Cincom’s experiences in applying bidding, estimating, quoting and product configuration strategies to manufacturers’ pain-points has resulted in the following series of recommendations for transforming special projects into products.
Complex manufacturers grapple with the decision of if and when to turn special projects into products. Cincom’s experiences in streamlining bidding, estimating and quoting in conjunction with product configuration strategies to manufacturers’ pain-points has resulted in the following series of recommendations:
Between 50% and 60% or greater component and process commonality is required for transforming build-to-order projects into products.
Project-based teams accomplish more than those that are production-centric as they have more finite objectives and deadlines. One Aerospace and Defense manufacturer found that the force-fit of matrix teams accomplished less than the project-based ones. The reason was that the project-based teams had a clearer objective and a tighter schedule. Combining a clearer goal and a sense of urgency was actually delivering better results than the longer-term product strategies to the latter, languishing from lack of direction.
Unit allocations for standard product are often cannibalized for special orders. Cincom has assisted one manufacturing company with integration and inquiry-to-order problems that occurred at least once a week – often several times a month. A symptom of a deeper problem, manufacturing managers went after the higher margins on custom projects and let products slide. This resulted in additional materials being expedited for orders to existing customers, and depending on the supplier’s stock, it had a major impact on the ability to meet – or not meet – the original date.
Quoting systems for projects exist on the back of whatever piece of paper is convenient. In the largest and most complex of manufacturing industries, such as the manufacture of heavy trucks, this is commonly the case. Sales will often joke that the quoting system is really a pen – nothing more – that leaves much to interpretation and analysis once a sales representative gets back to their office and starts actually building the quote.
This is an edited excerpt from the Cincom whitepaper “Transforming Special Orders Into Products.” To read the full whitepaper, visit our Resource Center at www.cincom.com/lrc. (Email registration required.)