Customization is booming! What about profits? 💰
🔑 Key takeaways from Tech-Clarity’s latest research: the future of product configuration for industrial machinery
The growing demand for product customization presents both opportunities and challenges for industrial machinery manufacturers. According to Tech-Clarity’s latest research, 94% of manufacturers expect product customization to continue increasing over the next five years. This trend reflects growing customer expectations for tailored solutions, whether in heavy equipment, material handling systems or precision machinery. However, while offering to-order products brings competitive advantages, manufacturers struggle to balance customization with efficiency, cost control, and profitability.
Tech-Clarity is an independent research firm dedicated to helping industrial companies learn how to improve performance through digital transformation. Their recent research, funded by Siemens, highlights a fundamental shift in how manufacturers approach customization: 76% of companies are moving from Engineer-to-Order (ETO) to modular Configure-to-Order (CTO) approaches. This transition enables manufacturers to provide customization while reducing complexity, engineering effort, and cost where possible.
ETO remains essential in many industrial machinery applications, where high-complexity, specialized solutions are required. The key takeaway? Industrial manufacturers must find ways to make ETO more scalable and efficient while embracing CTO where feasible.
As Geoff Leach, a senior engineer from Ingersoll Rand, notes in the study:
Customers want it faster. CTO, taking out the ETO element, is helping us get there… Engineering is expensive, and CTO reduces our engineering hours.
While many companies are shifting products towards more modular CTO models, others are focused on making ETO more scalable and automated, ensuring that complex, highly customized products can still be delivered efficiently.
💰 The cost of complexity and the need for smart configuration
Despite efforts to streamline customization, 64% of manufacturers still report cost overruns as a major challenge in delivering to-order products. Many struggle with developing accurate cost estimates and ensuring manufacturability, leading to unexpected expenses, delays, and even customer dissatisfaction. Tech-Clarity’s research shows that 67% of companies believe accurate quotes are the most impactful driver of profitability, yet 75% face challenges in cost estimation.
The research points to a solution: automation and intelligent configuration tools. Companies leveraging PLM and automation for configuration are twice as likely to generate accurate quotes, shorten lead times, and reduce engineering workload.
For example, Ingersoll Rand reduced engineering hours by about 75% by integrating CAD automation with PLM, demonstrating the impact of automation on efficiency and profitability. Similarly, Schumacher Elevator transformed their quoting process to improve speed and accuracy. “Our configurator enables us to estimate projects with increased speed and accuracy. That increases our opportunities to secure more jobs,” explains Stone Kane, Business Analyst at Schumacher Elevator.
🛠️ How Siemens supports the future of product configuration
Siemens Digital Industries Software is at the forefront of helping manufacturers navigate these challenges with Teamcenter Product Configurator and Rulestream.
- Teamcenter Product Configurator supports a CTO approach, allowing manufacturers to create validated, buildable product configurations that balance complexity and efficiency. By managing variability across disciplines—mechanical, electrical, electronic, and software—it ensures accurate, streamlined configuration for sales, engineering, and manufacturing
- Rulestream supports ETO needs by automating engineering decisions and ensuring that custom configurations are manufacturable from the start. By integrating engineering rules, CAD automation, and PLM, Rulestream helps companies eliminate manual inefficiencies while maintaining flexibility in highly customized product lines.
For industrial machinery manufacturers, this means shorter lead times, reduced costs, and improved quoting accuracy—critical factors in an industry where precision, speed, and profitability must go hand in hand.
🔍 Industrial machinery leaders are already seeing results
Several manufacturers in the industrial machinery sector have successfully leveraged Siemens’ configuration management solutions:
- Mitsubishi Heavy Industries Compressor International streamlined its ETO processes with Rulestream, reducing cycle times and improving accuracy in customer proposals. (Read more)
- Riello, a manufacturer of industrial heating systems, standardized business processes and improved quoting accuracy with Rulestream, reducing the time from offer to delivery. (Read more)
Also, make sure to download the Tech-Clarity research report.
📢 Are you ready for the future of mass customization?
As industrial machinery manufacturers continue shifting toward CTO while optimizing ETO, adopting the right tools is critical to staying competitive. Learn more about how Siemens’ product configuration solutions can help your business drive efficiency, accuracy, and profitability in the age of mass customization.
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