Live Product Innovation, Part 4: Configurable, Personalized Products For A Lot Size Of One

John McNiff

In Part 1 of this series, we looked at how in-memory computing affects live product innovation. In Part 2, we explored the impact of the Internet of Things (IoT) and Big Data on smart connected products. In Part 3, we approached the topic from the perspective of process industries. In Part 4, we examine what’s needed to achieve a “live” segment of one, a lot size of one.

Configure, price, quote. CPQ. We all like an acronym. CPQ has become its own sector, and just as product lifecycle management (PLM), the business strategy, was hijacked by CAD and engineering applications, CPQ has been hijacked by sales solutions. But that ignores what it means to configure.

We also now have configuration lifecycle management (CLM), which we thought might help articulate what’s required. But the definition of CLM seems to be going down a silo, as well.

The fact is that in a live business, building a lot size of one requires more than a fancy Web interface and configurator. It involves the complete process of defining, selling, building, shipping, servicing, and maintaining a product, system, or solution — connected, integrated, embedded, and intelligent throughout the full value chain.

Death of a salesman?

I’m not saying CPQ isn’t valuable. It is. Having your salesforce in the field with the customer, configuring a product on the spot with nice visualizations, certainly beats lugging around a catalog, spreadsheet, and mobile phone to check if options are allowable.

Website-based configurators likewise offer a super experience. But how long does it take to deliver? Automotive is often cited as the prime example, but delivery cycles range from six to 15 months. Without connection to design, manufacturing, fulfillment, and service, it’s still just a fancy Web interface.

A lot needs to be done before we get to the sales guy. Configuration engineers need to know the compatible options. Designers need to understand whether products are compatible across hardware and software. Logistics needs to determine whether parts and combinations can be sourced and delivered. Suppliers need to know when to supply components. And so on.

Convergence on a platform for change

Product data, configurations, bills of materials (BOMs), and variants are integral to designing, selling, and making personalized products. But PLM comes from an engineering-only view. CPQ comes from a sales-only view. Manufacturing comes from a production-only view. Three domains, all with different views of the same product.

What’s changing now is the speed required to deliver a lot size of one. Consumers are no longer willing to wait 15, six, or even three months. Innovation is moving from mechanical features to embedded software, driving a need to condense design cycles – and a convergence of silos. Non-integrated, non-real-time solutions won’t support the next wave.

You need real-time intelligence not only to understand customer needs but also to provide designers and configurators with analysis to help them determine what will work, what can be sold, and what might be compatible. That also affects the supply chain, because partners need to know which parts are allowable and when they need to ship.

Once it’s designed and ordered, you must build and ship the configuration to specification. That doesn’t just involve which components have been selected. It also affects the definition of parameters, tooling, inspections, certifications, and so on. The production system must be updated with the exact configuration and build definition for the single unit coming into production. The shop floor system needs this data synchronized in real time. The same goes for calls to suppliers and logistics.

The result is essentially a distributed design function with concurrent, parallel lifecycles and lifetimes. Even for large, complex products, while the core platform might involve a multi-year program, shipping in configurable, custom designs occurs on a much shorter cycle. Yet you still need to synchronize and control everything from order to end customer.

The good news is that a solution is on the horizon. A platform for managing live product innovation can link engineering configuration with sales and manufacturing configuration. Such a solution must offer:

  • The ability to be not only integrated but also embedded across sales, design, manufacturing, supply chain, and service
  • A real-time data architecture powered by in-memory computing to correlate Big Data from “things” and people directly with business processes and systems of record
  • Intelligent tools for machine learning, prediction, and real-time analytics to help your people recommend and validate configurations and options that can be built and will sell
  • An open architecture to support “brownfield” realities and allow interconnectivity across systems

“Advanced variant configuration” is coming – and it will allow a live segment of one, lot size of one, for the first time.

Want to learn more about live product innovation? Join us at SAPPHIRE NOW May 16-18 in Orlando, Fla. We’ll be discussing these topics and more. Hope to see you there.

John McNiff

About John McNiff

John McNiff is the Vice President of Solution Management for the R&D/Engineering line-of-business business unit at SAP. John has held a number of sales and business development roles at SAP, focused on the manufacturing and engineering topics.