An important revenue stream for a modern wholesale distribution business comes from giving your customers choice, tailoring your products to their exact needs. The trick is to manage the process so that the supply side of your business keeps up.
Product Configuration enables you to respond quickly to customer requests. You can create one-off products from standard parts without having to add a new product to your files. The system helps staff – particularly those with limited technical knowledge - get to grips with the order of parts and the assembly process.
Say, for example, you wanted to sell PCs with a range of memory options, various hard disks and a number of different screens. In a traditional distribution management system, you would have to think of all the possible combinations in advance and create part numbers and paperwork for each.
With Product Configuration, you enter a set of rules about how a product can be assembled. For example, you could define the largest size of memory your PC’s motherboard would take, and the discrete sizes in which the memory is available. Product Configuration then enables you to build a product using any combination of parts to suit the customer. It may even come up with a new product idea.
Managing custom distribution
You can use the software to test out different options and generate quotes. If you think a custom design will be sufficiently popular, Product Configuration will create a new standard product for you.
If the customer decides to go ahead, Product Configuration can either generate an order structure where your warehouse personal gathering and package the different products in stock, or if it is a more complex product that requires production then the system automatically creates BOM (bill of materials), BOR (bill of routing), operation lists and pricing.
Checking margins
You can calculate cost price and item margins using IBS Product Configuration. You can also see margins by customer, so you can check that offering special products is actually making you money.
Armed with this information, you can go back and adjust the rules for product configuration to maximize revenue from this side of your business.