Product Customization – Boom or Bust

A challenge that many companies (small & large) wrestle with is the issue of product customization outside of the standard features that allow some form of user customization at order configuration. This often requires an investment in engineering, new documentation, quoting an engineering change charge and/or new product price and tailoring the manufacturing/build/test cycle to deliver a quality product – on time.

Why is this a difficult question? Sales rushes in with an order from a valued or targeted customer to buy the standard product except for . . . In the desire to either keep the customer, add a new customer or (more probable) meet sales objectives the order is accepted. The question is whether your order process is designed to operate effectively in this mode.

Is the sales process sufficiently capable of capturing the necessary specifications without committing an engineer to an onsite meeting with the customer?

  • Do you have engineering change staff (often called sustaining engineering) or will you need to siphon off valuable engineering time from engineers who are committed and personally invested in the design of new products?
  • Do you have a production build group that has the flexibility to efficiently do “one of” builds?
  • Is your accounting process setup to accurately collect the cost of this type of business so that you know where your profit (or loss) is occurring separate from your normal production business?

The answers to these questions are not good if customized products are not the focus of your business model. Too often the end result is business that you wished you had not taken or “bought” which is more likely the case. The goodwill with a valued customer is put at risk, the future with a new customer is questionable, and your profit margin is unknown if the customized product does not have the same product quality and performance your standard products have.

More significantly is the lost opportunity of the organization to keep valuable (and hard to find) strategic resources applied to the future of the business. One hour (you wish it would be just one hour) of engineering time redirected to a “one of” customized project is not just one hour out of the day as it is difficult to get back into the flow with where the project was let alone the impact on engineering morale when they are used for a project like this.

Consequently the promised upfront gains of an organization redirecting their business model to take on a customization project are not met. A common result of this decision is:

  • profits performance is compromised,
  • customer relationships are strained, and
  • strategic direction for the future of the business is put into limbo.

The answer? Stay the course and do what you do well and avoid the temptation to be a marketplace super hero!

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