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CPQ as a cartoon

Posted On Saturday, June 15, 2019

Looking for a simple way to introduce CPQ. This video was made within 15 minutes.

Mass Customization - a brief history

Posted On Thursday, May 2, 2019

During the 1980-90’s manufacturers in the developed world were faced with saturated home markets and sophisticated customers. The markets were so large though, that they remained attractive to emerging competitors from developing countries, typically entering the market with low price and relatively unsophisticated products.
Many of the traditional manufacturers responded to this competition with the continuous-improvement school. In continuous improvement, the manufacturer drives the employees to find faster and more efficient methods to develop and make low-cost, defect free products to be able to deliver new products to the market quicker. This enabled mass producers to quickly respond to changing market preferences, and to continuously invent and use new technology.
These manufacturers were able to continually introduce new products with more features, increasing the variety offered to the customer. A new paradigm emerged from this – mass customization. According to the mass customization guru Pine, a mass customizer is a company that “develop, produce, market and distribute goods and services with such variety that nearly everyone finds exactly what they want at a price they can afford”.
However this move move to mass customization created conflicts in the different system that had been optimized for low cost and lean production with relatively low variety. Continuous improvement and mass customization require very different organisational structures, values, management roles and systems, learning methods, and ways of relating to customers. It also requires a completely different approach to product description as described above.
Despite the fact that so many companies are struggling with mass customization, most manufacturers are joining the quest. Mass customization offers a solution to the basic dilemma of whether to produce large volumes of standardized goods at a low cost or to decide to differentiated products in smaller volumes at a higher cost. The choice does not have to be made; a true mass customizer can be both a mass producer and an innovative specialty business.
CPQ in the era of Mass Customization
Mass customization requires a very different approach of selling products compared to traditional selling of standard products. The customers are offered a wide range of options of each product, and must be supported in the selection process. This site’s purpose is to look into the methods when implementing CPQ systems which are required when selling mass customized products.

A brief history of product description models

Posted On Wednesday, April 3, 2019

In the early days of manufacturing, products were not very complex and it was sufficient to provide a simple parts list, in order to define the product content. With time, the product complexity grew and the number of variants that some companies were offering the market increased; therefore product description models and tools had to be developed.

The next step in product description models was to introduce a hierarchical structure to the parts list to keep control over the evolving number of parts. But during the 70’s and 80’s products in some industries started having so many variants that it became too tedious to update each variant of each model as a separate hierarchical product structure. Companies started using labels to describe the usage of sub-assemblies that were alternatively used in different variants of the product.

In modern product description the whole structure is parametric hence configurable. The elements are abstract representations of design solutions and will only represent physical parts or assemblies when they are configured through assignment of values to the necessary parameters. The driver for the change from a parts hierarchy with variants to configurable structures is usually attributed to mass customization.

Configurator challenge

Posted On Friday, March 8, 2019

The configurator is one of the more difficult parts to evaluate in a CPQ-solution. The most straight forward way is probably to set up part of your real product rules in the CPQ system. However, this exercise is time consuming if you are evaluating multiple vendors. You are also likely to get questions from the vendors which in turn consume even more time.
It is not uncommon to try to solve this by instead giving the vendors a general problem and ask them to solve it. The travelling salesman problem is one typical example, however these problems tend to be completely unrealistic and have almost no relation to real configuration problems.
Below is an example of a configuration task that can show you how the configurator works. The main complexity with this challenge are all the ‘or’ statements which are very common product rules problems, but that are difficult to solve with a simple configurator.
Please contact us to get the expected results for the scenario.
Configuration task 1: 
  • A: integer between 1 and 5
  • B: integer between 1 and 5
  • C: integer between 1 and 5
  • D: integer between 1 and 5
  • E: integer between 1 and 3
  • F: integer between 1 and 9999
  • G: integer between 1 and 9999
  • H: integer between 1 and 20
  • Rule 1: A=2 requires D=4
  • Rule 2: B=1 requires (A=1 and E=1) or (A=2 and E=1)
  • Rule 3: C=1 requires (A=3 and B=2) or (A=4 and B=2)
  • Rule 4: C=2 requires (A=3 and B=2) or (A=4 and B=2)
  • Rule 5: C=3 requires (A=2 and B=1) or (A=3 and B=2)
  • Rule 6: C=4 requires B!=4
  • Rule 7: C=5 requires D=3 or D=4 or D=5
  • Rule 8: A=2 requires G=1 or G=2
  • Rule 9: D=3 requires F=3 or G=4
  • Rule 10: A >= F
  • Rule 11: E >= F + G
  • Rule 12: H = A * B

Publicly available B2B CPQ examples

Posted On Saturday, February 2, 2019

(updated 2020-06-24)

Configurators built using CPQ software :

ABB (Configit)
Aritco (Animech Technologies)
Bennington Marine (Verenia)
B├╝rkert (Tacton)
Demag (Camos)
Ebara (Intelliquip)
Festo (Camos)
Grundfos (Configit)
John Deere (Configit)
Lisec (Encoway)
Maxon motor (Camos)
Mercedes-Benz Trucks (CAS Software / SAP)
Oldcastle (KBMax)
Scania (Tacton)
Tuff Shed (KBMax)

Demos by vendors:

Bike/Lawn Mower/Etc (e-Con Solutions)
Elevator (Tacton)
Hearing Device (Configit)
Med-tech cart (Tacton)
Scissor lift/Cupboard/Etc (DriveWorks)
Truck (Tacton)

Notable configurators built in-house:

DAF Trucks
International Trucks
MAN Trucks
Montech AG
Renault Trucks
Siemens AG

Other configurators may be found in the configurator database, however most of them are very simple B2C (Business to Consumer) products.

Why is product configuration complex?

Posted On Thursday, January 17, 2019

In essence, a product configurator is only a bunch of selection menus that you need to keep track of to validate that it is technically correct solution. So why is it complex, and why do you need a tool for it?

The easiest way to explain this is to think of a typical configurator for a product. Imagine that our sales configurator has 25 questions, with an average of 10 answers to each question. This is a reasonably sized configurator, your product may very well have many more questions. So how many theoretical variants of the product do we have? To calculate this, you have to take the number of variants in question 1 which is 10, multiple by the number of variants in question 2 which is also 10, and keep on going...

So basically 10x10x10… until we get to 25 questions. So this gives us 10^25 number of solutions (that’s a 1 with 25 zeros).

This is a large number, but how large is it? Well, imagine we spend 1 millisecond (a thousand of a second) to analyze each potential solution just to make sure it is valid or not. Well, then we would spend the time equal to the age of our universe 10000 times (the age of the universe is about 10^21) to validate that our solution is correct.

So it becomes obvious we cannot analyze each solution in a configurator. We can cheat - and just try the configuration the sales rep put together and check that all rules are ok. But then we won't know if there are any better solutions out there.

Tacton uses a constraint-solving configuration engine, to try to do something smarter.

Contact us to find out what!
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