Quote-to-order (Q2O) configurator technology has been helping manufacturers improve their productivity by shortening lead times, eliminating the possibility of order errors, and reducing the need for training costs and expertise of the various design and service personnel (please see Q2O Systems: Solutions for Quotation Management and Pricing Configuration).
For more background, please see The Basics of Quote-to-order Systems, The Complexities of Quote-to-order and Possible Solutions, and The Essential Components of Quote-to-order Applications.
Knowledge Management Comes to the Aid of Engineer-to-order Manufacturers
The latest generation of Q2O systems goes a step further by using knowledge-based software to reduce the dependence on highly skilled experts. Non-programmers can now capture necessary knowledge with intuitive visual tools (for example, drag-and-drop, rather than by pesky programming languages such as Lisp or Prolog).
Since the ability to harness a company's intellectual property and know-how is key to building competitive advantage, product knowledge management systems have become foundation tools that allow engineer-to-order (ETO) enterprises to capture and maintain critical sales and product knowledge in an enterprise knowledge base and expert system. The most advanced ETO companies leverage their intellectual capital to automate the Q2O processes of attracting customers, selling products and services, fulfilling orders, and servicing customers. Such systems have to be both internally and externally focused (to span the demand chain of any given company), and have to work with complex business rules related to processes, products, pricing, and services (there is virtually no limit to what kind of knowledge can be captured).
The emphasis here is on knowledge management rather than rule management, and this “assisted configuration” approach also helps the manufacturer. The software can output a generative manufacturing specification that is user-defined and that can include a bill of material (BOM), project, quote, order, drawing, and so on. The integration choice (seamless via the Web or desktop) can be at the data, function, or Web service level. For example, pricing information integration could involve all those levels.
A good example of a knowledge management provider is Selectica Inc. Aside from its customary Selectica Configurator, Selectica Pricer, Selectica Quoter, and other “usual suspect” Q2O products, Selectica offers Selectica Studio and Selectica Repository, which leverage declarative constraint engines. As mentioned previously in Q2O Systems: Solutions for Quotation Management and Pricing Configuration, many existing configurators are custom programs that were written specifically for the product or family of products being configured. This means both the configuration logic and the data describing product attributes are combined in a single computer program that requires significant reprogramming to reflect simple product changes.
In contrast, Selectica applications use a constraint-based engine that is separate from the data describing the product attributes. This allows businesses to easily create and modify the Selectica KnowledgeBase to reflect product changes by using the integrated modeling environment, thereby eliminating the need for expensive programming teams.
To that end, Selectica Studio models, tests, and debugs applications using a single tool, which simplifies development processes, whereas graphical knowledge base and user interface (UI) development tools enable application deployment and maintenance by nontechnical personnel. Selectica has developed an integrated modeling environment that allows its customers to easily create a sophisticated knowledge management system without any programming. The programs use drag-and-drop tools that enable sales and marketing personnel (rather than expensive programmers) to maintain and enhance their customized solution.
Using these drag-and-drop tools, businesses can easily create and update knowledge bases containing product attributes; create hypertext markup language (HTML)–based graphical user interface (GUI) applications; test the application interactively as the application is being built; and conduct batch order checks. Businesses can also verify the semantics of the knowledge base and create flexible models from individual models. Users can create and maintain automated knowledge bases through a knowledge base development environment (KDE), although administrators can maintain the consistency of knowledge bases using a fully automated environment and a command line interface (that eliminates the need for a UI).
Selectica Repository is a database that stores the knowledge base in a readable format, which can easily be queried. The solution provides knowledge bases developed by teams from various locations, allowing for easy maintenance. Selectica's engine, written in Java, is easily deployed on various operating platforms, and the use of Java 2 Enterprise Edition (J2EE) allows the vendor to support a range of deployment environments. Such environments range from Java applications in a notebook computer to server-generated, browser-readable pages, with the same engine and the same knowledge base.
Along similar lines, the Cincom Q2O Suite 8.0 consists of Cincom Socrates 8.0, a proprietary knowledge base application studio, and the Cincom SalesConfigurator 8.0 module for sales configuration and proposal management. Like Selectica, Socrates (formerly Cincom Knowledge Builder), which is aimed at knowledge developers (not necessarily IT staff, but rather departmental power users, such as engineering experts), is an enterprise environment for developing and deploying expert sales and configuration systems.
Acting as the “brain” and underlying knowledge base application studio, Socrates offers product configuration functional underpinnings to enable customer needs analysis, pricing, document generation, diagnostics, and intelligent searching. The enterprise knowledge base includes the enterprise project environment with Object Manager, Constraint Map and Decision Map, Forms Editor, Database Attach, List Editor, Tree Editor, Case Editor, Hierarchy Editor, and Procedure Editor as building blocks.
