Extending customer order penetration concepts to engineering designs

The customer order decoupling point (CODP) concept addresses the issue of customer engagement in the manufacturing process. This has traditionally been applied to material flows, but has more recently been applied to engineering activities. This later subject becomes of particular importance to companies operating in “engineer-to-order” (ETO) supply chains, where each order is potentially unique. Existing conceptualisations of ETO are too generic for practical purposes, so there is a need to better understand order penetration in the context of engineering activities, especially design. Hence, the purpose of this paper is to address the question “how do customer penetration concepts apply to engineering design activities?”

A collaborative form of inquiry is adopted, whereby academics and practitioners co-operated to develop a conceptual framework. Within this overarching research design, a focus group of senior practitioners and multiple case studies principally from complex civil and structural engineering as well as scientific equipment projects are used to explore the framework.

The framework results in a classification of nine potential engineering subclasses, and insight is given into order penetration points, major uncertainties and enablers via the case studies. Focus group findings indicate that different managerial approaches are needed across subclasses.

The findings give insight for companies that engage directly with customers on a one-to-one basis, outlining the extent of customer penetration in engineering activities, associated operational strategies and choices regarding the co-creation of products with customers. Care should be taken in generalising beyond the sectors addressed in the study.

The paper refines the definition of the ETO concept, and gives a more complete understanding of customer penetration concepts. It provides a comprehensive reconceptualization of the ETO category, supported by exploratory empirical research.