This morning I was talking to the VP of business process improvement for a company that sells industrial machinery. Their products are highly configurable. She told me that every year they have 50% new configurations they have never seen before. The number of choices on their products has grown over time. ”A salesperson can’t know everything about the product,” she said. “Customers want a few choices, and before you know it, the quote has crept into a configuration that’s bad for the customer and bad for us. “
As the VP explained, the biggest opportunity for complexity management is at the point of taking an order. A customer wants to be guided to complete their order. This concept is called Demand Shaping. There are myriad ways a configurable product can be ordered. However, each customer cares only about a few features that are of high importance to him or her.
The ability to take that input and guide the customer by completing the configuration is invaluable. This also presents a tremendous margin lift opportunity by guiding the customer away from configurations that are bad for the company because they have warranty issues, parts delay issues, supplier issues. I hate to sound cliché – but it’s a win-win situation!
The salesperson’s line to the customer: “Help me to help you!”
And tying back to my earlier posting, When the tide goes out, the VP said that volumes are declining. It is forcing the company to take a hard look at all product offerings, especially the bad ones.
Interesting stuff to read…