Configurators Build Symbiotic Relationships with Engineering Web Site Visitors

Online configurators enable handling of highly configurable and made-to-order parts. This article explains new time saving advances in online configurators including achieving the same CAD download benefits, as explained in the two-part article “Building a Symbiotic Relationship with Engineering Web Site Vendors and Visitors” (Time-Compression Technologies November/December 2006 and January/February 2007). This article extends that discussion to include ‘Configurable’ and ‘Made-to-Order’ parts so that the whole spectrum of possible parts is addressed by this sales and relationship building, CAD download approach (see Figure 1).

Configurators—Next Generation CAD Configurators Save Time and Money

Configurators are proven engineering and marketing tools that increase productivity by simplifying and streamlining design, part selection and ordering processes for industrial suppliers:

• As an engineering tool, configurators created during product development can result in less physical prototypes and hence, reductions in product development time, costs and time to market
• As a marketing tool, configurators enable presentation of complex products to potential customers

Complex product configuration has historically been achieved through the use of paper catalogs, containing technical specifications, rules, constraints and decision tree ‘flowcharts,’ but often required experienced users to ensure a valid product was configured. Today’s configurators are computerized tools used by design engineers to configure custom components for inclusion in their designs. They are often made available by industrial suppliers to enable customers to select, configure, price and order multi-option components. Typically, these software configurators will not allow invalid or incompatible specifications to be selected and thereby eliminate errors and save hours of compatibility and specification research—just imagine being assured that every unique part is designed within the technical specifications, rules and constraints allowed for each component.

Now, new trends in the manufacturing market and the next generation software configurators have created a new sales and marketing opportunity for industrial manufacturers and distributors. Increased online searching for products by design engineers, new software innovations (like the patent-pending Visual Constraint Feedback™ technology) and integration with pricing and stocking systems provide instantaneous price and shipping information, SaaS (software as a service) and lower costs (for software, deployment and configuration). These components are all driving greater adoption and use of configurators by design engineers. By providing online configurators for your complex and multi-option products you can:

• Increase sales by making it quicker and easier for customers to select your products rather than your competitors’
• Attract customers and increase existing customer loyalty by reducing their time to market and, incidentally, speeding up their purchases of your products
• Free your engineer’s time to focus on new product design instead of helping customers configure products

When Should You Consider Using a Configurator?

Companies with configurable (multi-option) or made-to-order products should investigate using a configurator as part of an online (Internet or Intranet) presentation of those products. If necessary, multiple configurators for multiple product lines can be implemented—preferably all with a common user interface (UI) for ease of use. Extending this common UI theme, configurators can be part of an online catalog that also includes other, non-configurable products. Including your highly configurable products in the same catalog as your non-configurable products allows you to leverage common functionality, such as e-commerce, RFQs and CAD model downloads.

Configurators are used to capture knowledge in an ‘expert’ system and then make that knowledge readily accessible to internal staff, distribution partners and customers. They are commonly built to present:

• Existing products for service, sales, marketing, production verification and engineering use.
• Products in development—A configurator built prior to design finalization allows your engineering and marketing staff to visualize unforeseen design conflicts and holes in the functional performance. How often has your marketing staff declared “We thought it would do this” or “We need this function”? This usually happens after the product is complete, either when creating the instruction manual or worse, when they show early customers the product.
• Retiring product lines for maintenance and part stocking needs. Sometimes this is especially important before key staff retires and their knowledge is lost to the company. In the case of ASCO Valve (a division of Emerson Industrial Automation), they implemented a configurator for an older product line they plan on retiring, so they could ensure that their other product lines could cover all the applications that the old product line was covering.

In many cases, configurators are used as a user ‘front end’ and are integrated into a company’s CRM, PDM, CAD, PLM, ERP or other systems.

Who Uses a Configurator?

An ‘online presentation’ means Internet, Intranet or Extranet. Configurator users typically include your customer service reps, in-house and field sales reps, engineering and manufacturing (e.g. for training and technical support), distributors and customers. With such a breadth of users to address, it is usually preferable to use an Internet browser-based solution whereby there is no other software, than the browser, to install and support (SaaS delivers this).

How Do You Select a Configurator?

As of early 2007, the configurator market is highly fragmented and no clear leader has emerged. Many configurator software solutions are available in the manufacturing space, from configurator specific companies to catalog and ecommerce companies to ERP vendors to CAD, and from PLM and CRM vendors.

