How CPQ Enhances Manufacturing from Trucks to Cranes

Manufacturers working with complex products—like trucks, heavy equipment, or machinery—face significant challenges in managing product configurations, pricing, and quoting processes. From ensuring accuracy in pricing to aligning sales and production teams, these businesses require efficient tools to streamline their operations. Configure, Price, Quote (CPQ) technology offers a solution that not only simplifies these complexities but also integrates seamlessly into existing ERP and CRM systems to deliver precise, real-time quoting. In this guide, we’ll explore how CPQ transforms manufacturing, the advantages of integrating dual-BOM structures, and the benefits of full data integration for smoother operations.

Understanding Dual-BOM in Manufacturing

In the world of manufacturing, handling complex product configurations involves coordinating multiple Bill of Materials (BOM). Manufacturers often use two primary types of BOMs:

Manufacturing BOM (MBOM): A detailed list of components and assemblies needed for production.

Sales BOM (SBOM): A sales-focused breakdown that reflects what the customer is purchasing.

The issue arises when these two systems aren’t fully aligned. Sales teams may promise configurations that are difficult or costly to manufacture, leading to inefficiencies. A dual-BOM management system within CPQ helps address this issue by allowing both BOMs to be simultaneously updated during the configuration process.

By ensuring that sales teams and manufacturing are aligned from the get-go, dual-BOM management ensures that what is sold is not only feasible to produce but also optimized for manufacturing efficiency.

This synchronization eliminates the need for back-and-forth clarifications and significantly reduces errors. Manufacturers can benefit from faster production cycles and better customer satisfaction because what’s promised in the quote is exactly what gets delivered.

Integrating Data: ERP, CRM, and PLM Systems

One of the biggest challenges in manufacturing is that data often resides in silos. Your ERP system contains vital pricing and production data, while your CRM houses customer details and historical sales information. PLM systems (Product Lifecycle Management) also play a role by holding engineering and design data. The key to unlocking the true potential of CPQ lies in its ability to integrate these diverse systems into a single source of truth.

When a CPQ system pulls data from these platforms in real time, the quoting process becomes much faster and more accurate. There’s no need for manual data entry or updates. With everything centralized, your sales team can instantly access the most up-to-date product, pricing, and availability information, ensuring that each quote is based on the latest data.

For instance, imagine quoting for a custom crane. The CPQ system pulls updated part costs from the ERP, combines them with real-time customer data from the CRM, and checks design feasibility against the PLM.

This ensures the sales team can produce a highly accurate quote in just minutes, instead of spending hours manually compiling this data. Furthermore, automated data flow between these systems means fewer errors and faster approval times.

Automation and Efficiency: How CPQ Eliminates Errors

A key benefit of CPQ technology is its ability to automate repetitive tasks that would otherwise require manual intervention. This includes pulling in real-time pricing, updating configurations based on inventory levels, and generating accurate quotes automatically. This level of automation minimizes the risk of human error, particularly in environments with high product variance.

Automation is crucial when using a cost-plus pricing model (where prices are calculated based on the cost of materials plus a margin). By automating these calculations in CPQ, manufacturers can ensure consistent and transparent pricing across all quotes. The system takes into account real-time material costs and labor, removing the inconsistencies that can occur when these calculations are done manually.

Additionally, CPQ systems can manage complex rules and constraints based on the product's design and production limitations. This is particularly useful in industries that deal with custom configurations or high variance products, ensuring that every sales order aligns with what can feasibly be produced.

Self-Service Buying and Omnichannel Capabilities

As manufacturers move towards more customer-centric business models, self-service and omnichannel buying experiences are becoming increasingly important. CPQ enables customers to configure their products online, often in real time, without needing to go through lengthy consultations with a sales representative. This feature is invaluable in industries with highly configurable products, as it allows customers to explore different options, receive pricing information instantly, and make decisions faster.

In a self-service model, CPQ handles complex calculations behind the scenes, offering a user-friendly interface that allows customers to see their configuration options and visualize how changes impact pricing or delivery timelines. This significantly reduces the sales cycle and enhances the customer experience.

Omnichannel CPQ, on the other hand, ensures consistency across multiple sales channels—whether online, in-person, or through distributors. This way, customers get the same options and pricing, no matter how or where they choose to engage with your brand.

Tracking Success: CPQ KPIs and Metrics

A critical component of any CPQ system is the ability to measure and track performance through KPIs (Key Performance Indicators) and other metrics. Some of the most important CPQ metrics include:

Quote-to-order conversion rate: A higher conversion rate suggests that your CPQ system is accurately configuring and pricing products in a way that resonates with customers.

Quote accuracy: Tracking how often quotes lead to rework or amendments can provide insights into the efficiency of your pricing and configuration process.

Time to quote: One of the primary benefits of CPQ is reducing the time it takes to produce a quote. Monitoring this metric helps ensure that the system is performing as expected.

Tracking these metrics can help manufacturers refine their CPQ processes, identify bottlenecks, and continually improve their quoting strategies

For manufacturers dealing with complex products and configurations, CPQ is more than just a quoting tool—it’s a strategic asset that enhances efficiency, accuracy, and customer satisfaction. By integrating dual-BOM management, breaking down data silos, and automating key processes, CPQ allows companies to streamline their sales and production workflows while reducing errors and speeding up lead times.

If your business operates in a highly complex environment with multiple sales channels, implementing a robust CPQ system will likely be transformative. By improving how your sales, production, and engineering teams work together, you’ll be able to generate more accurate quotes, improve customer satisfaction, and, ultimately, drive higher profitability.