I am writing this on the train on my way home from the 2016 European CWQ Conference in Berlin. Have you heard of the CWG, yet? CWG is a buzzing community of configuration experts, modelers, business people and developers – including customers, partners, and SAP.
This year, about one-third attended the first time. For sure, there were also the gurus and Jedi masters of configuration who have been on the topic longer than my whole working career.
In any case – this is the place to get answers, influence the product, and build a network of peers.
One thing we will need to improve at CWG, is our collaboration with our logistics supplier. Once again, some conference T-Shirts have disappeared somewhere between the US and Germany. I will keep my tiny voucher T-Shirt and hold it dear. It is a good reminder that dimensions and logistics matter.
What I take home from the conference
In the age of individualized products and lot size one manufacturing, product and solution configuration are strategic capabilities. The rising importance of omnichannel commerce and the addition of the B2C channel (or at least B2b, where industry giants sell to craft shops, DIY and other SMEs) requires a smart mix of automation & consistency.
The perfect order starts with a feasible promise
One key requirement for product modeling in the mill industries, especially in steel, was to define the “manufacturable” options. Most mill industries deal with dimensional products where fixed SKU-definitions lead to a master data nightmare. Pure mathematics would give you already infinite dimensional options of length, width and thickness.
Plus, the manufacturing reality is full of constraints. Only certain machines can manufacture certain grades, with further restrictions to possible thickness and width. One machine is logically coupled to another machine. Some quality requirements can only be reached on the newest instance out of multiple assets.
None of this is new.
The traditional approach to this is to capture orders, send them to order dressing (to check feasibility, derive a feasible path through the plant network, and calculate quality and production parameters).
Rather simplistic there are 3 possible answers:
- Know territory – the white zone
The customer requirements are either standard products, e.g. standard lengths of tube, or standard size sheet metal, or there are clear criteria to automatically decide: this is feasible.
- The gray zone
It requires complex rules, and sometimes human interaction, to clarify feasibility.
- Out of bounds
It is clear that a mill cannot manufacture this specification e.g. because the maximum width of a paper roll, or a metal sheet is exceeded.
Configurable products in commerce
In reality, this is much more complex . But it nicely illustrates alternative approaches in digital commerce:
- sell only SKUs and standard dimensions online (standardized white zone, Amazon-like)
- sell anything from the white zone (service-center-like)
- capture offers also in the gray zone (a blend of MTO and ETO)
Which approach works best for you?
It is, first of all, a business decision: Who are your buyers? How do you win their loyalty? Price? Simple ordering process? Flexible pick-up and delivery options? Straight-forward customization options? Loyalty programs?
All of these are valid in our industry. So you may want to try one approach in one country with one target segment, grow as you learn, and expand your options. There are 2 solutions play an essential role to enable all of these.
SAP Hybris and SAP Configure Price Quote (CPQ)
If I have to name one presentation that impressed me most during this conference, it was Karlheinz Agsteiner’s session on product configuration with SAP CPQ and SAP Hybris, especially the demo of the most recent version 6.0. I love the responsive UI, and the seamless integration of the CPQ configurator. It looks great on a mobile and a large screen without sacrifices on usability & elegance.
If digital commerce is part of your strategy, you should take a look yourself at the upcoming CPQ info day at the SAP Manufacturing Industries Forum in June, in Chicago, or during SAPPHIRE.
SAP Configuration Workgroup and Fall Conference in Las Vegas
If you missed the Berlin conference, I strongly suggest to join the CWG online and check the conference documents & agenda. If you are new to product configuration in SAP or look for cutting edge new modeling ideas – this is the place to be. Berlin was my best CWG conference ever – full of innovation, inspiration, and an amazing atmosphere of mutual support and friendship.
I return home full of new ideas, and also a few topics where I definitely will need to dig deeper.
If you need to discuss this further: I will be at SAPPHIRE in Orlando, at the International Conference for Metal and Mining, and at the SAP Forum for Building Materials. Plenty of opportunity for a deep dive or strategy discussion. Looking forward to meeting you.