SOURCE: Cincom Systems

June 11, 2007 08:00 ET

New Report Reveals That 73 Percent of Manufacturers Don't Know Cost of Engineering Change Orders

Most Believe Product Customization Could Increase Price Margins by 10 Percent or More

CINCINNATI, OH--(Marketwire - June 11, 2007) - Only 67 percent of build-to-order and engineer-to-order manufacturers know how much it costs to produce customized products, and 73 percent don't know the cost of engineering change orders. This is according to a research report released today by software maker Cincom Systems (www.cincom.com).

"Best Practices: Mass Customization and Build-to-Order Manufacturing" discusses the findings of the industry's first report -- from an engineering perspective -- on the state of mass customization and build-to-order practices.

"Manufacturers that cannot determine the cost of customized products take a huge risk in taking orders that may not be profitable. More importantly, without understanding the cost of selling, it is difficult to make strategic decisions regarding product mix and target customer segments," writes Jim Wilson, Cincom Program Director and author of the report.

Increasing revenue with product customization

Despite the lack of cost information, more than half of the survey respondents believe that they have the ability to charge a 10 percent or higher premium with a product customization strategy. While 73 percent of total respondents see product customization as critical for products over $100,000, 25 percent also see them as critical for products under $1,000.

As the building of simple/high-volume products moves offshore, the U.S. manufacturing industry is left with manufacturing very highly complex products. This trend is evident in the numbers. Most engineers (63 percent) have seen requests for customized products increase in demand over the last five years, and 26 percent anticipate that the growth rate will be between 25 percent and 50 percent in the next two years.

Cincom Systems targeted the survey at senior engineering managers at 900 manufacturers of complex industrial, electrical, and transportation equipment and systems between January and February 2007.

About Cincom Systems

Cincom delivers and supports innovative software and services to simplify complex business processes. For nearly 40 years, we have empowered thousands of clients worldwide to transform their businesses and outperform the competition by providing ways to increase revenue, control cost, minimize risk, and achieve rapid ROI.

Cincom's Quote-to-Order solutions help complex manufacturers dramatically streamline the quote-to-order and build-to-order process by automating complex, expert-dependent processes including: sales, pricing, quoting, design validation, and product configuration.

Cincom serves clients on six continents including BMW, Citibank, Boeing, Ericsson, Penn State University, Milacron, Siemens, and Trane. For more information about Cincom's products and services, contact Cincom at 1-800-2CINCOM (USA only), send an e-mail to info@cincom.com, or visit the company's website at www.cincom.com.

Cincom and the Quadrant Logo are registered trademarks of Cincom Systems, Inc. All other trademarks belong to their respective companies.

© 2007 Cincom Systems, Inc. All Rights Reserved

Contact Information

  • Media Contacts:
    Donna Hedge Burns
    Public Relations Specialist
    Cincom Systems, Inc.
    513.612.2305
    Email Contact