All competitors offer the promise of configurators. Some offer optional catalog, e-commerce and 3D CAD download module options, and most offer integration options to other systems. They use different technologies and methodologies, however, that dramatically affect the cost—both initial and long term—and the long-term flexibility of the solution. The three major areas of concern are the ‘Configurator Capabilities,’ the ‘Need for and Integration Capability’ and the ‘Business Model’ to control setup and recurring costs.

Configurator Capabilities

• Can the complexity of your configurable or made-to-order parts be addressed effectively? Obviously having the ability to handle the highest complexity of your products is a prerequisite to choosing a configurator, but how that complexity is captured and presented to the user is critical to success. Often, companies don’t know or realize the full complexity of the interdependencies within their configurable products, so consider doing an initial pilot project to produce a configurator for your most complex product.
• Will the configurator simplify complex product configurations or confuse them? The goal is simple, guided automation of the configuration sales and engineering tasks. Some configurators use multiple option menus and lead the user through a step-by-step approach, which is fine for a limited number of inter-dependent attributes, but can be confusing for products with multiple inter-dependent attributes (see Case Study sidebar). The best configuration solutions incorporate Visual Constraint Feedback™, though most traditional configurators do not. In a complex product, users usually don’t know the constraints and they almost certainly don’t know the inter-dependence of those constraints (i.e. if you select X you are giving up option Y in selection Z). The Visual Constraint Feedback makes users aware of what effects any selection has on future choices. An alternative approach is to provide real-time feedback with automatic prompts and warnings, but as complexity increases, that approach becomes overpowering because too many prompts and warnings confuse the user.
• Are ‘smart’ part numbers and reverse configuration available? Configurators are often designed to create ‘smart’ part numbers in which particular digits or letters in the overall part number string translate to particular selections within particular options of the complex assembly. This is fine when you want to generate a part number by using the configurator to select options. But what about the reverse situation? When an order is received it includes a smart part number derived by your customer or distributor, but how do you know if that part number represents a valid part you can actually make? The best configurators can be used in reverse, allowing you to enter the smart part number into the configurator where you can immediately check that it represents a valid part configuration, and also visually present the detail of all selected options, including the BOM detail for that assembly.
• Are CAD models of the final configured part available for download? After being guided through a detailed selection process by a configurator, many design engineers will want to incorporate the result into their design. The most productive way to achieve that is to be able to download a CAD model of the final configuration chosen. By providing freely downloadable 3D CAD models of your configurable products, you save the design engineer’s time and make it easier for customers to select your products rather than your competitor’s products. In return, your parts are ‘locked and loaded’ into their designs, so you will enjoy sales in proportion to the sales success of those designs. In addition, by helping speedup their time to market, you speedup orders for your products. A genuinely symbiotic business relationship is created and customer loyalty increases.1
• What if a product’s model changes? Building a lasting customer relationship involves the ability to quickly communicate model changes to customers. Maybe due to a supplier change or an engineering change order a product’s model may have changed. If your customer has this product in their design, but is unaware of the change there could be major problems for that customer during final assembly of their product. A unique and industry first solution from CDS is the ability for users to enable product change notifications for a specific product. By using the user’s registration e-mail, a company can quickly inform their customers of an engineering change that affects the model.
• Does the vendor have a proven methodology to capture the configurator design rules? The configurator must be reliable and dependable—a feat requiring clear logic from the product engineers and perfect software from the configurator builders. Most configurator vendors employ a methodology to obtain or formulate rules about requirements and best practices from your subject matter experts.

Need for and Integration Capability

• Need for integration—Configurator integration with other systems is not a prerequisite. It is perfectly possible to include a configurator as a free standing entity on your Web site, at least initially to inexpensively test user adoption before making a more significant investment. If you have a broad product range including some non-configurable products as well as some configurable products, then it is common to have a searchable digital catalog of all your products that includes configurators for some products. Typically the next steps are to have user registration (leads) and possibly online e-commerce to take orders over the Web. These capabilities can be treated as components of the catalog/configurator system or at a more sophisticated level integrated into CRM, ERP or PLM systems. It is quite common for companies to approach these stage by stage.
• Integration capability—Some vendors supply whole suites of products such as CRM and/or ERP or PLM and catalogs with configurators. Others sell only configurators or catalogs with modules for configuration, CAD downloads and ecommerce with the ability to be integrated with the major CRM, ERP and PLM systems. The important thing to ensure is that whatever system you choose has the ability to grow with you if and when your integration needs expand. For example, if you want your configurator profile data to be added to your CRM system and to configure component pricing or stock availability from your ERP system, then ensure that your configurator choice can be integrated with those systems.

