In principal, everybody knows how it works: On the one side the customer knows exactly what he wants, and on the other side the supplier knows how to fulfill these needs. In theory, this is correct. But looking into our global world, it more often works like in the following picture:
Looking at the plant- and mechanical engineering industry, maybe you might smile about it, and feel it could be a little bit extreme. But if you look within your business field, you might be reminded of one or the other case. After the meeting with the customer the salesman knows exactly what the customer wants. Even the product manager or the member of the R&D team understands what the customer wants. Please, look again at the first three pictures above. How come that the installation differs from the customers’ needs?
What the customer is able to know
In many cases there is not one solution for the customers’ needs. But the customer decides what he is going to specify and what he believes will suit his situation best. Is he the right one to do so? “Yes, in principle, but …” As he is very often not the expert for this specific issue, how is he able to do this? Especially in the B-to-B business there are so many innovations and continuous improvements on all different levels starting with material science, combination of materials, production processes and so on. And this happens in the entire cascade of the supply chain on each supplier level. That leads to the situation that no one could be an expert in the entire supply chain.
So the customer is not able to describe what he wants. He has a clear perception what he wants to achieve or what he want to eliminate. And his perception is that he is describing this during the procurement process to his supplier. First of all, there is the sales team which represents a specific product/solution portfolio of the supplier. His intention is to differentiate himself from the competitor based on the portfolio he has and the optimum mix he might generate. If now the design engineers and R&D engineers get involved, short term vs. midterm oriented mentalities clashes together. As a result future technology or new solutions are conflicted with the short-term needs of the markets. How to avoid?
Modularization starts not in the R&D and production but in the mindset of the sales people. The main target of the sales is to listen and understand the customers’ process in order to engineer and develop the right solution based on modules. Both, continuously changed processes on customers’ side and national legislation and business application specific requirements (either driven by history or by technology) create further complexity. So standardization is no solution any longer.
To maintain high degrees of freedom in the plant- and mechanical engineering industry, to manage complexity and to fulfill customers’ requirements straight to the point, only modularization – thinking in modules – is an answer. For this purpose it is essential to slice the customers’ process down in modules, which might not be the same as the product-line arrangement of the customer. For these functional process modules, equivalent product modules have to be developed. That enables the sales to fulfill the required flexibility on the market.
This principle introduced by the mass production and automotive industry enables to combine flexibility and customization with the economies of scale.