Today’s manufacturers must be able to respond quickly to limit the impact of supply chain changes on customers, and ensure timely communication of any impacts with clear alternatives.
By pre-planning alternatives, manufacturers can respond and communicate quickly to affected customers. For manufacturers of configurable products, this can be a challenge, as there can be hundreds of thousands of options to manage, often across multiple systems involved in the manufacturing process.
With global trade conflicts heating up, there will likely be an impact on the availability of certain supplies and materials — both in terms of cost and volume. For instance, let’s say the source a company typically relies on for steel is now charging significantly more. This would either require finding a different source or passing the cost along to their customers, which is never ideal. Or maybe the company from which they’ve typically purchased a certain paint color is now charging more for their exports.
All these scenarios require a dynamic approach to pricing, sourcing, logistics and materials, in order to ensure organizations can fulfill what’s being offered to customers, despite the supply chain shock. The sales department needs to know what engineering and manufacturing teams can realistically fulfill. If certain options or configurations now cost more, or are no longer available, they need to ensure they’re passing that information along to customers. Otherwise, they will find themselves in a situation where a customer is sold something the company can’t provide (or can’t provide at the promised price).
Supply chain shocks lead to delivery disruptions that need to be managed and communicated effectively, which requires insight regarding options and impact. From a logistics and procurement point of view, it requires agility in an organization’s procurement strategy to allow for rapid changes. For instance, an organization may find that, from week to week, their preferred choice of supplier may change depending on where they’re sourcing their materials from. There may be a risk that their prices will need to change dramatically from one moment to the next.
Today, most organizations rely on manual identification or validation of alternatives in these scenarios, but that can lead to delays that could impact their customers. If they can’t obtain a certain part at a certain time, they need to understand which customers could be impacted.
The Power of Product Configuration Technology
The challenge for manufacturers of complex configurable products is that configurable options and rules are defined in multiple systems. If a change needs to be made to replace an option, this change must be made in multiple systems, which is time-consuming and error-prone, as is detecting errors between systems.
By establishing a common, shared product model that consolidates all configurable options and rules in one place, alternative options can be defined centrally and shared with all, enabling faster selection of an alternative, and immediate communication to all affected systems and customers. The product model becomes a shared source of truth for configurable product options and rules. This makes building and selling configurable products easier and more flexible, ultimately improving customer experience.
We call this the Configuration Lifecycle Management (CLM) approach, as it enables manufacturers to manage the full lifecycle of configurable options that are offered to customers, and the conditions under which they are offered. This approach can centrally save all end-user configurations made in engineering, sales, manufacturing or service, together with metadata to establish digital configuration threads. CLM thus manages the lifecycle of what is offered, sold, delivered and serviced over time.
The key enabling technology for a CLM approach is the configuration engine. This is where the shared product model is defined and consumed by other systems, through open APIs. This is also where digital configuration threads are stored.
Manufacturers can define multiple options for a specific capability or feature using a configuration engine. It is also possible to define when this option is available, either using rules or other constraint logic. Using it effectively, it is possible to pre-plan alternatives for each capability or feature. For example, if a specific paint color is not available yet, the effectivity start date can be set to a time in the future. This is done once and then immediately conveyed to all subscribing downstream systems and users, ensuring that no new orders are made using this option.
An organization could also, within the configurator engine, identify a number of alternative suppliers upfront. For instance, let’s say their product is made with steel and their primary supplier is in China, but there’s also one in the U.K. and another in Canada. Essentially, the configurator engine could be used to account for this, enabling the organization to switch suppliers based on supply chain impacts and costs. They could also allow for dynamic pricing based on certain market conditions, or offer different models using different suppliers’ materials to allow for flexibility as the market changes.
With all the economic uncertainty and global changes going on, supply chains face a crunch, and manufacturing organizations need to develop the agility and visibility across operations to ensure timely, accurate delivery to customers. No one wants to sell a customer something they can’t actually deliver due to supply chain limitations, so manufacturers must have comprehensive visibility and communication between their different functions. A CLM approach, based on high-performance configuration engines, can play a pivotal role in providing the visibility and communication companies need to satisfy their customers, even in the face of supply chain shocks.
Daniel Joseph Barry is vice president of product marketing at Configit.