Business Model

In applying a configurator, the industrial supplier’s goals are usually to achieve an increase in sales with the minimum initial and recurring costs. To help achieve these goals, their Web site needs to attract, and keep attracting, browsers and returning customers. At the same time, by providing CAD models of their products online, they can decrease their current technical support costs through more user self-help, and decrease product returns by enabling online customers to select the right product the first time. The business model they select will dictate initial and long-term costs. The most important items to consider are:

• Will the configurator increases sales? The configurator must guide customers through features and options to meet their individual requirements. By enabling mass customization and speeding up responses to quotation requests, companies can achieve improved sales, shorter leadtimes, greater customer loyalty and increased market share. As an online sales tool, the configurator can support multiple sales channels—enabling your sales people and distributors to communicate with customers and sell more effectively. Some configurators can, for example, run multiple user interfaces from a single configuration model to support the unique look and feel necessary for different sales channels.
• Will you use the configured CAD downloads to generate sales leads? 3D models have proven to be one of the best online marketing tools available to manufacturers and distributors. The best solutions include configurators that generate 3D CAD model downloads in exchange for capturing low-cost, high-quality leads from your Web site when user’s download the 3D model. Engineers and CAD designers will gladly register to download a 3D model since it will save them valuable design time. Companies that require registration prior to downloading a 3D model should be sensitive to protect user information. Many companies publish and abide by a strong privacy policy that protects user information and e-mail addresses. Allocation of these leads, for example, by distributor territory, can be automated or manual.
• Will the configurator decrease costs? The automation of online configuration can reduce costs in several ways. For customers, efficiency gained will come from reduced communication dialogue via the ‘expert system’ of the configurator—customers often prefer the immediate self help and download capability to telephone calls and multiple e-mails or voicemails. Your internal engineering team can concentrate on new design work instead of helping customers configure existing products or obtain CAD models. Sales time is saved by automating production of engineered quotes and proposals. This automation also reduces the opportunity for human error in quoting and in products built to order, thereby cutting down repeat or re-work to achieve more consistent product quality, improved engineering resource use and higher productivity.
• Will you be charged per model configured or per CAD download or …? To ensure control of costs and no bad surprises it is best to avoid ‘per configuration’ or ‘per model’ download charges unless they are capped (e.g. $1/download/ month and all downloads beyond the cap are free). As you become more successful at generating user traffic, a fixed price for unlimited downloads is usually the best choice and prevents your costs accelerating with perhaps no relationship to your vendors actual cost of running the necessary IT infrastructure and maintain-ing the configurator/s and CAD model generation.
• Does the solution support manufacturer-distributor relationships? Distributors can be wary of disintermediation when manufacturers create new direct relationships with customers. Therefore, ensure that your distributors are part of the plan and that the online catalog complete with 3D CAD models will further empower your distributor network. Maintaining separation of the CAD model download and the order processing functions can be key to distributor adoption. Distributors are typically closer to the customers than the manufacturers and many provide value added services beyond traditional stocking, order taking and credit provision. The CAD model download capability can be another service available via the distributors’ Web sites (even if those Web sites just point to the manufacturer’s Web site) and as part of their visits to customers, distributors can use the Web site as a new sales tool to help customers select parts and download CAD models.
• Does the solution have an ecommerce option? If you are likely to add online sales later then ensure that either your supplier’s solution includes an optional e-commerce module or that the solution can be integrated into the e-commerce module of your ERP system vendor.
• Return on Investment (ROI)? A simple ROI analysis can be based on expected increased sales less COGS, plus expected technical support manpower savings, plus expected engineering manpower saving, less the initial (depreciable) costs and the annual maintenance or hosting costs. Be aware that selecting a particular supplier’s software usually means you will be selecting the business approach and thereby locking in future costs. In estimating the software and hardware costs, look at both of the typical approaches.
• The traditional software license approach—where your staff is trained, implements and maintains your configurators, which are operated on your own computers and internet connection.
• The Software as a Service (SaaS) approach—where you select a third party company to build, maintain and host your configurators.

