One-to-One: Quoting and Selling Customized Products: TDCI

I had the chance to talk with … Dan
Demuth of TDCI the other
day about their
solutions for helping companies quote, sell, configure, and
produce customized products. Selling products that are
designed or produced to order has a unique set of challenges -
starting right at the beginning of the process where companies need
to generate a sales quote based on their customer’s
specifications.

What do they Do? 
Before we talk about what TDCI does, let’s talk about the
challenges their customers face. Selling and producing a standard
product can be a challenge for many companies. Even with a set bill
of material (BOM), manufacturing process, and cost many
manufacturers have difficulty producing on time and with
quality to meet customer expectations. That problem is
compounded when an element of customization or
configurability enters the equation. Why is it so
hard?

• Validating the Configuration - How can a
  company be sure that what they sell can even be built? Most
  companies have a complex set of rules that reflect their
  manufacturing constraints and product characteristics.
  Taking an order for a 20′ x 14′ window only to find that you can’t
  produce it is poorly received by customers. While some rules may be
  simple, others are based on mathematical computations (for example
  to ensure stability under load).
• Validating the Order - How can we be sure that
  the order reflects that product the customer wants? A standard
  product has standard specs, but ordering custom products is
  prone to error because it involves communication between
  buyer and producer. And if the configuration is wrong, the product
  can’t just be put back on the shelf, often times it is scrap.
  Developing a quick 2D graphic and an order
  confirmation is a big help to make sure the customer is getting
  what they ask for (or asking for what they need). Also,
  pulling together the documentat ion for an order
  is a time-consuming and tedious process, and one that is prone to
  errors.
• Pricing - Pricing rules for standard products
  can be complex. Let’s face it, Marketing and Sales can be very
  creative in their pricing schemes. But for products that have a
  wide range of options, it can be very problematic. Many
  companies can’t accurately predict the cost of the customized
  product, so they don’t know if they are selling good business or
  bad business. That leads to one of two things - guessing
  at your margin or padding it. If you guess, you can lose money on a
  deal. If you pad the price to stay safe, you can lose the deal
  itself.
• Quoting Leadtimes - In addition to quoting a
  price, custom products can have widely variable lead
  times. Without knowing the parts or production process -
  let alone inventory or capacity - companies typically quote a
  standard guess at leadtime. Like pricing, you stand the chance of
  missing a large percentage of orders or missing the orders because
  you quote excessively padded lead times unless you can develop the
  leadtime based on specific order parameters.
• Producing - How much material will I use?
  Which parts? How will I produce it? How can I tell the shop floor
  what I want? Understanding these question is key. Releasing
  standard products to manufacturing is hard enough, but
  releasing at an order-by-order level is almost a guarantee
  that something will go wrong. Customized drawings based on
  the order parameters can go a long way to reducing errors and
  miscommunication. 

So let’s get to the point of what TDCI does. In short,
TDCI helps with all of this by automating the processes
needed to quote and produce customized products.

What do they Offer?
TDCI offers a solution known as BuyDesign. In their terms the
solution is “software is a guided selling, quoting, and
configuration solution that’s helping companies become ‘easier to
do business with’ by streamlining their interest-to-order cycle for
customized products.” They also have some nice
capabilities to tie into back-end 3D CAD systems (Pro/Engineer for
example) to customize the 3D model and develop drawings. 

TDCI has also developed a mass configuration
capability to auto-generate standard combinations of features and
options in advance. Many companies want to develop
catalogs of standard offerings. Traditionally they had to choose an
approach to engineering and documenting there products - engineer
standard products “by hand” or configure everything to order.
This is a nice “in between.” For example, they are working with a
cabinet company that uses the TDCI Batch Manager to
generate cabinet designs from a “handful” of Pro/E CAD
files, based on combinations of: 

• Sizes
• Wood species
• Door styles
• Finishes
• Etc. 

Who do they Work With?
The industries that need this most tend to be architectural
products (such as windows and doors) or industrial products (such
as pumps and valves). Transportation is another area that is
increasingly moving toward ordered configurations, most frequently
you will find this in boats or specialty vehicles like fire trucks
- but “to order” cars are gaining in popularity too. TDCI has a
very large installed base in the architectural products
space, but has worked with companies across multiple
industries.

TDCI also works with companies that sell through a network
of brokers or distributors, where the ordering is a step
removed from the manufacturer. An example is windows sold through a
home improvement store.

How does this Fit into the Ecosystem?
TDCI has a breadth of experience with ERP solutions in addition to
configuration. As such, they have integrated BuyDesign into a
number of manufacturing solutions, including Infor’s Syteline and
Microsoft Dynamics (currently Great Plains). It is important to
integrate the results of configuration to the ERP for production,
and highly desirable to link to the sales process in ERP or
CRM.

So that’s what I hear from TDCI, I hope you found it useful. What
do you think? What else should I have asked them?