Unlike within most product configurators, Cincom's graphical knowledge modeling environment makes it easy for nontechnical users to quickly develop solutions that assist in the analysis of customer needs, product selection, product configuration, pricing, quotes, and customer support. Modeling tools enable domain experts to capture and maintain rules in the knowledge base in a hybrid rules engine that handles constraints, decision trees, pattern matching, configurations, and procedures. Decision engines serve to provide interactive recommendations and advice on the most suitable products, services, and courses of action. They also help users decide on the next task or action in a workflow-based system, based on current events and available data. In addition, they help to configure products, services, and workflows. There is a rapid application development (RAD) environment for the Web, Microsoft Windows, and embedded applications, where a universal client interface can be Windows, rich Web client, and thin Web client. Although written in proprietary technologies, RAD features an open architecture for seamless integration using extensible markup language (XML), open database connectivity (ODBC), or common object model (COM).
Cincom SalesConfigurator is a knowledge-based configuration and proposal management system aimed at users (whether they are customers, direct sales representatives, agents, etc.). It handles the tasks of sales management (for example, opportunities, quotes, customers, contacts), including discounting and proposal generation (from a Microsoft Word document library of static or dynamic templates). SalesConfigurator also contains product data capabilities, such as searching for parts (even if they are not in the catalog) and templates for features, components, and special options, and there are remote and detached capabilities for mobile users too.
APICS Dictionary defines a knowledge-based system as a computer program that employs knowledge of the structure of relations and reasoning rules to solve problems by generating new knowledge from the relationships about the subject. Knowledge management is an information repository used by executives, managers, and employees to more effectively produce products, interface with customers, and navigate through competitive markets.
Thus, at the center of Cincom's and Selectica's product knowledge management suites is a single version of the truth—sometimes referred to as a “single system of record” (referring to the integrity of data). This is a critical component that should provide a competitive advantage for many manufacturers for a number of reasons, including the ability to launch new products with intensity and focus; accelerate the new product introduction process; redefine product, pricing, promotional, and distribution strategies; and simplify engineering change order and document control functions. It brings enterprises much closer to the dream of capturing years of collective product knowledge that can be used for field training and to support the sales process, and that can leverage relevant insights to every custom order. That role is now being extended even further, as configurators become linked with enterprise resource planning (ERP), product lifecycle management (PLM), and other related enterprise systems.
Other important (although often overlooked) benefits that complex manufacturers should be able to achieve by integrating knowledge-based configurators with their enterprise applications include
* Improved master data management (MDM)—in which the format and information of the product can be synchronized and unified across all disparate systems from the upstream supply chain, to the engineering and production floor, to the front-end sales configuration and field service. This provides faster time-to-market capabilities given the need for less sales force and partner training. Knowledge management might be the most important asset of the value chain, and the way it is captured and packaged must be clear to everyone.
* Improved market intelligence—by integrating the configurator with marketing analysis data mining tools. In this way, an organization can better understand what drives customer decision making, as well as what the customer's preferences are from an option standpoint. Organizations also have the ability to discover market patterns, customer profiling and product association, and pricing and product discount differentiation based on geography, customer, and volume—all creating opportunities for up-selling and cross-selling. Support for the acquisition and retention of profitable customers through a personalized approach to campaign management and through the blending of inbound and outbound interactions are capabilities that enable organizations to support targeted marketing campaigns and pursue up-sell opportunities.
To that end, WebSource CPQ, in addition to not requiring any software installation on neither the user side nor the administrator side, is able to keep all the product models (rules, attributes, and so on) in a relational database. This is in sharp contrast to most other peer products that have to resort to compiling product models into binary objects, which does not facilitate easy access to data. For example, it is not easy to list all the rules where a certain attribute is in the constraining condition, or to list all the rules that perform an operation on a certain attribute. To further illustrate, if, for whatever reason, a user is prohibited from selecting the color blue, the configurator administrator should be able to easily obtain all the rules that permit the color blue, and to then investigate why blue has been prohibited. For more information, please see Can We Intelligently Use Part Numbers to Configure and Order the Right Products?
A report from AMR Research, titled Configuration Is the Heart of Customer Fulfillment for Complex Product Manufacturers (published March 31, 2003), discusses the significant financial impact of Q2O implementations. The report mentions such findings as a 95 percent reduction in order completion costs; a 13 percent reduction in order rework (from 15 to 2 percent or less); up to a 50 percent reduction in engineering support; a 20 percent reduction in incomplete orders; a 10 percent reduction on warranty costs; a 65 percent reduction in order cycle times; and a 50 percent drop in lead time (from over 60 days to 29 days). With such beneficial results, the logical question becomes, why aren't Q2O systems implemented almost everywhere?
