It’s not uncommon for manufacturers to use CPQ for products with millions of possible configurations. Even seasoned salespeople may struggle to commit this vast catalog of options and their relationships to memory.
CPQ can help solve this problem by automating pricing and configuring new, highly customized products quickly and accurately. But how?
Automated Pricing
CPQ software automates pricing rules so each product configuration is priced according to your set rules. This reduces the manual data entry required by sales reps, ensures consistency and accuracy, and gives you a competitive edge by improving pricing margins.
In addition, CPQ software can automatically generate CAD models and a Bill of Materials for each configured product. This streamlines the engineering process and improves sales-to-engineering collaboration. Whether your manufacturing business needs to scale globally or offer flexible pricing for different customer segments, the Configure Price Quote software program can handle everything.
Manufacturers can increase revenue, stay competitive, and improve customer retention with a fast and accurate quote process. CPQ solutions manage quotes and price estimates using predetermined pricing rules, product data from ERP and order management systems, and customer segmentation information from CRM to produce more accurate quotes than any manually created quote. This frees up engineering resources to refocus on product innovation.
Automated Configuration
Getting quotes to customers as quickly and accurately as possible is an essential sales goal for manufacturing businesses that sell highly configurable products. A CPQ solution helps meet this challenge by automating the configuration, price, and quote process. This enables more efficient and effective product configuration, reduces costly errors, and improves the customer experience.
Manual processes can take days or longer to complete. This results in bottlenecks that impede sales. More accurate or consistent pricing, rogue discounting, and other issues can cost companies hundreds of thousands of dollars. CPQ software eliminates these problems by ensuring that quotes are accurate and standardized.
A CPQ solution enables sales teams to create and share customized quotes with their clients. 3D visualization and VR/AR features deliver an immersive experience that wows buyers and increases product understanding. A no-code rules engine empowers non-technical staff to set CPQ’s logic and constraints, reducing development time. The ability to auto-generate CAD models, BOMs, and cut sheets streamlines engineering workflows and improves sales-to-engineering collaboration. CPQ software can also auto-generate a product specification optimized for each customer’s specific function and needs, improving engineering efficiency and speeding up production times.
Automated Ordering
CPQ software can automatically determine what’s possible and profitable to build with a configured product assembly, eliminating the need for engineering to review each configuration. It also optimizes pricing, removing human error and providing more accurate and fair customer quotes.
HVAC manufacturers need a quick and accurate way to configure and quote products to their customers. Only accurate quotes lead to good customer experiences, costing a manufacturer hundreds or even thousands of dollars. CPQ software reduces citing errors by offering sales reps and customers a visually guided selection of the features, parts, and options needed to create a custom solution.
It then calculates prices in real time based on predefined rules that consider raw materials, production capacity, delivery charges, and markups for different customer segments and product options. This helps ensure quotes are accurate and scalable while remaining competitive. Once the sections are approved, a system can instantly generate orders for all channels (e.g., direct and indirect sales, online marketplaces, offline stores) and route them to the most fitting inventory location.
Automated Bill of Materials
Manufacturing is where the rubber meets the road, and it must be able to deliver on what engineers design and sales teams sell. CPQ software can automatically generate CAD drawings, BOMs, work orders, and other essential documents to facilitate an efficient hand-off from the quoting process to manufacturing.
A bill of materials is a centralized list identifying what is needed to manufacture a product. The two main types of accounts of material are the engineering bill of materials (EBOM) and the manufacturing bill of materials (MBOM).
An EBOM details how a product is designed, whereas an MBOM lists the parts and materials required to build a specific version of a product. CPQ software can generate both types of BOMs, which helps to improve efficiency and reduce waste. Moreover, an MBOM can identify vulnerabilities in the production line and stay ahead of potential shortages and disruptions. CPQ solutions also enable manufacturers to automate the generation of quotes based on rules that consider pricing discounts, configurations, product features, and different revenue types.
Automated Reporting
The custom manufacturing market is rising as companies seek to develop products that meet their customers’ unique needs. To support this shift, manufacturers are turning to configure, price, and quote (CPQ) software to automate slow, manual processes and create a more robust customer purchasing experience.
CPQ streamlines the product configuration process using predefined rules to determine viable product assemblies. This eliminates the need for back-and-forth communications between engineering and sales. It also ensures that quotes are valid and enables salespeople to offer discounts without the risk of violating pricing rules.
In addition, a CPQ solution provides analytics that helps organizations optimize their sales strategies. With a robust reporting system, a manufacturer can quickly identify and analyze the data that most impacts sales performance, customer satisfaction, and financial success. This information can be used to improve the design of future products, drive new sales opportunities, and provide a better buying experience for their customers. This information can also be used to optimize operations, improve supply chain efficiency, and reduce inventory waste.