CPQ stands for “configure, price, quote” which is software meant to expedite the quote to cash process. CPQ software allows companies to digitally configure their product and service options. This allows customers the ease of configuring products to their liking and receiving an exact quote. Lean manufacturing is a production method aimed at maximizing productivity while minimizing waste within the manufacturing operation. When CPQ software is integrated within the shopfloor, achieving lean manufacturing goals becomes easier because CPQ tackles areas of waste to increase sales.
Eight areas of waste
Waste is categorized as any action or step that is nonvalue adding within the operations cycle. Lean manufacturing pinpoints the eight areas of waste
- Defects: errors caused by scrap, rework, and incorrect information
- Overproduction: producing more goods than needed
- Waiting: wasted time in between steps of a process
- Non-Utilized Talent: not taking advantage of staff’s talent and knowledge
- Transportation: unnecessary movement of materials, products, personnel, and data
- Inventory: excess materials not being processed
- Motion: unnecessary movement of people
- Extra-Processing: performing any activity that is not necessary
#1: Increase mobility
CPQ expands the mobility of a sales representative, by eliminating the restrictions of an office. When CPQ software is made available on laptops, tablets, or phones it empowers a sales team to do more field sales. The sales team can now configure items and accurately quote prices no matter where the customer is.
#2: Reduce wait times
CPQ software reduces wait times for customers and sales representatives. Customers no longer need to wait for a salesperson to crunch the numbers and quote them a price because CPQ does it accurately and in real-time. On the sales side, when prices are updated there’s no need for manual changes because the software is globally updated in real-time. These updates include new pricing, products, and availability.
#3: Eliminate defects
Sales reps can only be as accurate as the information they are provided with. Prior to having CPQ software, sales teams were tasked with considering the price, product availability, delivery times, and configuration possibilities of products. This left room for unimaginable error. With CPQ software scrap, rework, and defects are practically eliminated. CPQ has rules that limit certain permutations of products, update inventory in real-time, and supply accurate delivery windows. This allows their systems to be up to date and ready for use.
#4: Decrease overproduction
A large waste of resources occurs when products are overproduced and not moving through the operations cycle quickly. When CPQ software is integrated with manufacturing processing software it allows two systems to be in constant communication. The CPQ software is communicating to sales reps when items are unavailable. In addition, the software lets the manufacturing plant know when orders have been paid for and are ready for processing.
Infor CPQ is a visual, rules-based configurator software that accelerates product configuration, pricing, and quoting. At ISE we offer this product which can be integrated with a company’s enterprise resource planning (ERP) system to ensure real-time communication between the two software. Our team can work with you to identify key aspects of this tool quickly, to identify how we can streamline quoting processes, improve accuracy, and leverage state-of-the-art visualization tools to greatly enhance your customers' and prospects' buying experience.
CPQ is a modern sales experience, tailored to your customers and designed by your customers. The software encompasses many of the key components of lean manufacturing, to help organizations reduce waste and improve efficiency. Integrating CPQ software into your operational processes ensures your company is customer-centered and value-driven.
Interested in getting started? Please contact us here and one of our highly experienced consultants would be happy to assist.