The world economy trades countless products among industries and consumers. Across that myriad of products, companies tailor their processes for how product lines are planned, engineered, manufactured and delivered. A product variability continuum of approaches ranges from standard products, configurable products, engineer to order and purely custom offerings.
Really the most variable product definition is a blank sheet of paper – the only limits are physics and imagination.
There are limited cases when companies can afford to define, engineer and build a unique new product from scratch and few customers willing to pay the price for a truly one-of-a-kind custom product. Product configurator capabilities are an enabler for reusing proven engineering, parts, material and tooling while also offering a variety of offerings to meet each customer’s requirements. Overall the engineering activities may be very similar to define a standard product or a custom product – the difference is when the engineering activity occurs relative to the customer order. The decision is based on business decisions of capacity and volume to most efficiently balance the cost of engineering and manufacturing the product to the market revenue opportunities.
For standard products there are two common approaches. One is to start from one design and iteratively derive similar additional standard products over time increasing size, capacity or additional features. The other is to define a platform up-front which configures to specific standard offerings. Electronics and consumer goods often follow these patterns as well as machinery and other industries where high volume manufacturing is the norm.
For configure to order (CTO) products, the definition includes a combination of product planning to decide what features to offer, rules constraining defaults and combinations of those features and the engineering of solution content to meet all valid combinations of those features. Generally the theoretical combination of product configurations is so large that it is impractical to configure into standard products – there might be billions of combinations! A relatable example of configure to order products are passenger cars – there are many colors, feature combinations and packages of features but any valid order can be built without additional engineering required to fulfill the order. Teamcenter Product Configurator provides tools for defining the variability, rules and configured content to execute CTO processes.
Engineered-to-Order (ETO) products are bid, engineered and built in as a response to a specific customer order. The product may not be more complex than the configure-to-order product. The decision to execute the business in this fashion may be based on a number of factors:
- For low volume production – engineering solutions in advance may not be practical
- For solutions with site or application specific requirements flexibility in modeling is necessary. For example, equipment installations in a facility such as switch gear.
- For some solutions analysis and computations are necessary to simulate the operation of the solution to determine another supporting requirement. For example the cooling requirements for equipment is a complex function of the equipment, its operating profile and environment.
- Elements of the solution require hands on engineering in combination with parametric or automated models.
A simplification of the distinction between CTO and ETO is when the engineering takes place even if the actual practices and methods are very similar. CTO products are predefined to document what is offered and ETO is expressed as a range of what is offered and a solution is defined to fulfill the order. Siemen’s Rulesteam solution provides tools for executing ETO processes with integrations to manage the order content in Teamcenter.
Another key understanding when evaluating the appropriate processes and tools is that the product variability continuum scenarios may blend the needs of CTO and ETO. Some products are mostly configured to order except some elements of the finished product or integration of content requires analysis, calculations or hands on interaction. An example is the frame rail and positioning of assemblies to the frame rail of a truck. Most of the content is configured but the final integration and interfaces may require ETO methods. Similarly some engineer to order solutions are composed of standard parts and configured products – the refrigerators and freezers in a retail store has site and aesthetic requirements and the power and compressor needs are computed based on the units included, ambient conditions, loads and operational assumptions. Then based on those requirements switch gear, compressors and heat exchangers are sized and configured.
To be successful in the marketplace more companies are configuring their products to be more agile with the dynamics of providing optimal products for customer requirements. Whether products are standard from a product platform or engineered to order products, the Siemens Teamcenter Product Configurator and Rulestream engineer-to-order solutions are complementary. Furthermore, if the configuration needs of a product line evolve the approach and solutions are on a continuum to support that evolution. To penetrate a new or emerging market segment, engineer to order tools and processes can be used to extend the product to meet new requirements. Conversely, a line of business met with engineer to order processes may mature to a point that it becomes more efficient to focus, streamline and optimize the logistics and manufacturing to a more discrete configured to order offering of proven solutions.
Whatever your industry or product, Siemens PLM is uniquely situated to support the full product variability continuum of use cases. Check out a previous blog on Integrated Product Definition and look for more information about Teamcenter BOM management here. If you’re interested in learning more Teamcenter BOM management, you might consider subscribing to our BOM Management label here in the community blog.
About the author: Mark Heinrich is part of the Teamcenter Integrated Product Development management team specializing on BOM management and product variation management.