Configurability and the back office black hole happens if no guidance is offered in the ordering process.

Imagine going into a restaurant that merely tells you they serve “food.” They provide no insight into the type of food they serve. They simply ask you to tell them what you want. You decide to play along.

You tell them what you want and the person with you also informs the waiter what they want. The waiter dutifully writes down the requests and disappears into the kitchen.

After some haggling (and a considerable delay), the waiter reappears and tells you what they can do, how much it will cost and how long a wait you will have to get the food that you have requested.

Does this sound efficient? No. Without offering guidance to customers in the form of a predetermined menu, it is exceedingly difficult for everyone involved: the customer, the waitress, and the kitchen staff. The organizations that could form your supply chain can’t help you much because you don’t know what supplies you will need to prepare customer orders.

I’ve just described configurability and the back office black hole that happens when 2 customers come in. What if it was 50 or 100 in a day? Would the process scale? Of course not. So, what might be barely acceptable in very low volume completely falls apart as volume increases. Variety and volume are the enemy. And, if there’s no way to anticipate customer demand, you can’t set up a supply chain. The restaurateur will have to head to a local grocery store and pay retail prices for the food they need to procure for each customer order.

This isn’t a gross exaggeration about what happens in companies that offer configurable products and services: there all too often is no menu, no starting point from which customer orders can be configured, priced, quoted, and set expectations about delivery timeframes. And, again, it’s impossible to set up a supply chain to execute against customer demand.

I’ve offered for years that an organization is best off giving customers the power to see the possibilities. Making the possibilities known only in the back office undermines the relationship with customers. A menu goes a long way to connecting with the customer and the team that works to satisfy the customers.

Thought for the week:

“In this life, to earn your place you have to fight for it.” — Shakira

 

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Dave Gardner

Dave Gardner is a management consultant, speaker, author, and blogger based in Silicon Valley. He's been in the front row for the birth and evolution of Silicon Valley, the innovation capital of the world. Since 1992, Dave Gardner focuses on making the complex simple around people, process and technology. Dave is the author of Mass Customization: An Enterprise-Wide Business Strategy - How Build to Order, Assemble to Order, Configure to Order, Make to Order, and Engineer to Order Manufacturers Increase Profits and Better Satisfy Customers.

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