Some suppliers use the traditional model—a perpetual software license sold for operation on your own computer hardware plus an annual maintenance fee. Other suppliers provide the software in the newer SaaS model—the software setup in an online hosted computing environment plus an annual hosting fee. In both cases there are initial setup costs plus annual recurring costs and the following tabulation compares the two approaches. In either case, if you are offering an online solution, ensure the application has ‘large pipes’ to the internet to handle large models efficiently and high reliability data centers with power backup to ensure maximum uptime of you application. It can be a very expensive proposition to do this internally, but as long as you have the internal infrastructure to run a high reliability (99.5 percent uptime) Web site, then either can work. Externally hosted or SaaS implementations are usually preferable in smaller organizations. Even in large organizations, CIOs have changed their thinking to welcome SaaS to address specific solutions. At one time, CIOs perceived it as a threat to their power over IT, but now they often see it as a way of fulfilling business mandates without stretching their thin IT budgets, particularly as there is no end in sight to the short supply of skilled IT workers. The most important benefits of an SaaS approach are speed of implementation and a reduced total cost of ownership (TCO). You avoid buying, installing, supporting and upgrading expensive software applications, servers and network equipment on company computers, and you do not spend time and effort on troubleshooting, tech support, compatibility issues and the other headaches that accompany traditional “out-of-the-box” software usage. Figure 2, page 44 presents a realistic cost and time, to achieve 30 configurators in service, comparison of a typical traditional software license and a SaaS approach. The SaaS approach achieves the 30 configurator goal at about half the cost ($888K vs. $1688K) and in about half the time (three years vs. five years).

In the traditional software license approach the major costs are internal staff, training, consulting and systems. Even if the software license (assumed at $70K) were free, it would make little difference to the overall cost. The point is that the SaaS model leverages an outsourced infrastructure of hardware and staff specialized in creating configurators.

Conclusion

Several market trends have converged at the CAD/internet intersection to create a new sales and marketing opportunity for industrial suppliers (manufacturers and distributors).

Design engineers spend a significant proportion of their time (some estimate up to 25 percent) searching for parts and creating CAD representations of these parts for use in their designs. A modern configurator through its user interface can make it easier and quicker for customers to select your parts rather than a competitor’s. The information they rely on to identify parts needs to be accurate, up-to-date (online) and complete (including 3D and 2D CAD geometry), not least, because their choice of component supplier can be directly affected. For configurable and made-to-order parts, designers expect time-saving efficiency gains through use of configurators and use of downloadable CAD models in their designs. Providing a 3D CAD model download of that selection often ‘locks’ products into a new design so suppliers later benefit from the sales success of that design.

Industrial suppliers who meet these expectations by making an ongoing investment in their Web sites via configurators with CAD model downloads (and possibly ecommerce) can expect increased sales and lasting customer loyalty, by providing a compelling reason for design engineers and buyers to return repeatedly to their Web sites. The 3D CAD downloads will supply critical engineering information, reduce engineering design costs, accelerate time-to-market and ensures design accuracy. Internally, industrial suppliers can also expect relief for high value tech resources as the customer ‘self-help’ frees up resources from helping customers configure products and from CAD model retrieval and communication.

Industrial suppliers without configurators and 3D CAD models on their Web site are at risk of losing customers to competitors who do offer these capabilities. Conversely, adding configurators and CAD downloads is a proven way to increase sales—an important sales and marketing tool for all industrial suppliers and an ROI justification for online configurators, digital catalogs and e-commerce.

Many technologies and business models are available for online configurators, digital catalogs, CAD downloads and e-commerce. The choices made will dictate initial and long-term recurring costs, increases in sales achieved and longevity of the competitive advantage obtained, ease of use, likely adoption by users and longevity of the competitive advantage obtained and ROI.

John Major is CEO of Catalog Data Solutions (San Jose, CA). As a founder of InPart, VP of PTC (after PTC bought InPart and incorporated it into Windchill) and CEO of Catalog Data Solutions, he has led the development of three generations of manufacturing catalog and CAD download software. Visit the Web site at www.catalogdatasolutions.com.