Custom Product Development – What is it? And Why it is Beneficial?


More and more companies are interested in investing in custom product development. Let us take a look at how organizations can leverage this competitive advantage in the marketplace. And how it may be easier to achieve than you think.

In response to constant pressure to reduce costs, reduce time to market and increase product value, companies have invested heavily in custom product development. As market conditions, business goals, and job roles constantly change, companies must take steps to create a culture that embraces all cross-functional workstyles.

Consumers’ unique needs, desires, and pain points often require highly specialized solutions. Information systems are essential for reliable management of the entire product development process, especially when a design is created for the first time.

When it comes to developing a highly specialized product for specific users, using the right technology can save your company time and money in delivering high-quality products.


Defining Custom Product Development

Custom Product Development (CPD) is the process of developing customized or engineer-to-order products. This helps to create custom development cycles. Thereby aiding to create a new product or enhance the functionality of an existing model. These products are goods or services that are modified, changed, or adjusted according to a specification. This is a design document that ensures that all aspects of development processes, solutions, and deliverables are aligned with an organization’s needs.


Why Organizations Need to Invest in Custom Product Development

Organizations are investing in custom product development because of the liberty it gives them throughout the design process. Manufacturers can offer specialized services that the typical provider may not have access to, such as machining, sheet metal fabrication, automation, validation, and hardware installation.

Manufacturing partners may take on more production responsibility when assembling customized products. In turn, companies can address specific market needs and create natural extensions of their current product portfolios. A custom end-to-end product development service could also be useful for companies looking to outsource manufacturing to third parties. Any custom product development solution needs to have the following attributes:

  • They need to be cost-effective, especially over the long term.
  • Need to have the ability to integrate with existing systems.
  • Must include easily accessible support and maintenance options.
  • Has to be 100% scalable.

Industries that particularly benefit from the custom development cycles include technology, healthcare, and entertainment. The complexity of these and other interactive customer-centric businesses makes it even more valuable to have customized solutions available.

KloudPLM provides PLM technologies with a collaborative platform to easily share product designs, modifications, and design decisions with customers, engineering teams, and custom product sales.


Challenges Faced in Custom Product Development

Challenges in developing intuitive and configurable products include:


Constant Communication 

Make sure everyone is aware of changes in demand or other events that may affect delivery time. Stay involved in every step of the process. Make sure you communicate efficiently so everyone can plan with the goal of meeting deadlines.


Maintaining Quality 

Keeping all parts of the process on schedule and on budget while maintaining quality can be a challenge as different teams have different timelines and priorities to work on as production schedules change. Be sure to use collaborative checklists and calendars.


Short Delivery Times & Price Pressure 

Both parties are under mutual pressure. Demand is unpredictable and often fluctuates, while labor-intensive operations can suffer setbacks as production progresses. Keep in mind that about 80% of a project’s cost is incurred during development, so it’s even more important to factor in overhead and labor to keep manufacturing costs down.



Agility Modern development processes may not adapt well to change. Focus on results and products instead of products and projects. This helps your process to react quickly to market changes and be flexible in terms of demand.


Adaptive Supply Networks 

Grow your business through a nuanced understanding of your network’s unique strengths and leverage them to be effective. Creating a new process can be complex; Expectations need to be managed accordingly.

Custom products ultimately solve more problems than they create. However, it is important to be aware of their limitations as well as their values before investing development resources in them.


Read: “The Impact of The Fourth Industrial Revolution On Technology”


Understanding Custom Development Process

The custom development process is a comprehensive plan for creating custom products.


Requirements Definition 

Determine everything your product requires, from design to delivery and use. Communicate the need for this product with supply chain partners and external vendors. Custom projects can often get complex, so it’s a good idea to make sure your ideas are realistic. This method could involve scheduling a consultation to determine if a partner meets the needs of your production process.


Down Payment & Prototyping 

Start a partnership with a custom product development company. When creating detailed plans that gain stakeholder buy-in, focus on long-term solutions that will benefit both parties in the future, while considering the balance between quality and affordability. Develop a prototype together as a proof of concept for both the process and the product.



Design and build a prototype as close as possible to deliver. Then evaluate the prototype to see what changes, if any, need to be made before ramping up production. This allows quality control and other decision-makers to decide what to do before full-scale production begins. Also, consider how these changes affect the user experience.


Final Product Delivery 

Using the refined development process, a final product is manufactured and delivered to all specified specifications. Established sales channels are an effective way to generate leads as launch approaches. Be ready at launch with enough inventory to meet demand while supporting teams as a new development cycle start over.


Read: “What Are The Benefits of an Advanced PLM Application”


How PLM can help in Custom Product Development


Integrated CRM and PLM Cloud Platforms 

Provide accessible resources for all customer relationship management and product lifecycle management services.

Project Management 

Use resources efficiently to meet deadlines and achieve results.

Responsive Change Management 

Respond to market changes as they occur while taking proactive steps for future success.

Supplier Management and Collaboration 

Engage in ongoing strategic discussions about project expectations and deliverables with suppliers. When design limitations arise, employees should use this as an opportunity to get creative and apply their knowledge. Internally, customer service, purchasing, and production teams need to collaborate early and often when development begins to prepare for a smooth launch.

CRM, CPQ, and ERP Integration

 Integrate your platform with the essential elements of project management to further optimize production and sales. Managing multiple leads from a central resource can save time and help keep all projects on track.


Flexible Configuration and BOM Management 

Custom products must be intuitive and configurable to meet customer needs. Manage the budget of entire projects in an updated and collaboratively edited bill of materials (BOM). These requirements allow you to realize savings in development time, design, and production costs.


Final Thoughts

Use custom development software and processes to adapt a product-centric approach to a customer-centric approach or vice versa. Ideally, mass customization is profitable and sustainable. All plans must first be made with a realistic delivery.

Using the best tools available is a proven path to business success. Learn more about how the KloudPLM platform enables custom product development for leading companies. Schedule a demo to know more. 

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