In today's highly competitive manufacturing landscape, the ability to offer customized products at scale is a key differentiator. However, customization comes with its own set of challenges. As product variants increase, so does manufacturing complexity. This leads to a higher likelihood of errors which erode profits through rework, scrap, and unhappy customers.
Product configuration software provides a powerful solution to balance customization and operational efficiency. By guiding users through valid options and generating a complete, validated bill of materials (BOM), these systems significantly reduce manufacturing errors. Read on to understand how they work and how to maximize the benefits for your business.
The Hidden Factory Within Every Manufacturer
Every manufacturer has a "hidden factory" where substantial resources are spent detecting and correcting errors:
- Engineering resources spent resolving ambiguous specifications and incorrect BOMs
- Production resources for rework, scrap, expediting orders
- Quality resources for inspection, testing, and containment
This hidden factory represents lost capacity that could have been better utilized for productive output. It also leads to unhappy customers due to late deliveries, quality issues, and limited configuration options.
Reducing the hidden factory must be a key priority. But where do most errors originate? Our experience suggests 60-80% of manufacturing issues originate in the sales-to-production handoff. Errors introduced here propagate through the system leading to significant downstream costs.
Key Sources of Handoff Errors
- Invalid configurations - Accepting customer orders for invalid product variants
- Incomplete BOMs - Missing components, incorrect revisions, unavailable parts
- Ambiguous specifications - Unclear build instructions leading to guesswork on the production floor
Let's look at each one in more detail:
1. Invalid Configurations
Modern products can have thousands, even millions, of possible configuration options. But not every combination is valid or buildable. Sales reps lack visibility into complex inter-component compatibility rules. So they unknowingly sell invalid configurations which later require rework or re-quoting.
2. Incomplete BOMs
BOMs generated manually from order forms are prone to missing or incorrect information:
- Parts unavailable due to obsolescence
- Wrong revisions leading to integration issues
- Missing components forgotten in hand assembly
Such gaps only surface later in production leading to delays and rework.
3. Ambiguous Specifications
Build instructions generated manually from sales orders tend to be incomplete or ambiguous:
- Missing necessary steps and context
- Typos and unclear references
- Options without indications of what was selected
This forces production staff to make assumptions or interpret instructions leading to errors.
The Solution: Product Configuration Software
Product configuration platforms address these problems by automatically generating complete, validated build documentation from sales orders:
- Validates orders against constraints to prevent invalid configs
- Dynamically generates complete BOM with latest component revisions
- Provides detailed but easy to follow build instructions tailored to selections
The result? Up to 90% reduction in order errors entering production. Let's look at how they achieve this.
How Product Configurators Work
These systems allow defining all valid product variants by combining modular components. Configuration rules check selections for compatibility. Guided selling workflows take users through only valid options.
At its core, a configurator maintains a product model defined by:
- Components/parts library with attributes like cost, availability, etc.
- Compatibility and constraint rules between components
- Configurable options and rules for what can be selected together
- Configurable documents and BOM templates
The user interface provides guided navigation and selection of valid options. Some systems also offer 3D visualization.
The configuration engine checks selections against rules to prevent incompatible choices. It tracks selections and dynamically updates available options.
Finally, the output generator produces complete validated documentation like BOMs, production instructions, etc. tailored to the configuration.
Benefits of Configuration Software
Adopting a configuration platform brings powerful benefits:
1. Consistent and Complete Sales Information
- Guides users through only valid options
- Generates accurate quotes with costs and lead times
- Reduces order errors entering production
2. Instant Production Information
- Dynamically generates complete BOMs and instructions
- Pulls latest component data like revisions and availability
- Significantly reduces engineering time for each order
3. Automates Complexity Management
- Centralized model for defining components, rules, and documents
- Reusable modules and configuration logic
- Eases managing even millions of product variants
4. Faster Order Processing
- Guided selling shortens sales cycles
- Immediate production documentation with orders
- Accelerates production planning and reduces lead times
Adopting configuration software delivers strong bottom-line impact through:
- 5-10% increase in sales from superior ability to offer customization
- 20-30% reduction in engineering costs
- 50-80% decrease in order errors entering production
- 10-20% improvement in manufacturing efficiency
These benefits translate to 3-8% overall margin improvement.
Best Practices for Implementation
Follow these guidelines to maximize the value from investing in configuration software:
- Integrate with CRM and ERP. Connecting the configurator with your CRM and ERP systems avoids re-entry of data and ensures smooth flow of information.
- Map existing variants first. Start by modeling existing product variants before extending to new offerings. This allows validating the configuration model and output while minimizing risk.
- Phase by product line. Rollout serially by product line rather than attempting a "big bang" across all products simultaneously. Prioritize lines with high mix complexity first.
- Involve right stakeholders. Include sales, engineering, production, and quality representatives from the start to get buy-in and ensure all needs are met.
- Iterate on documentation. Refine BOM templates and production instructions over initial runs to optimize. Treat documentation as a product needing continuous improvement.
- Simulate orders. Before go-live, simulate order scenarios across valid and invalid configurations to rigorously test system behavior and output.
- Train sales team. Train both inside sales and field teams on using the configurator to ensure system adoption and maximize value realization.