There are many reasons why Q2O systems aren't implemented almost everywhere, beginning with the fragmented nature of the market. This causes market confusion, especially given that organizations need more awareness and education about what Q2O can and cannot do for its users. There are many (maybe too many) best-of-breed product configurators and silo-based tools that may or may not be suitable for a certain user environment. These best-of-breed products were typically created and managed by product experts, and are thus inflexible, not integrated with other enterprise systems, and not readily supported by IT departments. Yet, to meet customer requirements and reap a return on investment (ROI), front-office applications must be integrated with back-end enterprise processes. This integration, plus the availability of Web-based customer relationship management (CRM) suites, has allowed many “to-order” manufacturers to obtain immediate responses on quotes, proposals, configurations, pricing, and in some cases, even on delivery dates.
The market has long realized that CRM systems not only require integration with ERP systems to reconcile such data as customer master data, but also the bigger issue of integrated inter- and intra-enterprise business processes like prospect to cash. For make-to-order (MTO) and ETO products, the overall process starts with capturing customer requirements at the front-end that can be dynamically converted into work orders, routings, and other procedures via product configuration engines. Furthermore, intelligent configurators are increasingly required to provide a direct link with shop floor execution to, for example, add or change an operation, change the work center where the operation is performed, change the run rate on that operation, and change the setup time. They also need to produce special instructions or comments on the work order, sales order, or invoice.
Also, in the case of integrated and packaged software, there would have been many misfit deployments of simple commercial configurators or guided selling systems into highly complex environments (and vice versa—overwhelming knowledge-based configurator systems in light assembly firms), which have resulted in user disenchantment. Further, what has been causing additional confusion for users are the pure-play, guided-selling vendors that are anxious to get into the low end of the configuration arena. Specifically, they are underselling their offerings at a fraction of what a comparable configuration system would cost, but they are also delivering less in terms of comparable functionality. The inherent capabilities of the configurator tool will be determined partly based on whether it is an ERP module, a CRM module, a part of a total Q2O suite, or solely a stand-alone configurator. As a basic requirement, the configurator must be capable of handling the technical rules for specification and configuration of mass-customized products and services, while some configurator tools will also directly handle pricing, discounting, and sales quotes.
For more background, please see The Basics of Quote-to-order Systems, The Complexities of Quote-to-order and Possible Solutions, and The Essential Components of Quote-to-order Applications.
Knowledge Management Comes to the Aid of Engineer-to-order Manufacturers
The latest generation of Q2O systems goes a step further by using knowledge-based software to reduce the dependence on highly skilled experts. Non-programmers can now capture necessary knowledge with intuitive visual tools (for example, drag-and-drop, rather than by pesky programming languages such as Lisp or Prolog).
Since the ability to harness a company's intellectual property and know-how is key to building competitive advantage, product knowledge management systems have become foundation tools that allow engineer-to-order (ETO) enterprises to capture and maintain critical sales and product knowledge in an enterprise knowledge base and expert system. The most advanced ETO companies leverage their intellectual capital to automate the Q2O processes of attracting customers, selling products and services, fulfilling orders, and servicing customers. Such systems have to be both internally and externally focused (to span the demand chain of any given company), and have to work with complex business rules related to processes, products, pricing, and services (there is virtually no limit to what kind of knowledge can be captured).
The emphasis here is on knowledge management rather than rule management, and this “assisted configuration” approach also helps the manufacturer. The software can output a generative manufacturing specification that is user-defined and that can include a bill of material (BOM), project, quote, order, drawing, and so on. The integration choice (seamless via the Web or desktop) can be at the data, function, or Web service level. For example, pricing information integration could involve all those levels.
A good example of a knowledge management provider is Selectica Inc. Aside from its customary Selectica Configurator, Selectica Pricer, Selectica Quoter, and other “usual suspect” Q2O products, Selectica offers Selectica Studio and Selectica Repository, which leverage declarative constraint engines. As mentioned previously in Q2O Systems: Solutions for Quotation Management and Pricing Configuration, many existing configurators are custom programs that were written specifically for the product or family of products being configured. This means both the configuration logic and the data describing product attributes are combined in a single computer program that requires significant reprogramming to reflect simple product changes.
In contrast, Selectica applications use a constraint-based engine that is separate from the data describing the product attributes. This allows businesses to easily create and modify the Selectica KnowledgeBase to reflect product changes by using the integrated modeling environment, thereby eliminating the need for expensive programming teams.
