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The orchestration of CPQ and variant configuration

Customized products are already standard in many industries, and this is increasingly true in the B2B sector. Many vendors of CPQ solutions and variant configurations are competing for this growing market. But purchasing a software solution is not enough. A lean and efficient process from product configuration to delivery requires an orchestra of systems, rules, and interfaces to work together.

Let's start with the CPQ solution mentioned above.

Starten wir mit der erwähnten CPQ-Lösung. Denn dieses Werkzeug bildet das benutzerfreundliche Frontend für den Vertriebsmitarbeiter und den Endkunden. Wie der Name CPQ, das meint „Configure, Price, Quote“, schon sagt, kann sich der Anwender ein individuelles Produkt auf Basis der hinterlegten Regeln selbst konfigurieren und zusammenstellen. Tiefer gehendes Produktwissen muss der Nutzer nicht selbst mitbringen. Neben komplexen Regelwerken wie: „Wenn Komponente A mit Merkmal B kombiniert wird, dann ist Option C Pflicht und Option D optional, Option E und F gehen jedoch nicht“, führen auch vordefinierte Entscheidungspfade den Anwender Schritt für Schritt durch einen sinnvollen Konfigurationspfad. Der Preis der so entstandenen Produktvariante wird berechnet und ein individuelles Datenblatt erzeugt. Eine 3-D-Engine visualisiert das Ergebnis als fotorealistisches Rendering oder technisches CAD-Modell. Am Ende hält der Kunde sein Angebot in Händen und kann sogleich sein ganz individuelles Produkt bestellen.

Variant Management

The term Variant Management is used to describe methods and procedures that aim to find the optimal balance between the number of variants offered and the complexity of design, manufacturing, and procurement. The goal is to maximize the fulfillment of individual customer requirements while minimizing costs and maximizing scalability of operations.

So far, so good. What is interesting now, however, is what happens next:

Once the customer has ordered their custom configured product, this "unique manufacturing order" must go into production. For example, you may need to stock certain components for production, create a customized bill of materials, or create specific production instructions for people and machines. The same goes for quality control. These tasks and functions are not managed by the CPQ solution, but by the central enterprise resource planning system. A configurator front-end is not enough - the ERP system must also be able to handle configurations. This creates a paradoxical situation: complex rules must now be stored, linked, and coordinated in both worlds.

However, Product Information Management (PIM) and related tools still have a role to play in providing customers with important, common, and overarching product information throughout the customer journey. They inform the customer about the basic features and benefits of a product and initiate the purchase decision - until the "jump" into the CPQ system.

It goes without saying that the products must also be configurable and modular from a technical point of view. Therefore, the tools and systems of product development and design, i.e. PDM (Product Data Management), PLM (Product Lifecycle Management) and CAD (Computer Aided Design), are also involved in the successful realization of product configuration. After all, product development is always the source of all the rules that are later needed in CPQ and ERP. Product development also determines which variants are technically possible and feasible, and defines which components are required for which configurations. And it ensures that a visualization of the configuration can be generated with the corresponding 3-D and CAD models.

You see: Many different systems and specialist departments have to be interlinked so that individual product worlds can be created. Simply implementing a variant configuration system, i.e. a CPQ system, is not enough.

But how can this "Orchestra of Systems" be brought together into a harmonious sound?

Contact us to orchestrate your unique situation. We look forward to providing you with exciting insights into industry-specific features and best practices, as well as customized recommendations for your organization.

Senior Consultant Lucas Wehlmann

Want to learn more about holistic and customer-centric variant management, variant configuration, and CPQ - specific to your industry?

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