- Customization and product complexity lead to a "hidden factory" of errors and rework costing millions in lost capacity.
- Most errors originate from invalid configurations and incomplete information handed off from sales to manufacturing.
- Configuration software validates orders, dynamically generates customized documentation, and accelerates order processing.
- Adopting configuration systems has proven to reduce errors by up to 90% while boosting margins by 3-8%.
- Follow best practices like cross-functional involvement, iterative documentation improvement, and rigorous testing for smooth implementation.
The bottom line? Product configuration software pays for itself in a matter of months through hard dollar savings and expanded customization capability. With pressures to provide customizable and innovative products at scale, investing in these systems is becoming imperative to staying competitive.
1. What types of products benefit the most from configuration software?
Configuration platforms provide the most value for engineered products that are modular in nature and have multiple optional or customizable components. For example, heavy equipment like bulldozers, conveyor systems, trucks, medical devices, high-tech products like computers and electronics, furniture, and industrial machinery all tend to have high variability and benefit greatly from configuration automation. On the other hand, products that have little variation or optionality realize less benefit.
2. Does our product need to be redesigned for modularity to work with a configurator?
Not necessarily. In many cases, existing product designs can be mapped into a configurator by defining components, options, and rules based on current variants. This is especially true if your product has distinct modules, accessories, or optional features that can be mapped as configuration variables. However, in some cases, tweaking the product design to improve modularity can enhance the leverage gained from using a configurator. This is a judgment call based on your specific product architecture.
3. What deployment options are available for configuration software?
Configurators are available in the following formats:
- Native desktop applications installed on user machines
- Web-based applications accessible via browsers
- Cloud-based solutions fully hosted and managed by the vendor
- Add-ins or extensions to existing CAD or PLM software
The web-based and cloud options are increasingly popular for easier access and maintenance. Cloud solutions also allow faster implementation. However, desktop or add-in solutions can enable tighter integration with existing engineering software if required.
4. How difficult is it to switch solutions later if needed?
The difficulty of switching configurators depends greatly on how you manage your configuration data. If you use proprietary formats within the system, changing solutions later can be difficult and require rebuilding all the models. However, if you use open data standards and keep configuration models external in a Master Data Management (MDM) system, then switching becomes much easier since models can be reused. We recommend using an MDM approach from the start for long-term flexibility.
5. What level of IT involvement is needed?
Configuration software is typically non-invasive from an IT perspective and quick to rollout. Web and cloud solutions have minimal IT requirements like opening firewall ports. Desktop solutions need installation support but don't require integration with core systems. The only IT integration needed is for exchanging data with surrounding sales and manufacturing systems which configurator vendors provide APIs or connectors for. So in summary, IT involvement is helpful but not intensive.
6. How can we ensure user adoption across sales and engineering?
Getting full user adoption requires executive mandate plus training and support during rollout:
- Issue a clear top-down directive making configurator usage mandatory for all sales and engineering users.
- During launch, have power users and advocates provide intensive on-the-job training and support to users.
- Run incentive programs rewarding usage and highlighting productivity benefits.
- Showcase power users and examples of efficiency gains in internal communications.
- Iterate on software usage feedback from users to address frustrations.
With persistent internal marketing of the benefits, most organizations can achieve over 90% adoption within 3-6 months after rollout.
7. What level of effort is needed to maintain the configuration models?
The maintenance effort depends on the frequency of changes:
- For stable products, the models may only need occasional tweaks or additions.
- But high-velocity products may require weekly or daily changes.
We recommend budgeting 1-2 full time equivalent resources (or distributed effort) for model maintenance. The tool itself should also provide capabilities like mass editing to simplify ongoing model changes.
8. Can we restrict access to certain model details?
Yes, most configurators provide security capabilities to define granular access permissions. For example:
- Sales users can be limited to just selecting valid options without seeing underlying model structure
- Engineering users may have fuller access for making changes
- Model details like cost data and suppliers can also be hidden from certain user roles
Setting the right access controls prevents unauthorized changes and protects proprietary data.
9. Does pricing change based on adoption scale?
Configurator pricing follows typical enterprise software models like:
- Perpetual license model with upfront fee and annual maintenance. Price determined by number of users or transactions.
- Subscription model with monthly/annual fee based on users, transactions etc.
In both cases, increased usage volumes can lead to higher ongoing fees. But vendors also offer tiered pricing to encourage adoption, so costs don't necessarily grow linearly with usage. We recommend modeling cost scenarios based on expected user growth.
10. What level of support is typical for these solutions?
Reputable configurator vendors provide different support tiers:
- Standard phone and email assistance during business hours
- Premium 24/7 phone/email support options
- Onsite deployment assistance
- Consulting services for building and optimizing models
Most also staff solution architects to advise and train internal teams for self-sufficiency. Start with premium support during launch, then switch to standard once teams are trained up. Consultants can help with complex modeling if needed.
Is a solution and ROI-driven CTO, consultant, and system integrator with experience in deploying data integrations, Data Hubs, Master Data Management, Data Quality, and Data Warehousing solutions. He has a passion for solving complex data problems. His career experience showcases his drive to deliver software and timely solutions for business needs.