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Product configuration is the process of customizing a product to meet a customer’s needs. It involves selecting components or features to create a personalized solution. Businesses, particularly manufacturers, use this method to tailor offerings to individual requirements.
Customers can configure products themselves via eCommerce platforms, or sales engineers may assist. This approach is driven by the growing trend of mass customization, which shifts away from traditional mass production to deliver personalized solutions.
How it works
- Customers can use configurators on eCommerce websites to personalize their purchases
- Sales or product engineers can configure products based on customer requirements
- Manufacturers’ internal sales personnel can configure products in conjunction with customers
Benefits
- Product configuration helps businesses meet customer demands
- It reduces errors and enhances overall satisfaction
- It provides a competitive advantage for manufacturers
Commonly involved in industries like automotive, electronics, manufacturing, and software, among others.
Examples
- Selecting a shirt in different colors
- Selecting different colors for shoe laces, tongues, and sock liners
- Selecting different widths and sizes
- Selecting flat or engraved soles
Why is Product Configuration Important?
Product configuration benefits both businesses and customers. For customers, it creates a smooth buying experience, ensuring they get exactly what they need. For businesses, it simplifies complex sales, speeds up quotes, and reduces order errors. A well-implemented product configuration system enhances efficiency, saves time, and boosts customer satisfaction.
Benefits of Product Configuration
Types of Product Configurations
There are different types of product configuration models based on the level of customization and complexity:
1. Select-to-order (STO): Customers choose individual components without dependencies, commonly used for simple products.
2. Pick-to-order (PTO): Customers select components but must have knowledge of compatibility.
3. Configure-to-order (CTO): Customers choose related and compatible product components. It’s common in industries like electronics, where customers can configure a product based on their preferences, such as choosing a laptop’s RAM, processor, and storage.
4. Assemble-to-order (ATO): Manufacturers pre-produce and assemble components based on demand, blending make-to-stock and make-to-order models.
5. Make-to-order (MTO): Manufacturers produce products after receiving an order, which reduces inventory costs and allows for customization.
6. Engineer-to-order (ETO): Customers must design and create parts based on their unique orders for the most complex model.
Read more: types of product configurators
How to Automate Product Configuration
Automating product configuration can save time and eliminate errors. Configure, Price, Quote (CPQ) software allows customers or sales teams to input specific requirements, and the system generates the best configuration based on those inputs.
For example, a customer might choose features for a laptop—such as memory size, storage, and screen resolution—and the software suggests the ideal configuration. This automation increases efficiency and ensures the product meets customer needs.
Sales Configuration vs. Product Configuration
Sales configuration, often referred to as CPQ, helps businesses offer customizable products with variable pricing based on selected options. It speeds up the creation of tailored quotes and orders.
Product configuration enhances the shopping experience by dynamically showing the product in real time as customers select options, providing a complete visual overview and elevating their decision-making process.
Read more: What is a Sales Configurator?
Limitations of Manual Product Configuration
Manually configuring products is time-consuming and resource-intensive. Sales teams may need to spend hours communicating with customers to understand their needs and match them with available options, leading to potential errors or inconsistencies.
Automating the Process with Product Configuration Software
By using product configuration software, businesses can automate this process. Customers or sales teams input specific requirements, and the software generates the best configuration, ensuring accuracy and speed.
Conclusion
Product configuration is essential in today’s market, where customers expect personalized solutions. Automating this process with product configuration software helps businesses meet customer demands, reduce errors, and enhance overall satisfaction.
Frequently Asked Questions
Product configuration management uses software tools to help businesses sell and process orders for customizable products efficiently. These tools integrate with manufacturing to ensure smooth operations from sales to production.
- Bill of Materials (BOM)
- 3D Product Visualization
- CAD Models
- Error Safeguards
- Quick Quote Generation
A product configurator allows customers or salespeople to customize products by selecting features and components, ensuring the final product meets individual needs.
The configuration design of a product involves organizing its components to meet customer requirements. This process ensures the product works as intended while allowing customization.
In Salesforce, product configuration uses CPQ (Configure, Price, Quote) to customize products based on customer needs. It simplifies selecting features, bundling options, and pricing, improving the accuracy of quotes and speeding up the sales process.
A product configuration model outlines the components and relationships of a customizable product. It serves as a framework for creating various product variations that fulfill customer needs, ensuring a smooth workflow from sales to production.
