Managing for variety in the order acquisition and fulfilment process: The contribution of product configuration systems

Abstract

Flexible production is not enough to offer the customer variety without compromising company profitability. In conditions of product proliferation, in fact, the order acquisition and fulfilment process can turn out to be a serious bottleneck, as the multiplication of the product features induces an exponential growth in the volume of information exchanged between the firm sales organisation and its customer base. Furthermore, this information has to be fed back in appropriate formats to manufacturing, with the risk of errors and delays due to the variability and complexity of product information. This study, through the discussion of a case example, reports the first results from a research on a class of information systems that support the order acquisition and fulfilment process in high product variety environments, called product configuration systems. The research indicates that the implementation of a product configuration system significantly contributed to increase the effectiveness and efficiency with which the studied company translates the customer's needs into product documentation. Moreover, the benefits pertaining to product configuration system stretch beyond operational performance, as it offers the company a way to incorporate into organisational memory product knowledge otherwise retained by individual employees. However, the introduction of a product configuration system may require significant and potentially painful changes in the way the order acquisition and fulfilment activities are organised, and necessitate a high initial investment in terms of man-hours.