Business Strategies Supporting Product Variability
The next table provides an overview of the most basic principles that characterize the typical business approaches to delivering products with optional and customizable components and features.
Business Approach
Definition
Assemble-to-order
A strategy to design products with a finite list of discrete option choices for key product features. Once the product design has been completed, the processes of customer ordering and manufacturing of the product are executed without the involvement from the product development team.
This strategy is commonly used in many industries such as passenger vehicles, large and heavy equipment, computers, as well as other products manufactured in large volumes. This strategy is also known as Build-to-order.
Configure-to-order
A strategy to design flexible products, which can be configured or customized to fit unique needs of each customer order.
Typically, a Configure-to-order product order is created with a configurator that applies rules and variable customer requirements to create a unique version of the product. The product development team defines the general product and often maintains the configurator logic for creating orders. The product development team typically has no involvement in processing or approval of each specific customer order. This technique is common in industries such as industrial products as well as automotive and aerospace suppliers.
Engineer-to-order
A strategy similar to Configure-to-order, which involves fitting a general product to unique customer requirements. The Engineer-to-order process requires some involvement from the product development team before the product design is complete.
Typically, an Engineer-to-order process involves the product development team to define and validate each product configuration before manufacturing. As with the Configure-to-order process, the Engineer-to-order strategy is also common in industries such as industrial products as well as automotive and aerospace suppliers.
Assemble-to-stock
A strategy to design a general product with several or many discrete variations with small changes in features to address individual market or sales channel needs. This strategy is commonly used in the consumer products industries where a product may be mass-produced in several colors, sizes, or with varying levels of key features in the product.
Contract Product Development
A strategy to custom design and custom manufacture a product to fulfill the unique requirements of a specific customer. This strategy is commonly used in some parts of the aerospace industry, extensively in the defense industry, as well as others where most all product requirements are defined by the customer, and all phases of development are funded by the contracting organization. Strict traceability of design deliverables with the as-built product is often a fundamental component of these contracts.
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