Value-Chain Report -- Company Delivers Configuration Solution For ETO Value Chains

Value-chain integration can be complicated for any company. Imagine the increase in that complexity when your company manufacturers strictly or mainly engineer-to-order (ETO) products. Each ETO product is unique, therefore, how do you develop any standards on which to base a system of integration -- whether concentrating on selling, designing, pricing, or building your products? Cupertino, Ca.-based Design Power Inc. has been addressing this issue for more than 10 years with products based on its Design++ scalable, open software platform that makes instant ETO and mass customization feasible for both simple and highly complex products. One of the company's slogans is "a spreadsheet simple solution for mass customization." Recently, Design Power took its product offerings a step further with CustomWise, an Internet/intranet-accessible software package that automates the configuration and engineering of complex manufactured products. This gives an edge to a sales force that is selling ETO products because the program allows instant access to technical configurations on the fly. The program generates product proposals, complete with technical drawings, a 3-D computer model of the customized product, and a bill of materials. "The engineer and design is typically instant, and the quality you produce with these designs is consistent, which means less rework," says Ulf J. Strom, president and CEO of Design Power. "You really have a tool that can create a higher degree of customer satisfaction and customer loyalty." The CustomWise software engine resides on a company's central server and is accessed via a Java-based Web client. In addition to sales staff, distributors and key customers are potential users of the program, the company says. Design Power was spun off from Nokia in 1989 with the goal of applying artificial intelligence to complex design problems.

Design Power Inc.

***Consultant Sees B2B Exchanges Reverting To 'Micro-Marketplaces' While the number of trading exchanges (many-to-many digital marketplaces for a specific industry or group of products) seems to grow with each passing day, not all B2B pundits are enthusiastic about the success of the exchanges as a group. "Many of the current crop of business exchanges will fail because they have become undifferentiated commodity suppliers. They can't support the real-time collaboration that e-business requires," says David Taylor, cofounder, eMarket Holdings LLC, an e-business consultancy in Stamford, Conn. For the future, Taylor sees the number of exchanges dwindling, and those that remain will develop a much broader base of collaboration-oriented services, albeit at high cost. "Collaboration in terms of data exchange is a difficult thing to pull off because of the need to establish standards of format, timing, and process; align management organizations; and then synchronize business cycle times with partners," says Taylor. "Then you have to go do it with someone else, because it's a one-to-one thing for each company. Multiple companies agreeing to something is a very involved and thus costly process. The costs aren't in the software, [they are in] the process implementation." High costs are but one factor that could spell the demise of trading exchanges. Others include difficulty in signing peer companies to participate in the exchange, and the specter of competition established with a company's other sales/distribution channels. Taylor sees exchanges reverting back to "micro-marketplaces," which are either small, niche-oriented exchanges or private (one-to-many), single buyer, or seller exchanges. "If an exchange can't find enough companies to sign up, it might just sign up one and give them an exclusive," says Taylor. "One of the exchanges we studied derived 80% of their business from just one client."

eMarket Holdings LLC Tonya Vinas is New Media Editor of IndustryWeek.com and IWValueChain.com. IndustryWeek Senior Editor Tim Stevens contributed to this report.