To that end, Selectica Studio models, tests, and debugs applications using a single tool, which simplifies development processes, whereas graphical knowledge base and user interface (UI) development tools enable application deployment and maintenance by nontechnical personnel. Selectica has developed an integrated modeling environment that allows its customers to easily create a sophisticated knowledge management system without any programming. The programs use drag-and-drop tools that enable sales and marketing personnel (rather than expensive programmers) to maintain and enhance their customized solution.
Using these drag-and-drop tools, businesses can easily create and update knowledge bases containing product attributes; create hypertext markup language (HTML)–based graphical user interface (GUI) applications; test the application interactively as the application is being built; and conduct batch order checks. Businesses can also verify the semantics of the knowledge base and create flexible models from individual models. Users can create and maintain automated knowledge bases through a knowledge base development environment (KDE), although administrators can maintain the consistency of knowledge bases using a fully automated environment and a command line interface (that eliminates the need for a UI).
Selectica Repository is a database that stores the knowledge base in a readable format, which can easily be queried. The solution provides knowledge bases developed by teams from various locations, allowing for easy maintenance. Selectica's engine, written in Java, is easily deployed on various operating platforms, and the use of Java 2 Enterprise Edition (J2EE) allows the vendor to support a range of deployment environments. Such environments range from Java applications in a notebook computer to server-generated, browser-readable pages, with the same engine and the same knowledge base.
Along similar lines, the Cincom Q2O Suite 8.0 consists of Cincom Socrates 8.0, a proprietary knowledge base application studio, and the Cincom SalesConfigurator 8.0 module for sales configuration and proposal management. Like Selectica, Socrates (formerly Cincom Knowledge Builder), which is aimed at knowledge developers (not necessarily IT staff, but rather departmental power users, such as engineering experts), is an enterprise environment for developing and deploying expert sales and configuration systems.
Acting as the “brain” and underlying knowledge base application studio, Socrates offers product configuration functional underpinnings to enable customer needs analysis, pricing, document generation, diagnostics, and intelligent searching. The enterprise knowledge base includes the enterprise project environment with Object Manager, Constraint Map and Decision Map, Forms Editor, Database Attach, List Editor, Tree Editor, Case Editor, Hierarchy Editor, and Procedure Editor as building blocks.
Unlike within most product configurators, Cincom's graphical knowledge modeling environment makes it easy for nontechnical users to quickly develop solutions that assist in the analysis of customer needs, product selection, product configuration, pricing, quotes, and customer support. Modeling tools enable domain experts to capture and maintain rules in the knowledge base in a hybrid rules engine that handles constraints, decision trees, pattern matching, configurations, and procedures. Decision engines serve to provide interactive recommendations and advice on the most suitable products, services, and courses of action. They also help users decide on the next task or action in a workflow-based system, based on current events and available data. In addition, they help to configure products, services, and workflows. There is a rapid application development (RAD) environment for the Web, Microsoft Windows, and embedded applications, where a universal client interface can be Windows, rich Web client, and thin Web client. Although written in proprietary technologies, RAD features an open architecture for seamless integration using extensible markup language (XML), open database connectivity (ODBC), or common object model (COM).
Cincom SalesConfigurator is a knowledge-based configuration and proposal management system aimed at users (whether they are customers, direct sales representatives, agents, etc.). It handles the tasks of sales management (for example, opportunities, quotes, customers, contacts), including discounting and proposal generation (from a Microsoft Word document library of static or dynamic templates). SalesConfigurator also contains product data capabilities, such as searching for parts (even if they are not in the catalog) and templates for features, components, and special options, and there are remote and detached capabilities for mobile users too.
APICS Dictionary defines a knowledge-based system as a computer program that employs knowledge of the structure of relations and reasoning rules to solve problems by generating new knowledge from the relationships about the subject. Knowledge management is an information repository used by executives, managers, and employees to more effectively produce products, interface with customers, and navigate through competitive markets.
Thus, at the center of Cincom's and Selectica's product knowledge management suites is a single version of the truth—sometimes referred to as a “single system of record” (referring to the integrity of data). This is a critical component that should provide a competitive advantage for many manufacturers for a number of reasons, including the ability to launch new products with intensity and focus; accelerate the new product introduction process; redefine product, pricing, promotional, and distribution strategies; and simplify engineering change order and document control functions. It brings enterprises much closer to the dream of capturing years of collective product knowledge that can be used for field training and to support the sales process, and that can leverage relevant insights to every custom order. That role is now being extended even further, as configurators become linked with enterprise resource planning (ERP), product lifecycle management (PLM), and other related enterprise systems.
