High manufacturing productivity levels are essential to achieving a competitive edge in the marketplace. High levels of productivity and efficiency translate to lower operational costs.
CPQ software offers numerous benefits for sales, finance, and procurement departments. This type of software can help ensure the accuracy of pricing information, streamline order processing, and prevent costly errors.
Streamlined Processes
With custom manufacturing becoming increasingly popular, streamlined quoting and ordering processes are vital. CPQ software for manufacturing allows your sales team to collaborate on quotes in real time and automates pricing mechanisms, increasing productivity and eliminating errors. Using a configurator, sales reps, and customers can design products with visuals, pricing, components, and specifications quickly and efficiently, eliminating back-and-forth conversations with engineering departments.
CPQ also helps eliminate pricing errors by connecting to your ERP system and providing accurate and up-to-date product, pricing, and inventory data. As users explore different configurations, the CPQ system automatically recalculates prices in real-time, considering factors like raw material costs, discounts, stock levels, and competitor pricing, minimizing margin erosion and rogue discounting.
The CPQ system can also design quotes, proposals, drawings, and CAD templates that align with your brand guidelines, saving your team valuable time. These digital documents are easily accessible by buyers, which increases sales efficiency and reduces friction between buyer and seller.
When implementing a CPQ solution, listening to and involving your sales representatives throughout the process is essential. This will allow you to identify potential resistance and address concerns before the rollout. Setting clear timelines and achievable milestones can cultivate a supportive environment, encouraging enthusiastic adoption of the new technology.
Reduced Errors
Manufacturing CPQ solutions automate the product configuration process, reducing manual errors from internal and external sources. It also reduces rework costs and other costs associated with inaccurate quotes or orders.
Whether it’s human error in compiling prices or miscommunication among sales teams, these errors can quickly add up and derail the entire estimation process. A CPQ solution eliminates the back-and-forth communication between teams that typically leads to errors and provides a precise digital thread that streamlines customer quoting and improves sales teams’ workflows.
Regarding pricing, CPQ solutions enable manufacturers to set pre-generated rule sets that are automatically applied when creating quotes. These rules can be based on factors including BOM characteristics, production costs, or optional features. This automation eliminates manual calculation errors often occurring when a quote is created by hand and allows for more precise pricing margin control.
Advanced CPQ software goes beyond simple configuration and quoting tools by offering features like 3D visualization capabilities, vendor and supplier integrations, real-time pricing/profitability estimates, and CAD automation to accelerate sales and manufacturing processes. These features allow sellers to create accurate product quotes that align with engineering standards, reducing the time to market and helping to drive growth. Moreover, manufacturing CPQ solutions can include guided selling or sales portals that offer customers tips or recommendation sequences for the best product options or cross-selling and upselling opportunities.
Boosted Customer Satisfaction
As a result of faster turnaround times and reduced human errors, sales teams can provide customers with accurate quotes. This creates a top-notch customer experience, which helps manufacturers build long-term loyalty and increase revenue.
CPQ software allows you to automate configuration, pricing, and quoting processes. It uses rules to determine an order’s price based on Bills of Materials, production costs, optional features, and other factors. This eliminates the manual process of calculating prices, which can be time-consuming and error-prone. Moreover, it maximizes profits by using market research to determine what customers are willing to pay for specific configurations.
The software can also integrate with CAD systems, supercharging engineering efficiency and eliminating common bottlenecks in the sales cycle. Besides, it can integrate with BI tools to analyze sales performance and product trends, which empowers the team to make informed business decisions.
Its self-service capabilities enable salespeople to efficiently guide their customers through the buying journey by providing them with tips, recommendations, and question sequences. It can even suggest upsell and cross-sell suggestions for better conversions. This significantly shortens the learning curve for new and less-experienced salespeople and enables them to deliver quality quotes on their first attempt. In addition, CPQ solutions can integrate with e-signature software to support digital signatures. This ensures that proposals are signed accurately and on time.
Increased Productivity
With CPQ software, companies can automate product configuration and generate quotes quickly. This helps streamline processes and eliminates manual errors. Ultimately, this increases productivity and improves the quality of quotes produced.
Implementing a CPQ system requires a lot of planning and time to get it right. Choosing the right team is vital to ensure success. Ideally, the team should include both regular employees and senior management. This way, the entire company can collaborate on a project that may impact their day-to-day work.
In addition, a CPQ implementation team should establish goals and metrics that will be used to measure progress and identify opportunities for improvement. This helps create a clear business case for the system and provides buy-in from regular employees. It is also essential to plan to address any concerns arising during the process.
While CPQ software can benefit businesses in any industry, it is precious for manufacturing companies that sell complex products. This technology helps to shorten sales cycles, maximize margins per sale, and deliver a consistent customer experience. In addition, CPQ software can offer a wide range of features that increase efficiency, such as guided selling, configurable pricing, and e-signature integration. It can also help to automate quote and contract generation.
