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What is Custom Product Development?

More and more companies are investing in custom product development. Learn how they're using this competitive advantage in the market, and how it may be easier to achieve than you think.

As a response to ongoing pressures to reduce costs, establish a shorter time-to-market, and increase product value, companies have invested heavily in the development of their products. While market conditions, business goals, and job functions continue to change, organizations should take action to gain the competitive advantage.

The unique needs, wants, and pain points of consumers will often require highly specialized solutions. Information systems are essential to reliable management of the entire product development process — even more so if a design is being produced for the very first time.

When it comes to creating a highly specialized product for specific users, utilizing the right technology can save your business both time and money in the delivery of high-quality products.

What is custom product development?

Custom product development (CPD) is the process of developing engineer-to-order products. Custom development cycles either create a new product or enhance the functionality of an existing model. These products are goods or services which are modified, altered or customized according to a Statement of Work. This is a design document that ensures all aspects of development processes, solutions, and results are in alignment with an organization’s requirements.

Propel Software allows users to coordinate between customers, sales, engineering, and product teams to quote and deliver custom products that exceed profit margin targets. Get a demo.

Why companies invest in custom product development

Companies invest in custom product development because of the freedom it gives them throughout the design process. Custom manufacturers offer specialized services that the typical vendor may not have access to, such as machining, sheet metal fabrication, automation, validation, and hardware installation.

Depending on the industry, manufacturing partners may take on further production responsibilities during the assembly of custom products. In turn, businesses are enabled to address specific market needs and create natural extensions of their current product portfolios. An end-to-end custom product development service could also be useful for organizations looking to outsource manufacturing to third-party vendors rather than keeping it in-house.

Any custom product development solution should:

  • Be cost-effective, especially in the long term
  • Have the ability to integrate with existing systems
  • Include easily accessible maintenance and support options
  • Have 100% scalability

Industries that especially benefit from custom development cycles include technology, healthcare, and entertainment. The complexity of these, as well as other interactive, customer-facing businesses, makes having tailor-made solutions readily available all the more valuable.

Propel provided AMS Technologies with a collaborative platform to easily share product designs, changes, and document design decisions with customers, engineering teams and sales for custom-engineered products. AMS improved engineering throughput by over 500% after deploying Propel’s remotely accessible, cloud-native platform.  

Custom product development challenges

The challenges of creating products that are intuitive and configurable include:

  • Constant Communication - Ensure everyone is aware of changes in demand or any other events that could affect lead time. Stay involved at every step of the process. Be sure to communicate efficiently, which will allow everyone to budget with the goal of meeting deadlines.
  • Maintaining Quality - Keeping all parts of the process on schedule and at budget while having quality be consistent may be challenging, as different teams will have different deadlines and priorities to work with as production timelines change. Make sure to use collaborative checklists and calendars.
  • Short Lead Times and Price Pressures - Both sides experience pressure from one another. Demand is unpredictable and often fluctuates, while on the other hand labor-intensive operations may encounter setbacks as production carries on. Keep in mind that around 80% of a project's cost is generated during development, making it all the more important to be mindful of your overhead and work to keep manufacturing costs lean.
  • Process Agility - State-of-the-art development processes may not adapt well to change. Focus on outcomes and products instead of outputs and projects. This will help your process quickly respond to changes in the market while being flexible in regard to demand.
  • Adaptable Supply Networks - Drive business through nuanced understanding of your network’s unique strengths and use them to be effective. Creating a new process can be complex; expectations should be managed accordingly.

Custom products ultimately solve more problems than they create; however, it is critical to be aware of their limitations in addition to their values before investing development resources into them.

What is the custom development process?

The custom development process is an end-to-end plan for creating customized products.

  1. Requirements Definition - Determine everything that your product will need, from design through delivery and use. Communicate these product needs with supply chain partners and external vendors. Custom projects can often become complex, so it’s a best practice to make sure that your ideas are realistic. This methodology could include scheduling a consultation to determine if a partner meets the needs of your production process.
  2. Initial Payment & Prototype Development - Begin a partnership with a custom product development corp. As you create detailed plans that meet stakeholder approval, focus on long-term solutions that will allow both sides to benefit well into the future while also considering the balance between quality and affordability. Cooperatively develop a prototype as a proof of concept for both process and product.
  3. Prototype Production - Design and manufacture a prototype that is as close to the deliverable as possible. Then, evaluate the prototype metrics to see what changes, if any, need to be made before scaling up production. This will allow quality control and other decision-makers to decide how to proceed before production begins on a large scale. Additionally, consider how these changes will impact the user experience.
  4. Final Product Delivery - Using the refined development process, a final product is produced and delivered in accordance with all given specifications. Established sales channels are an effective way to generate leads as launch gets closer. At launch, be prepared with enough inventory to meet demand, while supporting the development team as a new development cycle starts again.

What you need in custom product development software to get to market faster

  • Integrated CRM and PLM - Cloud platforms offer accessible resources for all customer relationship management and product lifecycle management services.
  • Project Management - Utilize resources efficiently to meet deadlines and produce deliverables.
  • Responsive Change Management - React to changes in the market as they occur, while taking preventive actions to achieve future success.
  • Supplier Management and Collaboration - Engage in ongoing strategic discussion of project expectations and deliverables with suppliers. When design constraints arrive, collaborators should take this as an opportunity to be creative and put their knowledge to work. Internally, customer service, purchasing, and production teams should work together early and often as development begins to prepare a problem-free launch.
  • CRM, CPQ, & ERP Integration - Integrate your platform with project management essentials to further streamline production and sales. Managing multiple leads from a central resource can save time while helping all projects stay on track.
  • Flexible Configuration and BOM Management - Custom products must be intuitive and configurable to meet customer needs. Manage budget for entire projects on a collaboratively edited, up-to-date bill of materials (BOM).

These requirements allow you to realize savings in development time as well as design and production costs. Use custom development processes and software to adapt a product-centric approach to a customer-centric approach or vice-versa.

Read case studies for real stories of how to establish these processes successfully, and apply them accordingly to your business. Ideally, mass customization is profitable and sustainable. All plans should be made with realistic delivery coming first.

Using the best tools available is a proven path to business success. Learn more about how Propel’s platform enables custom product development for leading companies.

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Post by
Be'Anka Ashaolu
Former VP of Marketing, Propel

Be’Anka Ashaolu is an experienced marketing operations, content marketing, and demand generation leader who is obsessed with aligning talent and responsibilities to drive measurable results. She began her career in journalism before quickly moving into marketing technology, sales operations, and integrated campaign execution in the legal, cyber security, and retail analytics spaces. Be’Anka is constantly striving to balance productivity with effectiveness, meaning: her teams don’t just get stuff done – they get the right stuff done.

Fun Fact: Be’Anka is the Co-Founder and CMO of Nirvana Soul Coffee Purveyors in downtown San Jose. She owns the coffee company with her sister, Jeronica. The two are only 11 months apart in age!

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Be'Anka Ashaolu