Expert Information - 21.11.19

Product Configurators on the Rise

From Digital Customer Experience to Efficient Poduction

Many companies would love to offer their customers products with more diversity and options for customization. However, higher production costs are holding them back. Configurators can solve this dilemma. With the right setup, they can be used to configure customized products while ensuring efficient production, even down to a lot size of 1.

According to a study of the University of Applied Sciences Central Hesse (THM), small and mid-sized enterprises still have plenty of room for improvement where digital business processes are concerned. Among the various business divisions, even the frontrunner, procurement, exhibits a level of digitalization of only 54 percent. The situation with core processes like production or sales is a lot worse. Only every third company offers their customers a product configurator. German mechnical engineering companies are well aware of this deficit. A study of the Mechanical Engineering Industry Association (VDMA) shows that they have adjusted their IT priorities accordingly. Variants configuration tools are currently ranked 7th among the top ten of IT investments in mechanical engineering. In 2016, they were still also-rans in place 18.

The manufacturing companies expect a faster implementation of individual customer requests at manageable costs and a higher sales efficiency from the configurators. In order for these advantages to materialize, a series of prerequisites must be met. In this article, the ERP provider proALPHA introduces the seven most important ones:

  1. Convince users with visualizations
    In order for customers to be able to picture your products, they need sketches, three-dimensional models, or part drawings. The sales employee can then guide the prospective customer to find the product that exactly matches his idea in form, color, size, and other features. As this convinces the customer more easily, Sales become more successful.
  2. Check plausibility
    Not every configuration makes sense or is feasible under technical aspects. A configurator prevents absurd combinations and confusion, provided that it only displays technically possible variants with the right prices. If it features a completeness check along with the plausibility check, the error rate is reduced even more. That way, even new and inexperienced sales employees can successfully close sales.
  3. Avoid data silos
    A configurator running as an isolated application on a website or as a sales app might help you take customer requests. If it can't communicate with the ERP system, however, your company is not using its potential to the fullest. Instead, you have to invest more time updating data in yet another isolated solution.
  4. Define and pass all parameters
    The sooner all product properties are defined, the better. If the ERP system adopts the data directly from the configurator, you save valuable time. Production-relevant data are passed directly to production. Consequently, even a lot size of 1 can be produced with highest efficiency.
  5. Provide commercial data
    Besides the price, the delivery date is an essential purchase criterion for many customers. If the sales representative can provide information about the delivery date already during the sales talk, this creates additional trust. This is possible if the configurator determines the date based on the actual capacity utilization. A deep integration into the ERP system is an essential prerequisite here as well.
  6. Create quotes with one click
    Cover letter, costing, drawing and user manual: It should be possible to create all elements of a quote directly from within the configurator. Quote texts and values must be adjusted to the respective customer. Defined formulas and rules make sure of that.
  7. Self-service option
    In case of products requiring a lot of consulting, a sales representative should always be there to help the customer configure the product. For less complex requests, you might want to offer a web portal. There, customers can configure their product of choice themselves anytime and from anywhere, and order it immediately.

The appropriate configurators significantly speed up sales processes and make sales more successful. Your employees can dedicate more time to customers, since they don't need to deal with data entry and transmission. Furthermore, they can attend to more customers and give more quotes over the same period of time. And there's even more to it: A seamlessly integrated configurator automatically passes on the required technical information needed for the next steps. This makes it the starting point of a completely digital process chain.

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Susanne Koerber-Wilhelm will be happy to answer your questions and provide you with further information about proALPHA.

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