Manufacturing is on the cusp of a customization revolution. Product configuration–selecting features and components to align products with customer needs–is changing the game.
A one-size-fits-all approach to manufacturing is no longer enough. Customers increasingly demand personalized products that match their lifestyles, business needs, and preferences.
For manufacturers, this transition represents an exciting opportunity. Done right, configurable products offer a competitive edge and future-proof business models. The payoff? Customer loyalty, higher margins, and increased market share.
But product configuration also presents significant obstacles. Configurable products challenge manufacturing norms–from forecasting and sourcing to production workflows. It requires greater organizational agility and supply chain flexibility than ever before.
So, how–practically–can manufacturers transition to product configuration? The answer lies in digital transformation.
Configure, price, quote (CPQ) software, in particular, is transforming the product configuration process, enabling businesses to seize a competitive edge and tap into demand for customizable products.
Read on to learn how product configuration and CPQ technology can transform your manufacturing business for significant revenue growth.
Product Configuration: An Overview
Product configuration is the systematic process of selecting and assembling product features and components to meet specific desires and requirements.
One of the key trends driving the need for effective product configuration is mass customization, which is a pivotal evolution from mass production.
highlights the growing reality of mass customization, noting that over 50% of consumers in some categories are interested in purchasing customized products or services. And one in four consumers is willing to pay more for personalized products, underscoring the financial value of customization.
Similarly, a McKinsey report revealed that companies excelling in personalization can generate 40% more revenue than average performers. That same report found personalization is increasingly seen as a standard expectation, with 71% of consumers anticipating personalized interactions (and 76% frustrated when they don’t receive them!)
Bain & Company found
that while less than 10% of online shoppers tried customization options, 25% to 30% expressed interest. This shows an immense opportunity. Companies that become early adopters of customization can seize a competitive advantage.
Product Configuration by Industry
Product customization is transforming sales strategies, business models, and manufacturing processes across sectors.
As consumer demand for personalized products grows, companies are rethinking assembly lines to incorporate more configurable components.
The result? Everything from buildings to prosthetics can now be tailored to customers’ needs and preferences.
Some examples of configuration from Epicor CPQ customers comprendre:
- Merck Millipore: As a prominent player in the biotech sector, Merck Millipore offers a wide range of products, such as filtration systems and bioreactors. Configuration is paramount, allowing them to provide custom products, leading to better patient outcomes.
- Systèmes NanaWall: NanaWall Systems makes operable glass walls, offering architects and designers a versatile solution for creating unique living and working spaces.
- Xénith: Xenith is a leading provider of football helmets, non-tackle headgear, equipment, and apparel designed to elevate athletes' performance and safety. Configuration allows athletes and teams to personalize their gear to suit their specific preferences and playing styles, offering optimal protection on the field.
- Van Wijnen: Van Wijnen is a Dutch housing developer known for its commitment to innovation and sustainability in construction. Configuration is pivotal. It allows them to offer housing designs that align with each customer's vision and budget, along with (often confusing) regional regulations.
Challenges of Product Configuration
The promise of the product configuration model–more revenue, stronger customer loyalty, and increased market share–is undeniable.
However, offering configurable, personalized products challenges manufacturing processes, demanding forward-thinking technical innovation.
This section explores the critical challenges involved in making the leap:
Leveraging technology is crucial in this new manufacturing landscape.
From digital sales and design tools like CPQ (see next section) to advanced manufacturing technologies like 3D printing, having the right tech stack streamlines the customization process.
One of the trickiest aspects is keeping customization affordable. While customers value personalized products, they're still sensitive to price.
Manufacturers must find innovative ways to offer customization without a hefty price tag, which might involve optimizing production techniques or finding cost savings elsewhere in the supply chain.
Supply Chain Dynamics
Complex products require enhanced coordination and communication with suppliers. The key is ensuring that the right materials are available at the right time without inflating inventory costs or lead times.
Customer Engagement and Satisfaction
Engaging customers in the configuration process demands a streamlined and user-friendly approach.
Intuitive configurators that clearly communicate the added value of customized products are essential, as is managing expectations around potential longer lead times.
Companies must blend innovation with pragmatism to deliver personalized products that surpass customer expectations. The goal should be to provide customized options without compromising efficiency or cost-effectiveness.
CPQ as a Solution for Product Configuration
Configure, price, quote (CPQ) systems are advanced software solutions that streamline the product configuration process.
By integrating CPQ into their operations, businesses can start unlocking the potential of mass customization at scale.
Let’s break down the four key components of CPQ:
- Configuration: CPQ brings product customization to the table, allowing users to design products with specific parts, specifications, and requirements. The system's configuration tools are intuitive and adaptable. They can be applied to virtually any product, from huge buildings to tiny circuit boards.
- Prix: The system dynamically adapts pricing based on the user’s choices, guaranteeing that each selection accurately reflects current costs and market conditions.
- Citer: CPQ automatically generates detailed, brand-correct quotes with clear product descriptions and itemized costs. This minimizes errors and enhances the customer experience for quicker decision-making and improved conversions.
- Automatisation CAO: CPQ also generates CAD drawings, BOMs, and other files needed for production to begin.
