Most manufacturers don't know the cost of engineering change orders, survey finds

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 by software maker Cincom Systems.

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.

Despite the lack of cost information, more than half of survey respondents believe they can 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 United States manufacturing industry is left with manufacturing 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 past five years, and 26 percent anticipate the growth rate will be between 25 percent and 50 percent in the next two years.

Cincom targeted the survey to senior engineering managers at 900 manufacturers of complex industrial, electrical, and transportation equipment and systems between January and February 2007. Access www.cincom.com for more details.

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