{"id":19191,"date":"2025-03-11T12:38:02","date_gmt":"2025-03-11T16:38:02","guid":{"rendered":"https:\/\/blogs.sw.siemens.com\/teamcenter\/?p=19191"},"modified":"2026-03-26T09:02:28","modified_gmt":"2026-03-26T13:02:28","slug":"configuration-profitability","status":"publish","type":"post","link":"https:\/\/blogs.sw.siemens.com\/teamcenter\/configuration-profitability\/","title":{"rendered":"Customization is booming! What about profits? \ud83d\udcb0"},"content":{"rendered":"\n
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\ud83d\udd11 Key takeaways from Tech-Clarity\u2019s latest research: the future of product configuration for industrial machinery<\/h2>\n\n\n\n

The growing demand for product customization presents both opportunities and challenges for industrial machinery manufacturers<\/a>. According to Tech-Clarity\u2019s latest research<\/a>, 94% of manufacturers expect product customization to continue increasing over the next five years.<\/strong> 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.<\/p>\n\n\n\n

Tech-Clarity<\/a> 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<\/strong>. This transition enables manufacturers to provide customization while reducing complexity, engineering effort, and cost where possible.<\/p>\n\n\n\n

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<\/a> while embracing CTO where feasible.<\/p>\n\n\n\n

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As Geoff Leach, a senior engineer from Ingersoll Rand, notes in the study:<\/p>\n\n\n\n

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Customers want it faster. CTO, taking out the ETO element, is helping us get there\u2026 Engineering is expensive, and CTO reduces our engineering hours. <\/p>\n<\/blockquote>\n\n\n\n

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.<\/p>\n\n\n\n

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\ud83d\udcb0 The cost of complexity and the need for smart configuration<\/h2>\n\n\n\n

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\u2019s research shows that 67% of companies believe accurate quotes are the most impactful driver of profitability, yet 75% face challenges in cost estimation<\/strong>.<\/p>\n\n\n\n

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.<\/p>\n\n\n\n

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. \u201cOur configurator enables us to estimate projects with increased speed and accuracy. That increases our opportunities to secure more jobs,\u201d explains Stone Kane, Business Analyst at Schumacher Elevator.<\/p>\n\n\n\n

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\"configuration\"<\/figure>\n\n\n\n
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\ud83d\udee0\ufe0f How Siemens supports the future of product configuration<\/h2>\n\n\n\n

Siemens Digital Industries Software is at the forefront of helping manufacturers navigate these challenges with Teamcenter Product Configurator and Rulestream.<\/p>\n\n\n\n