Roughly a decade ago, Pella Corp. (Pella, IA), a privately held maker of windows and doors, had fallen into the trap of assuming its customers would buy whatever it made. "We got caught up in our brand, got caught up in the belief that our windows would sell themselves," says Rick Hassman, director of Oracle applications for Pella, which posts annual sales of $1.1 billion, according to market researcher Hoover's. With sales then on the decline, company management soon put a stop to that line of thinking, launching an aggressive initiative of continuous improvement that continues today.

The goal: Give customers more options in price, color, and size and let their desires dictate the manufacturing process. Toward that end, Pella installed a wide range of Oracle Corp. enterprise software applications (including order process management, customer relationship management, and an online product configurator) aimed at transforming the way Pella interacted with customers.

Today, Pella no longer makes product to hold in inventory, instead building everything to customers' specifications. "We have no finished goods stock. We build everything to order," Hassman says.

But that doesn't mean the process can slow down. Once an order comes in, the Oracle-based advanced planning and scheduling application determines which of Pella's 12 U.S.-based facilities should manufacture the item for maximum efficiency. That helps hold down costs and speeds product into the waiting hands of customers ranging from Lowe's home improvement centers to the 80 mostly independently owned Pella Windows stores across the United States.

Pella's journey from product-centricity to customer-centricity typifies what all product manufacturers must go through sooner or later, experts say. "Lots of manufacturers used to believe if they had a better design they would beat their competition. Over the last few years, manufacturers have begun to realize that product advantage is very difficult to sustain," says Jim Shepherd, senior vice president at AMR Research (Boston).

Whether or not you want to admit it, it's all too easy for your competitors to improve upon your most innovative designs, to match your quality, and to beat your price. What can't be duplicated nearly so easily is the unique relationship you have with your customers. "The real value is the customer relationship. As long as you sustain that, you'll succeed," Shepherd says.

Easier said than done. With price pressures being what they are, woe to any manufacturer that would dare ignore cost. But keep going down the commodity path and there's no telling where it will end. A much better option is to make yourself indispensable to your customers so they come to depend on you for service, for innovation, for the special way you -- and only you -- fulfill their needs. In order to do that, experts say, it's critical to make yourself easier to do business with, understand who your best customers are, and cater most to them.

Focus on Their Supply Chains

Increasingly, endearing yourself to customers means becoming an asset to their supply chains. "You have to actively work with them to see how to help them improve their supply chain," Shepherd says. That means understanding what each customer values most. For one customer, price may be paramount. For another, lightning-fast shipping. For yet another, it's being present in all the geographies in which the company operates so the customer doesn't have to have multiple suppliers for different regions.

Most companies are trying to reduce the number of suppliers they work with -- the trick is to avoid being the one they decide to replace. That assumes, however, that the customer is worth keeping.