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Best practices in technology are helping manufacturers of complex products and equipment to move their offerings to market more quickly and more profitably by enabling them to become more cost effective and efficient. Following best practices is the best way to navigate the sea of challenges facing manufacturers of complex equipment.
Rapidly advancing technology, together with strides in management and logistics, bring the threat of commoditization to the doorstep of every manufacturer. At the same time, product life cycles become shorter and shorter. Responsibly managing these challenges is incumbent upon all manufacturers. But for the complex equipment manufacturer, managing these challenges is, well, more complex, because complexity goes beyond the design and function of the product or equipment itself and extends throughout the product life cycle – from design and planning, through manufacturing, service, and aftermarket sales all the way to obsolescence. As a result, best practices are especially applicable to complex equipment manufacturers.
For you, manufacturing is more difficult because complex product and equipment designs require cross-functional design teams coming from different disciplines and vendors in different locations and countries who must all collaborate on design and engineering issues. In relation to the design and engineering aspects alone, it often takes an extraordinary effort from complex equipment manufacturers to design for manufacturability using a single, synchronized, time- and cost-effective design collaboration process. Further compounding this complexity is the heavy reliance on component systems and subsystems used in complex products, all of which require integration not only in manufacturing processes, but also throughout the supply chain.
Beyond the challenges of designing and making complex products and equipment are the difficulties inherent in selling them. The quotation and order management processes must be highly flexible, because customers and dealers of complex equipment often require customized solutions. They also demand a high degree of configurability to allow them to customize the product themselves. These customers want “glass-pipe” visibility into your business so they can see, at any time, where their quotation or order is in the process. In addition, even before purchasing a complex product, customers are demanding value from you in the form of sales and engineering expertise. Finally, complex products require complex contracts, particularly contracts with government agencies and long-term contracts, and the complicated billing that follows them. Working under all of these sales pressures, the complex equipment manufacturer not only must make the product and make it right, on time, and within budget, but also must make a margin while doing it.
Margin pressures, in turn, have led to escalating service complexity, driving complex equipment manufacturers to enhance revenue streams by differentiating themselves through service offerings. This competitive differentiation goes beyond effective, lower-cost warranty and service management to the manufacturer’s ability to manage and coordinate parts, personnel, assets, resources, and vendors with the goal of reducing inventories while maintaining and growing customer retention and satisfaction. Moreover, service revenues have opened the door to a parade of value-added services for manufacturers of complex products and equipment, ranging from proactive predictive and preventive maintenance to vendor-managed inventory and addon sales.
What best practices should you, as a manufacturer of complex products and equipment, use to address the challenges facing your industry today? What factors determine success? What challenges must you overcome in supporting service and aftermarket sales? What best practices will help you control price and profits? How can you streamline and improve the accuracy and completeness of your compliance process?
This white paper addresses these questions and opportunities from the point of view of the manufacturer of complex products and equipment. Additionally, it demonstrates the value of best practices through the success stories of SAP customers. It provides a brief overview of the SAP® solutions used by these manufacturers of complex products and equipment to differentiate themselves from the competition through superior-value products and services against low-cost global providers.
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