem definition, inference engines and specialized programming languages. Often, these custom systems only moved the work within a company — from engineering departments to information systems departments.
Figure 1
Different manufacturers have different configuration needs. A company's configuration needs derive from the underlying business problem it is trying to solve. Since these business problems come in many shapes and sizes, there is no one-size-fits-all configuration solution.
In an assemble-to-stock manufacturing environment, the manufacturer designs and produces a limited set of products based on well-understood designs. Products are manufactured to meet forecasted demand and stored in inventory prior to sale. In this scenario, companies need to inform customers about product availability and basic compatibility of features and options. Marketing configuration systems address these problems.
In an assemble-to-order manufacturing environment, the manufacturer designs a set of blueprints that allow great product variety through the use of modular components. The company fulfills specific orders by assembling these components according to the blueprints, sending the resulting product to customers just in time. In this scenario, manufacturers need to help customers decide which components should be included in the final product. Manufacturing configuration systems address these problems.
Figure 2
In an engineer-to-order manufacturing environment, the manufacturer has a set of parts or components, but cannot design a product blueprint until more information is available about the customer's problem — this leads to the greatest possible product variety. Once the manufacturer understands the customer's specific needs, he designs and builds a new product for each order. In this type of manufacturing environment, companies must understand and accommodate situation-specific needs. Engineering configuration systems address these problems.
Sophisticated configuration products tie configurators into other front office products, allowing sales personnel to share electronic product catalogs, configure particular products, provide accurate pricing and quotes, and even review the resulting sales commissions — all at the point of sale.
QUESTIONS TO ASK BEFORE SELECTING A
CONFIGURATION SOLUTION
1. Is the configuration solution an object-oriented or rules-based solution?
Rules-based systems are best used for simple, bounded problems that remain static over time. In a rules-based system, a manufacturer must create and recreate vast quantities of knowledge data by hard-coding multiple new rules for each new part, the flow and logic with which the engine processes rules, and the actual flow and functionality of the application. Because of the enumerative nature of rules-based systems, the addition of new components and product lines causes an exponential explosion in the number of rules required.
Tight integration means the configurator can receive information about the items to configure and smoothly export solutions to other systems in the company. Stand-alone configuration systems may require significant additional investment to ensure it runs smoothly with current systems.
Configuration systems that can link to other key business systems in the front office, such as pricing and quoting tools, opportunity management systems and computer-aided design systems, make front office automation easier to implement and maintain.
For midsized manufacturers, it can be important to have easy-to-use, out-of-the-box tools that allow virtually anyone in the organization to create a user interface and do basic modeling with minimal training, eliminating the need for a full-time computer programmer to maintain the system.
As configuration moves into the future, more and more systems will be available on the Web for customers to configure products on their own. Selecting a configurator that is prepared for this next level of application will extend the life of your investment.
Bruce Crocco is a product manager for Symix, a provider of ERP software for mid-market manufacturers. Munira Fareed is a director of marketing for Trilogy Development Group, a producer of sales configuration software and other front office tools for manufacturers.
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