Customisation and fast delivery - how manufacturers achieve the best of both worlds
Increasingly customers expect manufacturers to be able to fulfil their customisation requirements without compromising on fast delivery times. At the same time, they want to be taken through the production process step-by-step and kept informed of progress.
So, how do you adapt your business to fit this new reality?
Today, the demand for customised products is increasing enormously. Customers expect a lot and competition is increasing. The demand for customised products goes hand in hand with high expectations in terms of service and speed. How can manufacturing companies meet these expectations? In this blog, we discuss the important steps all manufacturing companies need to take in order to become an agile, adaptive business that can meet the requirements of customisation for its customers.
Successful customisation requires change
Many traditional manufacturers struggle to keep up with changing customer expectations with the existing design of their mostly 'make or engineer-to-order' (MTO/ETO) processes. The need for customisation requires a great deal of extra development time and coordination with the customer, which means extra costs. But there is limited time to achieve this, because competition and time pressure within supply chains are fierce. People expect the best price, fast delivery and top service.
If you want to meet the customer expectations of tomorrow, you cannot continue in the same vein. You must adapt your processes so that your business can organise and produce customer-specific requirements in a smart, cost-effective and efficient manner.
In order to properly respond to customer demand, you will need to take a critical look at product management in the organisation. This is the most essential part of the transition to an optimal process and this is where one of the biggest changes will take place.
Some of the questions you should ask yourself are:
- How will we incorporate complex customer requirements into our products?
- What does the layering of my product look like? And where do we see that customers are asking for customisation?
- Where can we achieve economies of scale?
- Which parts occur in multiple assemblies within my product range?
- What are the consequences for our prices and delivery time, among other things?
- What do I currently know about the lead time, prices and internal logistic process to produce this product?
Changing your product management and related work processes also means changing your company's supporting technology. It must be flexible enough to facilitate product differentiation. In addition, the IT system must ensure optimal integration between business processes so that your manufacturing company can meet its high customer expectations in terms of speed and service.
Create standard building blocks for products
To successfully apply product personalisation, you need to make fundamental changes to your product management, processes and IT support. But which way should you go?
For most companies, this is the transition from an ETO to a CTO (configure-to-order) process. This means that you start dividing products into configurable standard building blocks. The result is that customisation becomes increasingly standardised and is incorporated as an integral part of the logistics process.
You can regard the CTO process as putting together a new house, where the future occupant has a choice of windows, doors, extension options and connections. The customer thus has a choice of predefined options. The advantage of this is that it offers customer-specific options without requiring development capacity from the internal organisation. You don't have to build a product from scratch every time, because you can compose it from these predefined elements.
Moreover, you can repeat the underlying standardised processes and optimise them as you go along. So you save a lot of time as a result of product and process development having already taken place before the customer's order arrives.
Embracing CTO offers a lot of opportunities to work efficiently on a customer-specific basis. But does this mean it is wise to completely standardise your product development? It depends. In the market we see that customers like to co-develop their product.. That's why you have to deal with customisation issues in a smart way that adheres to varying requirements.
So how do you take this a step further? Find out in my next blog.
This is the first blog in the three-part blog series: Smart customisation in manufacturing - how manufacturing companies survive and thrive in a rapidly changing market.
Want to know more about how we help our manufacturing customers achieve smart customisation processes? Click below to download the whitepaper.