Product configuration and inter-firm co-ordination: an innovative solution from a small manufacturing enterprise

In order to survive, a great number of small companies are forced to offer a wide product variety and often to respond to the market with customised solutions. At the same time, fast delivery is often a key to win orders. As a result, a vital challenge for these companies is to overcome the trade-off between product variety and delivery time, without compromising cost structure. Recent developments in Information Technology made available also for small companies a class of software tools – called product configurators – that promise to reduce this trade-off. This paper reports a case study of the implementation of a product configuration software in a small manufacturing enterprise. The paper highlights that the company enjoyed significant benefits from the implementation of the software, especially in terms of delivery time. Moreover, the case evidences that product configuration software can be proactively used as a tool for improving interfirm coordination.