Customer-Specific Engineering

This Business Scenario Map is designed for all discrete industries. It shows how the sales and engineering department work closely together to sell products to a customer that are based on a configurable standard product but often require some customer-specific engineering. The Map illustrates the benefits of the customer-specific engineering, based on a product model with predefined features. The customer can select predefined features as well as additional specific features. A customer-order-specific bill of material (order BOM) is determined automatically from the selected predefined features. Based on the order BOM, customer-specific parts are engineered and included in the overall structure to deliver the customer-specific product. The result is a very flexible process that supports all kinds of configurable products from 100% predefined to 100% customer-specific, which ensures a maximal re-use of standard parts and existing engineering knowledge. Order processing that requires customer-specific engineering can be significantly accelerated.

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Value Potentials	Business Benefits
	Variant configuration can be used to set up configurable poduct structures
Up to 100% reduced time for BOM creation*	Customer order specific BOMs (Order BOMs) can be generated automatically via variant configuration
Up to 80% reduced order processing timer (from weeks to hours)*	Reuse of existing engineering knowledge for customer-specific engineering
	Parts of the Order BOM structure can be frozen and developed manually as a customer-specific development
	Order BOM processing supports all kinds of configurable products from 100% predefined to 100% cusomer-specific
Up to 10% fewer engineering changes*	Step-by-step engineering is supported since customer-specific parts can be developed in a flexible manner. Finally all parts are included into the Order BOM.

Engineering

Product Management/Sales

Customer

Develop customer specific parts for additional features

Develop standardized parts for configurable product

Include in Order BOM

Technical clarification / freeze of customer specific parts

Automatic creation of Order BOM

Set up product model with predefined features

Receive customer specific product

Order product with predefined and additional features

Source:
* Discussions with Customers

The value potentials shown in this table have been reported by selected SAP customers or independent third parties as referenced herein. However, there is no guarantee that such value potentials can be realized in any particular customer-specific business processes, and SAP does not make any representations and disclaims any liability as to the appropriateness of the referenced value potentials for any specific customer situation.
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Business Benefits	Value Potentials
Customer-order specific procurement supported, including preliminary procurement via development projects	Up to 50% cost savings for cutomer-specific procurement processes*
Customer-specific product structure is directly used for planning and production	Up to 100% cost cavings for customer-specific procurement processes*
Customer-specific structure can be developed within the order BOM quickly, e.g. for bidding scenarios	Up to 20% reduced time for bid creation*


Customer-Specific Engineering In many companies products are customer-specific and require configure-to-order (CTO) or engineer-to-order (ETO) processes. Very often, the process is neither purely CTO nor ETO, but a combination of these processes, as the products can be predefined only up to a certain level. On top of this, many customers order products similar to standard products, but some do have special requirements. Within the SAP PLM solution you find an environment that addresses this complex scenario and its specific challenges in a very flexible and efficient manner. The basis is variant configuration, which enables engineers and product managers to set up a product model, including all variants of a configurable product, in one structure. All available features are predefined for the product, as well as the information about which variant of the structure is used for which features. In this model, standardized parts are used and everything that can be predefined is set up. As soon as the customer orders a product they select the predefined features according to their needs. If the customer has specific requirements that are not covered, the sales rep collects all specifications and notifies engineering. After technical clarification, the parts of the order BOM requiring customer-specific engineering are frozen for manual processing. As soon as the engineers have developed customer-specific parts they can be included in the order BOM. In this process, the engineers can work very flexibly since the structure can be completed step-by-step. Parallel to this, released parts can already be procured or produced. Finally, the order BOM is completed and the product is assembled for delivery. A similar scenario can be used if the customer only places a bid invitation and a bid for a customer-specific product has to be calculated. In this case, the order BOM is only set up as completely as necessary and then released for costing only. One of the major benefits of all scenarios mentioned is the tight integration between engineering, sales, production and costing, which allows you to use the order BOM in all areas directly without any system integration or replication.