MEM 416 Project: Reconfiguring Business Process with Product Configuration Software

Current MEM student Mike Vesperman builds product configuration software for everyone from large manufacturers like Black & Decker to small companies with just six employees. During the MEM 416 course he used a class project to reconfigure his own approach to building products and helped his client and his company in the process. Learn how below.

linkdin

By Mike Vesperman

As a project manager at Configure One, I provide professional services to companies implementing our web-based enterprise product configurator software. Every company, from large manufactures like Otis Elevator and Stanley Black & Decker to small companies like Tommy Car Wash (with six employees), is looking for the same thing—a competitive advantage. My job is to make sure they reach that goal; however, understanding what a client perceives as a competitive advantage often requires careful analysis. And it wasn’t until the MEM 416 course that I understood that my own approach to product configuration implementations was limiting myself, my company, and my clients as well. But that quickly changed over the course of my final project.

Background

Implementing an enterprise product configurator can provide many benefits to businesses that design and build configurable, multi-option, and customizable products. A few examples include elevator systems, custom industrial cabinetry, custom tool boxes, agricultural equipment (grain bins, grain elevators), and bathroom stall partitions. The benefits range from reducing the request for quote time, to rapid generation of sales and production drawings, to generation of the variant bills of materials, etc.

blog_image1-configurator

Any one of these benefits can provide an ROI for a business investing in a configurator solution. However, I have found the real game changer, i.e. competitive advantage, is achieved when the enterprise configurator solution has impact on the business’ entire value chain from quoting to production and everything in between. The capabilities of product configurator software do not include functionality to support all aspects of how a business operates but the inputs and outputs of the configurator software can be a conduit for connecting often disparate/disconnected systems.

In reality, the customers I work with are looking to achieve more than plugging a product configurator point solution into their sale process or order entry department. They are really looking to redesign a business process that is causing them to lose their competitive advantage. Sometimes the problem process is obvious—their RFQ process is too slow or their order entry is vulnerable to mistakes because the product rules are too complicated. However, more often than not they don’t treat the product configurator implementation as a business process re-engineering effort. In fact, truth be told, neither did I. Until MEM 416 that is.

The Course

While studying the methods of business process re-engineering in MEM 416 I started to realize that my product configurator projects are in essence a business process redesign project, one that is utilizing a sophisticated configurator technology to automate process activities. In MEM 416, we studied business process change, which includes everything from process architecture, process redesign methodologies, process analysis with simulation, process automation, and change management. This subject was very relevant to the current work I’m involved in and the course provided me a unique opportunity to apply the specific classroom learning towards my customer projects almost immediately.

The Project

MEM 416 is heavily hands on course and, as a final project, a classmate, Anne Hays, and I chose to use one of my existing customers for a business process redesign project. The project was already in progress by an internal IT implementation team, and primarily consisted of focused development of a product configurator to support a product selector based on customer entered requirements. Working on the case for class provided mutual benefits for both my customer—free consulting!—and for our MEM team–an opportunity to gain hands-on experience using our academic study!

Right from the get-go we treated the project like a process redesign rather than just another software implementation project. We first organized a meeting with the business leader, the Director of Retail Sales, to determine the business strategy driving the request for the process change. The goal of the meeting was to understand and align the business strategy with the process redesign project. From this call we were able to get much of the general information we needed to move forward. For example, we ascertained that the primary objective of the project was to increase the retail sales volume while reducing the cost of sales for the manual based ordering process. The strategy to do this was three‐fold:

  1. better engage the small to medium consumers
  2. automate the order processing with technology rather than people
  3. increase customer satisfaction

Next, through a series of interviews with the process enablers we developed a process diagram of the existing “AS-IS” process and gathered process metrics, such as activity time data and frequency. Several very important discoveries were made during this phase of the project, specifically around routing of orders to the appropriate manufacturing facility based on rules (consumer zip code proximity and facility production capability). The discoveries made here would have been missed opportunities with the original project. For instance, the current development plan did not include a logical based middleware to route the customer order to the appropriate production facility within the ERP.

Once there was a fully documented AS-IS process, we used a process simulation software, called AccuProcess, to determine bottlenecks within the end-to-end process and, more importantly, calculated a total cost of processing one month’s worth of orders, in this case 8200 orders. The results were extremely impactful: through this analysis we found a bottleneck in the manually entered order activity and established it costs almost $70,000 in personnel to process 8200 orders.

blog_image2-bottleneck
(Click image to view in full size in a separate window.)

My customer was surprised to learn the monthly processing cost and recognized this data was useful to further justify the investment of their IT staff as well as the cost of my company’s software and professional service work.

Conclusions

The result of this investigation and analysis resulted in a report with a documented COULD-BE process design which included product configurator technology to achieve an accurate product selector, BOM and price generation, workflow automation, and order processing all performed on the web directly by the consumer with no internal resource intervention. We included in the report a series of next steps for the project as well recommendations for success; things like developing a migration strategy and organizational structure changes.

blog_image3-couldbe

The knowledge and experience I have gained through the MEM 416 and this final project has had an immediate impact on how I approach projects. Configure One is a small but rapidly growing software company and we are in the process of analyzing our existing professional service model. The knowledge I have gained through this course has already permeated the discussion of how our company approaches projects and delivers professional services. As our product configurator projects get more complicated, the need for a more mature approach increases, one that utilizes analysis, modeling, project management and change management to achieve results with a shorter time frame and a higher return on investment for our clients—and the MEM program taught me how to make it happen.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s