In the last blog post, we examined how APS (advanced planning and scheduling) benefits modern manufacturers. In this post, we will talk about CPQ (configure price quote), another key integration for advanced ERP software.
What is CPQ (configure price quote)?
Today’s products are highly complicated. They are made of an increasing number of parts, components, and subcomponents and configured in many different ways for a multitude of needs.
CPQ is needed to speed up your order-to-delivery process. It automates the product configuration and selling process, facilitates customisation and order confirmation, and generates proposals and other documents automatically.
An advanced CPQ application should provide manufacturers with the following tools.
Product configuration engine
There is a huge knowledge about all product configurations and their applications. This function captures that knowledge and builds it into automated configuration process that can be accessed by your sales reps and dealers using web browsers.
Quoting and ordering portal
Your sales reps, dealers and distributors can quickly customise their quotes and orders with detailed visualisation of products.
2D / 3D product imagery
This function automatically generates configuration-specific and intuitive 2D or 3D product imagery for immediate confirmation.
Automated documentation process
This function automatically produces customised proposals, submittals, technical specifications, product brochures and other sales documents, in MS Word or Adobe Acrobat pdf formats.
How CPQ helps manufacturers
Advanced CPQ tools can deliver multiple benefits to manufacturers.
Closing more sales, faster
CPQ automated tools help eliminate errors in the quoting process, accelerate the sales cycle, and provide sales reps with more accurate information. It also gives sales reps more opportunities to upsell.
You can capture the knowledge and experience of your best sales people, turn it into a guided process and share it to those who are less experienced. This helps achieve a higher conversion rate for new staff and reduce their learning curve.
Improving customer satisfaction
CPQ enable manufacturers to fulfil orders more quickly and consistently. Customers can tailor products that suit their needs more easily and place orders faster. Such capabilities are particularly crucial to make-to-order (MTO) or engineer-to-order (ETO) manufacturers.
Customer satisfaction is further strengthened by a more consistent buying experience across all touch points. Whether the customers interact with your website, mobile app, they are always presented with the same product configurations that fit their preferences.
Increasing quality and production efficiency
With CPQ tools, manufacturers will be able to quickly create and store rule-based BOMs and packing instructions. They can even generate 2D or 3D images of final products and assemblies to clearly show workers what to build. These functions help significantly reduce not only labour requirements but also errors in the production process.
CPQ makes your customers place their orders through a guided process and hence ensures that all necessary choices have been made. This, in turn, ensures that all orders are submitted to production on time and built to exact specifications. Moreover, CPQ can precisely capture customer requirements and present them for confirmation, which further prevents the risk of delivering the wrong product.
CPQ’s benefits - A case study
DE CARLO INFISSI is an Italian exterior wooden doors and windows manufacturer that has been in business for more than 50 years. They have adopted a CPQ solution from Infor since 2011. It gave them the opportunity to attain an unprecedented level of industrial flexibility. Most important, it has enabled them to enter the world of customisation.
In terms of sales operation, they have achieved a 95% reduction in the number of errors during the creation of the quotes. Their CAD system is now integrated with the 2D Design Automation. As a result, drawings and construction details of each quote and order can be automatically generated. Learn more about this case study in the following video clip.