How to successfully implement a Custom Products Strategy
In my previous blog post Why you should offer customised products to your customers I explained why organisations from different industries (such as Capital Goods Manufacturing Business, Consumers Goods Industry, etc.) are increasingly offering customised products to their customers and how this product strategy helps them stand out from the competition become a so-called “Hidden Champion”. Following this, you got an insight into the (new) challenges that come along with adopting such a Custom Products Strategy in your organisation.
In this blog post, you learn how to avoid the pitfalls and take the right steps to a successful implementation of a Custom Products Strategy in your organisation.
A Custom Products Strategy with SAP Variant Configuration
In order not to lose very crucial time discussing the best possible custom solution for your customer during the offer phase, you should develop modular product structures and implement them in your ERP system. For this, I recommend implementing SAP’s Variant Configuration solution, providing Classification Solutions, Super Bills of Material (Super BOMs) and other Objects, such as Configuration Profiles.
Thanks to all these objects, the desired product variants can be derived from so-called Dependencies and are accessible to the sales team during the order registration. This means that a sales person is able to make the best choice between all the different product characteristics and can configure a custom product for his customer without losing valuable time discussing the feasibility with other departments. Next, the configured and ordered custom product will be created according to the data in the Super Bill of Material.
How to successfully implement SAP Variant Configuration
In my experience with implementing SAP Variant Configuration, I recommend to start this project with structuring your product spectrum. Most of the customers I helped, already had a good idea of how to organise their products. Since I, together with other PIKON colleagues, could bring fresh, external insights into play, we were able to add new approaches to the initial thoughts of our customers. I think as a consultant it is not only important to give an expert advice but also to listen very carefully to your customer’s own ideas and, of course, requirements.
Further, I recommend you not only pay attention to the business case (implementing a configurable product structure) and to its technical IT solution (SAP Variant Configuration) but also to developing a proper communication concept for the future users. This 3-Point-Project-Approach prepares and motivates them already at an early stage for the upcoming changes to their daily work and is crucial for a successful usage of the new solution after the go-live.
Our Template to structure all your products
We have created a template for structuring products. This helps you create individual product characteristics (such as e.g. housing colours and font colours), their forms (such as red, blue, green, white, etc.) and their mutual dependencies (such as housing colour blue only with font colour white). After entering these data, the template derives the so-called PIKON Complexity Score Index (PIKON CSI), which estimates the implementation costs based on our customer project experiences.
How you will benefit from a Custom Products Strategy
After the implementation of a modular product structure through SAP’s Variant Configuration solution, your sales department can use Super Bills of Material to configure order-specific variants. This enables them to react promptly to customer inquiries and customer requirements. In addition to that, the engineers are no longer bothered with creating occasional custom solutions but can now fully focus on their actual task: developing products.
With this approach, our customers have gained major productivity improvements: their different departments don’t lose any more valuable time on energy-consuming product configuration discussions. What’s more, their response time to customer inquiries has been reduced significantly, which has resulted in sealing more deals. One of our customers even managed to reduce his response time to customer inquiries from 12 to 2 days. Last but not least, the time to process new customer orders and to train new employees has also been reduced dramatically.
Contact us to learn during a live-demo how an efficient and effective Product Structure looks like.