Traditionally, physical product manufacturers haven't been challenged with enabling product customization like they are today. With a consistent stream of innovative technological advancements in ecommerce, customers have become more empowered than ever before. Today, they have access to more options than ever before, scoping out the perfect fit for their needs. Product manufacturers can therefore no longer get by making one product that fits all.
So, what does this mean for your company? It's time to seriously consider customization. The world is fast-paced, and manufacturers need to move just as quickly. Building a product precisely for customer needs is crucial for companies to remain in business.
Philip Kotler, the father of modern marketing, said, "It is no longer enough to satisfy your customer; you must delight them." A critical aspect in the manufacturing world that is highly dependent on customizing complex products is Engineer To Order (ETO). Designing products to meet customers' unmet needs result in delighted customers.
What is Engineer-to-Order (ETO)?
ETO is a process of building a unique and sophisticated product every single time. It is not a repeat manufacturing process. Products are designed and produced specifically for a customer order, rather than being pulled from stock. For configuring a product according to your customers' requirements, physical product manufacturers, creators, and designers need to leverage customer feedback early in the product design and development cycle. Doing ETO well has several benefits, such as:
- Maximizing customer satisfaction
- Improving profitability
- Boosting employees' morale
- Bringing desired and customized products to the market faster
This contrasts with the Make-to-Order (MTO) and Configure-to-Order approaches, where standard products are either assembled or configured based on customer requirements. ETO products, being unique products, often involve complex products that require a significant amount of engineering changes and design process adjustments before reaching the production stage.
The Role of Modern Cloud-Based Solutions
In traditional manufacturing, the ETO process begins with a customer's RFP (Request for Proposal). The engineering team then evaluates the RFP, leading to the creation of a product design tailored to the customer's specifications. This design process is followed by order manufacturing, where the production team crafts the new product. The entire workflow, from product development to the finished product, is often lengthy, leading to extended lead times.
Digital transformation has revolutionized the ETO manufacturing environment. ERP (enterprise resource planning) and MRP (material requirements planning) systems were once siloed and separate from the rest of the traditional product management activities. Now, their functions are incorporated directly into the product lifecycle management (PLM) workflow, when using a seamless cloud-native solution. Here's how:
- Real-time Data Access: Cloud-based solutions offer real-time insights into the production process, supply chain, and procurement. This functionality ensures that manufacturing companies can adjust their production schedule promptly based on real-time demand and supply chain changes.
- Automation: Automation of the ETO process flow, from product configuration to routing, reduces manual errors and speeds up the production process. This is especially crucial in industries like aerospace, where precision is paramount.
- Bill of Materials (BOM) Management: A cloud-based ERP system can dynamically update the BOM, reflecting engineering changes and ensuring the production team and manufacturing team are always aligned.
- Lifecycle Management: Modern solutions streamline the entire lifecycle of ETO products, from the design phase to delivery, ensuring profitability and customer satisfaction.
- Case Studies: Cloud-based platforms often come with a repository of case studies. These studies provide insights into best practices, helping manufacturing companies refine their ETO processes.
Benefits for Manufacturing Companies
By integrating cloud-based solutions, manufacturing companies can:
- Reduce lead time by optimizing the supply chain and production process.
- Enhance profitability by minimizing waste and improving workflow efficiency.
- Cater to specific customer orders with greater precision and reduced errors.
- Improve product development, ensuring that custom products meet or exceed customer requirements.
As you could imagine, if something goes awry while making such a complex and highly customized product, the cost of reworking could be significantly higher. And what if your customer buys a faulty product? The damages resulting from product failures could lead to dissatisfied customers and have a severe negative impact on profit margins.
Ensuring quality must, therefore, be an integral part of the entire ETO process. Today's customer wants a smooth and frictionless product experience. Inferior quality products could cause inconvenience, and resulting delays could potentially make your customers switch to your competitor's products.
Small variances can potentially lead to major impacts causing permanent damage to your brand reputation. It is, therefore, pivotal to accurately forecast the overall costs and timelines while providing your customers with a cohesive platform to help build high-quality, custom-built goods. You need to combine product and customer records to leverage customer insights for building such highly customized goods successfully.
The Future of Custom Product Management is Here
Propel's highly configurable, collaborative, and secure platform incorporates the next-generation product lifecycle management (PLM) as well as Salesforce's multi-tenant modern cloud capabilities. Our solution acts as a single source of product truth by bringing customer insights earlier to the product design process, which ensures that the right products ship to the right customers.
Such a unified and collaborative experience across the value chain helps with exceeding customer expectations, communicating product updates, being on schedule, and correct cost estimations. Your customers must never wait for the products they love for longer than they really should!
Explore Propel’s unique advantages when it comes to custom product development and request a demo today.
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