DARC Consulting

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Mass Customization and Oracle
Configurator
DARC Consulting
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Agenda

• The Concept of Mass Customization
• Examples of Customized Products
• Traditional Costs of Customization
• Costs of Specials
• Competitive Advantage
• Customer Advantage

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Agenda - continued

• Environments
• Oracle Enablers for Mass Customization
• Oracle Configurator Users
• Oracle Configurator
• Conclusions
• Questions

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The Concept of Mass Customization

• Deliver goods and services which meet individual
  customers needs efficiently
• Produce exactly to the customer requirement
• Same efficiency as a mass produced product
• Strategic Advantage
• not only offering products or services, but also
  the capability to deliver a product according to
  a customers needs and requirements.

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Examples of Customized Products

• Computer Dell Gateway
• Automotive GM Eaton Truck
• Apparel - Levi Strauss
• Insurance Kansas Farm Bureau
• Telecommunications - Motorola
• Industrial Products - Donaldson
• Medical GE Medical
• Service BellSouth

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Traditional costs of Mass Customization

• Investigation and specification of the customers
  wishes
• Configuration of individual products
• Transfer of the specifications to manufacturing
• Increased complexity in production planning and
  control
• Coordination with suppliers

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Costs of Specials

• Shipping More "Specials" Than Standard Orders
• Disruptive nature of "specials"
• Expediting
• Rework
• Organizational inefficiency increasing costs
• Lost selling opportunities
• Customer's actual needs differ from published
  configurations
• Large, deep bill of material structures
• Add to company overhead
• Do not add real value to the product

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Costs of Specials

• Giving Away Items
• Customer would have purchased
• Just to make the configuration work
• Products that could have generated revenue are
  given away
• Extra shipping charges

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Costs of Specials

• Inability to validate customer requirements
• Lost future business
• Dissatisfaction during previous selling
  situations
• Processing delays while the company validates
  customer requests
• AR aging
• Due to delays in satisfying customers
• The cost of capital during the collection delay

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Costs of Specials

• Sales and Customer Service Time
• Fixing problem orders
• Lost selling time
• Additional travel costs
• Premium shipping costs
• Cost of customer dissatisfaction

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Competitive Advantage

• Expert knowledge
• Reduced lead time
• Quick new product introduction
• Customer integration
• Unassisted Selling
• Guided Buying
• Valid Quoting/Ordering

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Customer Advantage

• Exactly as they want it
• Valid for their application
• Only what they need
• No time lost on rework
• No extra shipment delays

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Environments

• Various levels of customization support different
  strategies and environments.
• Engineer to Order (ETO)
• The customer participates in the design
• Make to Order (MTO)
• Manufacturing customized products including
  components
• Assemble to Order (ATO)
• Assembling products or services from standard
  products and options
• Pick to Order (PTO)
• Kitting

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Oracle Enablers for Mass Customization

• Oracle Configurator
• Oracle iStore
• Oracle Sales on Line
• Oracle Contracts for Sales
• Oracle Advanced Pricing
• Oracle Quoting (HTML)
• Oracle Advanced Planning

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Oracle Configurator Users
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Oracle Configurator

• Configuration for simple to complex products and
  services
• Guided buying/selling for non-expert users
• Real-time validation during option selection
• Multiple user interfaces for different types of
  users

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Oracle Configurator

• Uses ERP Model Bills of Material
• Can use rules to validate
• Can have multiple levels
• Auto-creates
• Items / Catalogs
• Bill of Material
• Routing
• Supply orders (make and buy)

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Conclusions

• Mass customization can differentiate your
  business
• Customer integration
• You can eliminate Specials
• Reduce costs
• Improve on-time performance
• Oracle Configurator is the key

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Questions?

• ???

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Contact

• Todd Magnuson
• Principal Consultant
• DARC Corporation
• Email tmagnuso_at_darc.com
• Office 312.338.5115
• Mobile [phone]

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Thank You!

• DARC Corporation
• 125 South Wacker Drive
• Suite 2550
• Chicago, IL 60606
• Tel [phone]
• Fax [phone]
• Email info_at_darc.com