Other important (although often overlooked) benefits that complex manufacturers should be able to achieve by integrating knowledge-based configurators with their enterprise applications include
* Improved master data management (MDM)—in which the format and information of the product can be synchronized and unified across all disparate systems from the upstream supply chain, to the engineering and production floor, to the front-end sales configuration and field service. This provides faster time-to-market capabilities given the need for less sales force and partner training. Knowledge management might be the most important asset of the value chain, and the way it is captured and packaged must be clear to everyone.
* Improved market intelligence—by integrating the configurator with marketing analysis data mining tools. In this way, an organization can better understand what drives customer decision making, as well as what the customer's preferences are from an option standpoint. Organizations also have the ability to discover market patterns, customer profiling and product association, and pricing and product discount differentiation based on geography, customer, and volume—all creating opportunities for up-selling and cross-selling. Support for the acquisition and retention of profitable customers through a personalized approach to campaign management and through the blending of inbound and outbound interactions are capabilities that enable organizations to support targeted marketing campaigns and pursue up-sell opportunities.
To that end, WebSource CPQ, in addition to not requiring any software installation on neither the user side nor the administrator side, is able to keep all the product models (rules, attributes, and so on) in a relational database. This is in sharp contrast to most other peer products that have to resort to compiling product models into binary objects, which does not facilitate easy access to data. For example, it is not easy to list all the rules where a certain attribute is in the constraining condition, or to list all the rules that perform an operation on a certain attribute. To further illustrate, if, for whatever reason, a user is prohibited from selecting the color blue, the configurator administrator should be able to easily obtain all the rules that permit the color blue, and to then investigate why blue has been prohibited. For more information, please see Can We Intelligently Use Part Numbers to Configure and Order the Right Products?
A report from AMR Research, titled Configuration Is the Heart of Customer Fulfillment for Complex Product Manufacturers (published March 31, 2003), discusses the significant financial impact of Q2O implementations. The report mentions such findings as a 95 percent reduction in order completion costs; a 13 percent reduction in order rework (from 15 to 2 percent or less); up to a 50 percent reduction in engineering support; a 20 percent reduction in incomplete orders; a 10 percent reduction on warranty costs; a 65 percent reduction in order cycle times; and a 50 percent drop in lead time (from over 60 days to 29 days). With such beneficial results, the logical question becomes, why aren't Q2O systems implemented almost everywhere?
There are many reasons why Q2O systems aren't implemented almost everywhere, beginning with the fragmented nature of the market. This causes market confusion, especially given that organizations need more awareness and education about what Q2O can and cannot do for its users. There are many (maybe too many) best-of-breed product configurators and silo-based tools that may or may not be suitable for a certain user environment. These best-of-breed products were typically created and managed by product experts, and are thus inflexible, not integrated with other enterprise systems, and not readily supported by IT departments. Yet, to meet customer requirements and reap a return on investment (ROI), front-office applications must be integrated with back-end enterprise processes. This integration, plus the availability of Web-based customer relationship management (CRM) suites, has allowed many “to-order” manufacturers to obtain immediate responses on quotes, proposals, configurations, pricing, and in some cases, even on delivery dates.
The market has long realized that CRM systems not only require integration with ERP systems to reconcile such data as customer master data, but also the bigger issue of integrated inter- and intra-enterprise business processes like prospect to cash. For make-to-order (MTO) and ETO products, the overall process starts with capturing customer requirements at the front-end that can be dynamically converted into work orders, routings, and other procedures via product configuration engines. Furthermore, intelligent configurators are increasingly required to provide a direct link with shop floor execution to, for example, add or change an operation, change the work center where the operation is performed, change the run rate on that operation, and change the setup time. They also need to produce special instructions or comments on the work order, sales order, or invoice.
Also, in the case of integrated and packaged software, there would have been many misfit deployments of simple commercial configurators or guided selling systems into highly complex environments (and vice versa—overwhelming knowledge-based configurator systems in light assembly firms), which have resulted in user disenchantment. Further, what has been causing additional confusion for users are the pure-play, guided-selling vendors that are anxious to get into the low end of the configuration arena. Specifically, they are underselling their offerings at a fraction of what a comparable configuration system would cost, but they are also delivering less in terms of comparable functionality. The inherent capabilities of the configurator tool will be determined partly based on whether it is an ERP module, a CRM module, a part of a total Q2O suite, or solely a stand-alone configurator. As a basic requirement, the configurator must be capable of handling the technical rules for specification and configuration of mass-customized products and services, while some configurator tools will also directly handle pricing, discounting, and sales quotes.
0 comments:
Post a Comment