A strategic, competitive Shift-To-Market
To automate order processing in the manufacturing industry, Configure to Order (CtO) is steadily being adopted by Original Equipment Manufacturers (OEMs). This entails transitioning from Engineering-to-Order (EtO) to the more efficient CtO approach, resulting in predictable order processing, shorter product lead times, and cost savings.
CtO is when a company makes a product based on customer choices from set options after they order it. Main drivers for adopting it include reducing engineering time per order, gaining a competitive edge through faster development, ensuring knowledge retention, reducing failure costs, strategic purchasing due to predictability, enhancing functionality at lower costs, and shortening Time-To-Market.
Why isn’t everyone in the business doing it then?
For manufacturing organizations that want to adopt this strategy, there are certainly implementation challenges, as well as steps to follow for successful adoption. This is why you see a widely differing use of CtO adoption globally. It greatly varies by industry, company size, and the specific technological- and market challenges faced by firms.
Challenges in the blasting and coating industry
In industries like machine building for pipe or tube blasting and coating, the shift to CtO presents significant internal challenges, including undefined action plans, lack of consensus, urgency issues, insufficiently developed plans requiring integration, unclear goals, lack of necessary competencies, absence of long-term vision, and limited resources.
Who does it?
Selmers implemented the CtO strategy to a level that exceeds that of many other suppliers. We join in round tables where OEM’s share experiences with Smart Customization. There, we emphasize the use of intelligent technologies and data-driven approaches to tailor products and services to individual customer preferences and needs.
Lessons learned
We teach Lessons Learned. For instance, automating order handling using predefined modules can lead to challenges in defining an efficient module set. Especially in machine construction with smaller series. Or that not all aspects of order intake are configurable. Some will remain EtO. A multi-process organization categorizes orders into fully configurable (green), partly configurable (orange), and non-configurable (red, treated as EtO).
We ‘breathe CtO’
Our entire staff is entrenched with the thought of its use and sees it as a growth opportunity. This is essential, engaging everyone. Why? Establishing ownership of configurable modules and integrating a product configurator into business systems, while maintaining customer-centric product configuration, is a new way of working that can stir up traditional opinions and ways of working. And change-management is always hard. Not only sharing this new way of working with all employees but getting them on board is therefore essential.
