Build a Resilient Supply Chain by Navigating Product Complexity Challenges

Summary

The pandemic pushed many manufacturing organizations to make technological investments that accomplished the primary short-term goal (keeping operations going) but weren’t, in most cases, significant steps in the overall digital transformation journey.
 
Now, four years out, they’re taking another look at their investments and realizing they haven’t reached what they anticipated in terms of ROI and results. They need to fix the situation from a more holistic point of view and to be able to adapt new technology to their purposes. At the same time, they’re also grappling with additional challenges they have less control over, like supply chain reliability and geopolitical strife which require a greater scale of agility.
 
Getting a handle on this complexity of challenges for manufacturers will separate the leaders from the laggards in the industry, and really begins with getting in control of their product data across the enterprise, creating a shared source of truth so they can get the configuration right and adjust the configuration options based on the shifting demands, accessibility and compliance requirements, just to mention a few.

A wealth of challenges

There are three major challenges that manufacturers must overcome. One is inadequate technology for today’s needs: legacy tech holding their digital transformation back. Many organizations were in the very early stages of digital transformation when the pandemic began–they knew they couldn’t interact with the market, their consumers or partners in the same way any longer, but the pandemic also meant they needed to do something quickly for the short term.
 
What we’ve seen is that many organizations made baby steps toward digital transformation, but there’s still a long way to go. Maybe they adopted a solution that was very focused on the sales perspective, for instance, but it didn’t get integrated into the back end or the overall IT landscape. It stayed isolated. Maybe they invested in a CPQ system, and it’s not doing what they expected–it’s not accomplishing what the company set out to do.
 
Since then, manufacturers have had the opportunity to reconsider these investments, evaluate them and think about what needs to happen next to accelerate their digital transformation enterprise-wide and through the entire product lifecycle.
 
Concurrently, organizations are grappling with ever-increasing product complexity. Customer demands for more customization and choices continue to increase. As a result, the complexity of products and associated product design, manufacturing and sales processes also increases. Product lifecycles are also getting shorter, requiring a constant flow of new products with high-value features and capabilities. As complexity has increased and the demand for more customized products grows, organizations can’t keep up using their existing systems.
 
And then of course, there are the global challenges, which can have a wide-reaching and long-term impact. Think about the semiconductor shortage, which took center stage in 2022 and though it’s improved, it’s still having ramifications. And of course, we can’t ignore the fact that geopolitical instability is a major concern in economic terms, too. It can erode trade relationships, for one thing. What can companies do if they have a lot of sub-suppliers in regions where the sociopolitical situation has become unstable? How do they still ensure they can manufacture, sell and deliver the right products? There are also increased sustainability requirements to consider.

Configuration technology to the rescue

Configuration technology–whether you call it composable product configurators, Configuration Lifecycle Management or product configuration tools–can help address all of the aforementioned challenges. In fact, a survey by IDC found that 83% of the best-performing manufacturers are using product configuration management solutions to deliver key business objectives.
 
The initial challenges often arise within the sales department, but addressing these challenges requires more transparency, more visibility and more coordination across engineering, manufacturing and sales. According to IDC’s findings, 33% of respondents said that connecting product design and engineering with sales & service is a top goal for the coming year.
  
Organizations need a single source of truth to ensure that all three departments know what products can be manufactured, configured and sold. Each department has their own rules that they’re wrestling with. For sales and marketing, that could be things like: What are the emission rules in California? What are the colors you can choose from if you’re buying the product in Australia? Engineering and manufacturing also have rules and requirements that must be followed.
 
With product configuration technology, organizations can ensure all departments are operating from the same data; they can ensure that the sales department doesn’t sell a product that can’t be manufactured and that engineering doesn’t design a product that isn’t marketable. This doesn’t have to be an overnight, all-or-nothing prospect, though. It can be done incrementally while achieving value with each step.
 
By connecting functions, systems and business processes in one configuration platform, manufacturers can gain a multi-functional view of their configuration lifecycles and quickly adapt to changing market needs. This vastly decreases time to market and increases revenue-generating opportunities–and at better margins. Companies can significantly decrease modeling and coordination effort and increase efficiency because sales configurations can be created in a few minutes. And employees can support significantly more product variants with the same resources.

Putting complexity in its place

Competitiveness starts with the ability to configure products. Today, most consumers and companies aren’t buying products, per se–they’re buying the configuration that fits them; they’re not buying off-the-shelf, out-of-the-box solutions.
 
Manufacturing organizations need to be able to get this process locked in across departments and move away from the old mindset of having different functions operate in silos. There’s technology today that can address these challenges and create an end-to-end approach that enables manufacturers to bring their products to market in a more agile, rapid and error-free way. Use the above information to choose technology that reduces product complexity and transforms your manufacturing approach.