“Know what your customers want most and what your company does best. Focus on where those two meet.” -Kevin Stirtz
In our previous blogpost on time to market, we mentioned how the need for customization of products doesn’t necessarily take precedence over the importance of faster time to market. Like every other scenario, there is a flip side to this coin as well. Let’s see what it means for engineer-to-order (ETO) manufacturers.
ETO manufacturers make products that are highly customized. These products and respective variants address very specific needs of customers, who are mostly brand owners. The design and development process is initiated only after receiving the order. This product complexity demands an extended design phase and as a result, meeting delivery schedules is a big challenge faced by such manufacturers.
Today’s consumer ecosystem is highly dynamic and demands for everything to be faster, whether it is the internet or fighter jets. Volatile markets see billions in growth, and also steady stocks crash, all within the blink of an eye. Unpredictable buying behavior and little brand loyalty is giving brand owners sleepless nights. Time to market is one of the most crucial factors for new products to improve competitive advantage over other players.
In a new market entry, innovators have the advantage of a pioneering product, less competition, better positioning and longer product life. They can also restrict entry of late majority or laggards by increasing the barriers. The result of which being that the innovators and early adopters always acquire the sweet spot for sustained market share and improved margins.
But, is faster always better? Well, that is arguable.
An over emphasis on faster time to market can make customization a challenge. But in the present scenario of erratic consumer behavior, product differentiation has become very crucial to brand owners. Late entrants have the ability to overthrow early movers if their product is able to deliver high performance and reliability at a competitive price.
ETOs are constantly under pressure to deliver innovative products and solutions that will disrupt the market, but in less time. High customization also means lesser volumes and higher variants. In this case, driving profitability through volumes could be difficult in the present competitive global market.
Moreover, for any manufacturer, ‘customer need’ is at the helm of all the priorities since it is the key driving factor of business. And, with customization being the USP of ETO manufacturers, it is a challenge to compromise customization over time constraints. Can these manufacturers have best of both worlds?
Yes, they can! ETO process is complex and has multiple stake holder teams involved, which may be spread across the globe. In order to ensure that customization is done without compromising time, ETO can follow some best practices like standard parts library, better engineering collaboration on BOM, use modular parts and assemblies, efficient and standard part numbering system, etc. Use of these simple and holistic approaches can result in advantages that are manifold and have a positive impact on the triple constraints of time, cost and quality.
ETO or not, striking the balance between these triple constraints is the key to unlock the problems of time vs customization. Click the image below to learn more about various factors and solutions for solving the time vs customization challenge.
Another version of this blog has been published in ERPVAR blog as Cloud Manufacturing Software for Engineer-to-Order Manufacturers.