Don't Break the Bank: Custom Manufacturing Secrets Exposed
3 different ways to make custom products
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Don't Break the Bank: Custom Manufacturing Secrets Exposed
- 3 different ways to make custom products
By Andrei Kossyrine
© Xpress Software Inc. - All Rights reserved
http://www.xssoftware.com
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Making manufacturing more profitable is not a "one size fits all" solution. This change in thinking and operations is also not accomplished in a single step or procedure change. The following is one of a series of topics designed to enhance the profitability of manufacturing in general.
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Our last article - "Very Profitable Manufacturing: How to Quadruple Your Manufacturing Profits in 90 Days or Less" - only wetted your appetite for details, according to many emails we have received asking us for more information.
OK, let's dig deeper. Let's take a look at these three ways you can handle the customized manufacturing process:
1) By hand. Yes, that means manually. You stamp the order printout or highlight a product code with a special color marker. Then you must make sure everybody knows what option to change. You write all the customization instructions as "comments" on the order.
2) Through a computerized product configurator. A state-of-the-art computer system with a product configurator module is a step up from manual processing. Your order entry person types a gazillion letter/number combination to identify each unique product in the order and the mechanical configurator creates all necessary SKUs, parts and material codes. Although much better than customizing order processes by hand, a few major drawbacks exist:
A large number of options means choices for your customers but it also means an SKU list totaling in the millions in a few short months.
An in-house or external group of programmers needs to be available constantly to tweak configurator rules.
Maintenance of expanded Bill of Material (BOM) is a daunting task on its own. Try updating multiple price levels on a few million SKUs overnight.
3) With a Hybrid BOM. You have one SKU for each "master" product with a Hybrid BOM, using a rule list for all colors, sizes and options. That way you don't need an SKU for every color or option combination. The hybrid system automatically produces all necessary documents (shop orders, pick lists, assembly drawings, routing sheets, etc.) for each customized product. You don't have to. And yet, the best part is the process automatically adds an additional 5, 10 or 15-plus percent to your customers' orders according to the real time pricing structure.
Take a closer look at this example:
Let's take a regular office desk. The 30-inch by 60-inch typical desk consists of a top, two legs and a back panel and costs $100. A customer tailors his or her desk order opting for mahogany as the color, a 58-inch width and a 29-inch length.
Your Hybrid BOM system recognizes that the non-standard dimensions, increases the price to $120, creates all necessary adjustments to the manufacturing documents, and creates CNC programs and AutoCAD product and part drawings.
Your customer receives the personalized product he or she wanted, and you receive an additional 20 percent of the product price that directly boosts your bottom line!
Everybody wins - your customer is satisfied and your profits soar - all through automated customer order processing.
P.S.: Your Distributors Want Custom Products Too
Customized manufacturing is a service not only for the end users. Sometimes the ONLY way to increase your business with other companies is through customization. Big distributors, like Staples, Wal-Mart, LaZBoy, BestBuy and others, often dictate their "personalize" their product preferences from appliance handles, food packaging, to clothing designs and even a melodic tune to replace standard microwave beep.
If you deliver your mass customized products quickly and efficiently, you will get all the business you can handle. And then some!
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Since 1996 Xpress Software Inc. has provided
technical assistance in lean manufacturing methods,
computer systems and business process automation
to maximize manufacturing profits.
Visit its website www.xssoftware.com or contact
Andrei Kossyrine at andrei@xssoftware.com.
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