In essence, CPQ systems make product configuration a breeze while supporting all downstream processes from sales to manufacturing.
The Benefits of CPQ in Product Configurations
Solutions CPQ are purpose-built to tackle the intricacies of configurable products head-on.
Powerful configuration engines tap into existing product data to define valid product options automatically, guiding customers to build out personalized specs. Integration with manufacturing processes, ERP, and CRM systems creates a seamless order-to-cash workflow.
Here’s how and why CPQ is the missing link for manufacturers aiming to offer configurable products:
Visual Product Configuration Brings Products to Life
Users configure products by interacting with a visual configurator. With every selection, the product evolves in 2D, 3D, augmented reality (AR), and virtual reality (VR).
This hands-on, visual experience enables true freedom of choice. Users can experiment freely while watching their product vision emerge. The instant renderings with each tweak give a deep sense of understanding and confidence about the purchase.
Immediacy is key. It allows users to feel connected to their design as it comes alive before their eyes.
Quoting at Lightning Speed
Imagine having all variables, such as pricing, components, and specifications, distilled into a precise, easy-to-understand quote in moments. That level of efficiency and clarity is exactly what CPQ software provides.
Greater speed keeps the excitement and momentum of the sale going, transforming interest into confirmed orders efficiently and precisely.
Empowering Sales with Confidence
CPQ empowers sales reps with guided selling features and scripts.
Salespeople can guide customers through the customization journey, suggesting add-ons, highlighting discounts, and helping navigate all available options.
This creates more meaningful interactions, focusing on crafting the perfect solution for each customer's unique needs.
Closing the Loop Between Teams
One of CPQ's standout features is its ability to bridge gaps between sales, engineering, and manufacturing teams. By automating the generation of essential production documents from the get-go, everyone is on the same page.
Connectivity ensures that what's promised to the customer can be delivered without a hitch, fostering a collaborative environment that's efficient and harmonious.
Enhancing Customer Relationships
CPQ is about more than just making sales. By providing a platform where customers can actively engage in creating their products, they become partners in the creative process.
This collaboration leads to profound customer satisfaction and loyalty as customers see their vision realized with precision and care.
Seamless integration with manufacturing execution systems (MES), CRM, ERP, and other enterprise software enables tightly woven workflows that support product configuration across all business operations.
Integration is vital for orchestrating the business-wide transformation required to offer product configuration, meaning your business can capitalize on its benefits and seize a competitive advantage.
The march towards customization in manufacturing is a strategic imperative for businesses aiming to stay relevant and competitive.
Product configurator software in the form of CPQ is at the center of this shift, offering a bridge between the demand for personalization and the operational reality of producing unique products for unique customers.
Product configuration has its challenges, from increased sales complexity to customer confusion. But with robust CPQ software, companies can simplify the process for sales reps and customers alike, allowing for greater customization and profit without sacrificing order accuracy or speed.
Product Configuration FAQ
How does configuration management integrate with product configuration software to streamline the creation of configured products?
Configuration management ensures consistency and accuracy in defining and applying the rules and constraints within product configuration software, facilitating the efficient design and production of configured products.
Can Salesforce CPQ enhance the configuration model businesses use, and how does it impact the sales team and customer service?
Salesforce CPQ can significantly enhance a business's configuration model by automating the quoting process, enabling the sales team to provide quick and accurate customer service, especially when dealing with complex product variants.
However, Salesforce CPQ lacks the visual product configuration functionality needed to visually interact with and customize products in real time. This gap can make it challenging for customers to fully understand the options available and how their choices affect the final product.
As a result, businesses might miss out on opportunities to increase engagement and satisfaction, particularly in sectors where aesthetics plays a crucial role in the purchasing decision.
What advantages does a 3D product configurator offer in visualizing product variants, and how does it support customer service?
A 3D product configurator is an immersive visualization tool that empowers customers to bring their unique product customizations to life. This innovative technology enables real-time rendering of thousands of possible product variants. Customers gain complete creative control to tailor products precisely to their needs and preferences.
The customer service department can harness these visualizations to better understand each customer's unique specifications, enabling more efficient and effective troubleshooting.
How do constraints in a product configuration model ensure the viability of product variants in manufacturing?
Constraints within a configuration model define allowable combinations and customizations, ensuring that product variants are manufacturable and meet quality standards, streamlining production processes.
What role does configuration software play in supporting a 3D configurator for an enhanced customization experience?
Configuration software is the backbone for a 3D configurator, managing data, rules, and constraints to ensure that the visual customizations are feasible and accurately reflect the available product variants.
How can businesses leverage product configuration software to improve offerings and meet diverse customer needs?
By utilizing product configuration software, businesses can offer a broader range of product variants through an intuitive customization process, meeting specific customer requirements and enhancing market competitiveness. Offering thousands of product variants without product configuration software is complex, expensive, and error-prone.
What challenges do companies face when implementing configuration management practices, and how does product configuration software help overcome these challenges?
Configuration management can be complex due to the need for detailed tracking of all product variants and customizations. Product configuration software simplifies this process by automating monitoring and ensuring consistency across all product development and manufacturing stages.