Power of differentiation e logic

Differentiate.Simplify.Perform

1Copyright 2011, eLogic Group LLC, all rights reserved

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The Power of ChoiceLeveraging Configuration Technology to Differentiate, Simplify, Perform

and Win

Michael ShieldsCEO, eLogic Group



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Learning Points

1. Understand the growing trends toward product differentiation; and the value of choice.

2. Grasp the key Demand Drivers and the “Next Practices” that support high performance differentiation

3. Learn how to leverage configuration technology for Innovation and Process Entrepreneurship – to WIN vs. competition.


3Copyright 2011, eLogic Group LLC, all rights reservedeLogicGroup.com

“Let’s Paint Everything Blue”

Industrial Manufacturer, VP OperationsCirca 1992

(A War Story)

Learning Point 1 – Trends in Differentiation



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Trends in Differentiation

Business Markets – The RIGHT Solution for YOU Every Time

“meet MY needs AND make it easy to do business with you”



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WHY “Thin-Slicing” & “Long-Tail” Marketing?

“Listen to ME and respond… …so it’s easy (and even fun) to buy from you”

“We will celebrate your order tonight with liquid refreshments”

Trends in Differentiation

http://www.freitag.ch/shop/FREITAG/models/F76/detail.jsf

http://www.freitag.ch/shop/index.jsf

http://www.freitag.ch/shop/FREITAG/shop.jsf



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“Everything should be made as simple as

possible…

Albert Einstein

…but not more so”

Learning Point 2 – Demand Drivers/NEXT Practices



Mixed Mode Demand – The Model For Differentiation

• Four Distinct Types of Demand – dependent upon product differentiation AND commerce complexity • For EACH, Recognize Key: - Business Practices - Technology Enablers - Knowledge/Info Assets

• Identify the best fit for your products/markets and position for the NEXT PRACTICES to dominate the competition.

C

P

roce

ss C

ompl

exity

Highly Collaborative

Product Diferentiation

LOW

Highly Specialized



Mixed Mode Demand – Type 1Make to Standard (MTS)“Sell what you make”

• Fully Pre-Designed • Fixed Product/Service Content• Established Commerce Reqt’s• Pricing, Lead-time, T’s & C’s, etc.

NEXT PRACTICES GUIDELINES:• Guided Selling• Role-Centered/Context Aware Content Delivery• “Lights-Out” Process Flow• Integrated Systems/Data (QTC)

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Mixed Mode Demand – Type 2

Assemble to Order (ATO)“Offer Pre-Designed Variability”

• All Components Pre-Designed• 100% Configuration Rules Defined• Flexible Commerce per Demand• Pricing, Lead-time, T’s & C’s

NEXT PRACTICES GUIDELINES:• Guided Selling • Sales Configuration – 100%• Order Configuration – 100%• Dynamic Documentation• Role-Centered/Context Aware Content Delivery• Lights-Out Process Flow• Integrated Systems/Data (QTC)





Design to Order (DTO)“Adapt What you Make to Meet Special Demand(s)”

• Base Design PLUS• Special Features per demand:

• Configurable/Automated (and/or)• Engineered

• Flexible Commerce Requirements• Dynamic Work-Flow & Doc. Needs

NEXT PRACTICES GUIDELINES:• Guided Selling• Role-Centered/Context Aware• Sales Configuration: Mid - 100 %• Order Configuration: Mid - 100 %• Dynamic Customer Dwg’s/Docs• Dynamic Work-Flow/Resources• Integrated Systems/Data (QTC)





Engineer to Order (ETO)“Make What You Sell”

• Customer-Driven Solution Design• Engineering Value Add (QTC)• Collaborative Commerce Process• Pricing, Lead-time, T’s & C’s

• Long/Complex Commercial Cycle• High Quote/Order Change Rate

NEXT PRACTICES GUIDELINES:• Guided Selling• Role-Centered/Context Aware• Sales Configuration: Lo/Hi%• Order Configuration: Lo/Hi %• Complex Proposal/Version Ctl.• Project & Contract Management• Dynamic Customer Dwg’s/Docs• Dynamic Work-Flow/Resources• Integrated Systems/Data (QTC)




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“Just because it’s difficult for you doesn’t

make it valuable to me…

V.P. Procurement;Foster Wheeler

Learning Point 3 – Leveraging Technology to Win



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Best & NEXT Practices

Considering NEXT Practices for your Order Mix:

– Standard Products – Configured Products – Engineered Products

Where and How to Apply Configuration Technology for highest leverage – and where NOT to go.



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Best & NEXT Practices – Configuration Technology Four KEY Types – each with capabilities/limitations 1. Guided Selling – Constraint-based knowledge

deployment… ‘smart selling engines’. Feedback driven and dynamic presentation of best choices.

2. Sales Configuration – Fully captures & defines all technical and commercial constraints to ensure a clean quote & order for complete execution.

3. Order Configuration – Translates customer demand (quote-level) into clean, clear fulfillment plan (order, BOM, routing, special handling, etc.)

4. Engineering Configuration – Automation of variable design elements and docs (smart/parametric models).



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Best & NEXT Practices – Where to Apply: 1. Guided Selling 2. Sales Configuration 3. Order Configuration 4. Engineering Config.

Inquiry to Quote Process – Create DemandChannel

Management

• Portal• Leads• Opportunities

Guided Selling

• Search• Size• Select

Quotation

• Configure• Price• Quote• Review

Proposal

• Generate• Maintain

Quote Management

• Closeout• Reports• Analytics

Order Capture

• Conversion• Review• Reconciliation

Order Entry

• Commercial• Technical• Order Design• Cost

Supporting Materials

• Documents• Drawings• Schedule

Customer Service

• Manage Order

• Changes• Status

Order Lifecycle

• Closeout• Reports• Service• Warranty

Order to Shipment Process – Satisfy Demand

Find the “RIGHT” Product

Fit

1.

Order it “RIGHT”

QTC

3.

Quote the Product“RIGHT”

2.

Design it“RIGHT”

4.



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Return on Investment Is it worth it? Where are the benefits?

Selling Effectiveness – Higher Revenues (win more often)

Price Management – Higher Margins from Same Mix

Productivity – Lower Overhead/Admin Costs

Cycle Time Improvement – Higher Yield from Same Ops

Quality – Lower Error Rates/Higher Gross Margin



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“We used to shovel manure into hay

wagons…… But now we shovel it into limousines”

(Unattributed Source)After a major ERP implementation that did not enable needed

capabilities

Best & NEXT Practices – What NOT to Do…



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Key Learnings - Recap

Trends in Differentiation – Thin-Slicing & ‘Long-Tail’ Marketing

Types of Demand and their impact on technology application

Configuration Technology as a Game-Changer

Understand the Journey to NEXT Practices (vs. Best Practices)



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DIFFERENTIATEor

DIE

Key Learnings - Recap

& WIN!!

Power of differentiation e logic

Technology

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