Product Configuration and Supply Chains Integration

Becoming more demand-driven in turbulent times requires that supply chains be fully integrated with product configuration strategies to make sure the highest levels of customer accuracy and responsiveness are attained.  Companies attaining best practices in product configuration strategies concentrate on key supply chain metrics as a barometer of their strategy performance.

Making Product Configuration Strategies More Effective

Using the Perfect Order, supply chain management costs and demand forecasts to measure demand visibility gives these companies insights into which areas of their supply chain strategies to trade off for optimum performance.  The critically important cash-to-cash cycle to keep companies’ liquidity positive concentrates on Days Payable Outstanding (DPO), Days Sales Outstanding (DSO), and Inventory costs.

Source: The Hierarchy of Supply Chain Metrics: Diagnosing Your Supply Chain Health | Refreshed: 6 July 2011 | First Published: 23 May 2008 | 10 pages. Click image to enlarge.

Operational effectiveness as defined by the 11 additional metrics shown in the hierarchy of supply chain metrics are also used for continually fine-tuning supply chains to be more demand-driven and therefore more responsive to product configuration requirements. In companies who have successfully created collaborative supply chain networks, product configuration strategies benefit from the more efficient sharing of pricing and product information.

A key take-away from analyzing how companies are using demand-driven strategies to ride out turbulent times is the fact that the tighter the integration of supply chains to manufacturing and distribution channels, the greater the profitability of product configuration strategies.  A well-orchestrated supply chain translates role-based information and intelligence into action very fast and gains new business, cost reductions and greater productivity in product configuration as a result.

Bottom line: The more integrated a supply chain, the more accomplishable product configuration objectives become.  Best practices in this area show that role-based intelligence in product configuration strategies is an even stronger competitive advantage than price or availability.  This is because companies can move on demand signals faster than competitors and capitalize on new growth while mitigating risk.

To learn more ways product configuration can impact your complex sales process, check out this complimentary webinar featuring Gartner analyst Mike Burkett on Transforming Selling Strategies.

Courtesy – Louis Columbus

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