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CPQ for the Truck Industry

Posted On Thursday, October 1, 2020

What's unique about sales and product configuration in the heavy vehicles manufacturing industry (or in other words - CPQ for truck manufacturers)?


I might be the person that has analyzed and spoken to the most truck manufacturers in the world in relation to CPQ. I've met 7 out of the 10 largest truck corporations in the world.  

I thought I might summarize the unique requirements of this industry:

Legacy

All truck manufacturers are heavy users of (semi-)old legacy systems. They have all been configuring their products since the 80-ies or 90-ies. This means that whatever system (and specifically CPQ) you introduce - it needs to be heavily adjusted to fit into the existing system landscape. Many of these systems are very specialized - and sometimes uniquely built for the manufacturers. Since they often old, good APIs may be missing. 


Systemized BOM usage
It's quite common generally in the manufacturing industry to separate Engineering BOMs from Manufacturing BOMs. It's also getting common to introduce a Service BOM. Since truck companies have been working with configurable products for so many years - they've systemized the usage of multiple BOMs. 

One thing that most truck manufacturers use is the concept of a Sales BOM (they might call it something else like 'Variant Codes'). The idea is to separate the 'As-sold' BOM from the 'As-delivered' BOM. This also separates engineering updates of BOM-items from Sales. So only when an engineering updates actually changes the function the customer receives - that's the Sales BOM item is updated. This decreases the need of maintenance of CPQ during the product lifecycle. 

Localized needs
The needs of the customers differ quite a bit between markets, due environmental, regulatory or cultural reasons. 

Local market offices has a big influence on all the three letters of CPQ (configuration logic, how to price the product and the look-and-feel of the quotes). 

This means that the global configuration needs to be flavoured differently for each market - with market unique defaults and optimizations. Local accessories may be needed in addition to be included in the CPQ.

Body builder integration
A truck is nothing without it's body. And body builders are usually local, specialized and (most often) small companies. Ideally, the customer should be able to configure the vehicle and the body in one CPQ - but that requires a tighter co-operation between the two types of manufacturers. 

As a bare minimum the CPQ needs to allow for sharing CAD-drawings for the body builder before the truck is actually built. An easy workaround is of course to limit the configurability - and use semi-standardized drawings - but that limits the sales. Note that this does not only apply to mechanical CAD, but also circuit diagrams etc. 

Calculations
There are a number of calculations that need to be done as a part of the sales configuration (e.g. turning radius, weight distribution per axle, powertrain optmization). Some of these calculations are simulations. 

Let's take the powertrain optimization: the optimal combination of engine, gearbox and axle gears for a specific usage of the vehicle can't really be configured. Essentially you have to use heuristic rules to find the most likely good combinations - and then run an external simulation of the combinations. This means that the CPQ has to be 'open' for including these calculations - during runtime. 

Complex Configuration
A truck consists of a large number of configurable options (500+), and each option can consist of many alternatives (20+). This means that the theoretical number of configurations is even larger than the most complex configurations. 

Most manufacturers solve this by creating 'sub-models' - a sub-set of the product which they let their sales reps offer. However, one big issue with this approach is that quite often neither the customer or sales rep know exactly which model is the optimal one. 

Traditional guided selling just doesn't do the trick - because you might not be able to know the best model until you're halfway through the configuration. The trick here is to let the user configure the whole product family at the same time - and let the configurator help the user find the optimal solution - not necessarily a predefined model. 

Summary
There are a lot of unique complexities in CPQ for the truck industry. Some you might recognize from your industry even if you're now working with trucks. 

If you need help with CPQ - you know who to contact!


cpqbot - cpqbot.se

Posted On Saturday, September 26, 2020


cpqbot is an automation tool for Tacton CPQ.

cpqbot automates the creation of models, pricelists and document templates.

cpqbot helps you integrate external data from CRM, PLM, ERP into your cpq-logic and thereby increases quality and accuracy to keep your business in sync.

cpqbot is a cloud based robot that helps you do the things efficient and with high quality. It also extends the functionality of Tacton CPQ with functions such as PIM, CMS and system configuration.

cpqbot helps you focus on your business while the robot takes care of your daily routine.


Contact us and we can tell you more. Use the contact form or call us at +46 762 09 85 57.

Is sales ready?

Posted On Thursday, June 11, 2020




Customer often ask us if we think their company is ready to digitalize sales. It’s a fair question and the answer is almost always yes. For the company it’s simple, if we don’t digitalize our sales our competitors will.

When your competitors start using digital tools for selling their products it has been proven to have a great impact. When things that previously took months now can be done in days and when days can turn into minutes, that’s when it will get very difficult to compete. If you’re the one still doing old-school, that is.

The question I often ask is not if the company is ready. Normally production is all in for doing things in a structured and well thought out way. They’ve been doing it that way for centuries by now.

Product development have also learned to use new tools, both to revolutionize the way things are calculated and optimized for better utilization and environmental impact.

But there is one department that often is two steps behind. Sure, they’ve got fancy gadgets and they’ve all learned to master tools like Power point, Word and e-mail. They have often been forced into some kind of CRM-system to align with the tracking and the forecasting.

When it comes to selling products, it’s often a completely different story.

Some manufacturers still believe that selling exactly what the customer is asking for is the way forward. The guys in production knows the problem this creates, the girls in product development know all to well how this turns the job more into firefighting more than anything else.

But sales is often ok with doing what’s really bad for the company. They'll often prefer to keep doing it wrong.

Therefore, it’s time to get the act together and understand the difference between what you COULD sell and what you really SHOULD sell. There's a big difference, both in practice and when it comes to bottom line profit.

Digital tools (and in this case I’m particularly taking about CPQ) will draw a very defined line between good and bad when it comes to customer offerings. As I said in the beginning, this is an easy decision for the company. But is sales really ready for this?

If your sales reps still think that full flexibility is the only way the product can be sold, then maybe CPQ is not for you. If you can’t accept that some proposals should never see the light of day, then digitization may not be for you.

So, my advice is for companies that think digital presence is essential in these times is very simple:

First of all, you need to make sure your sales department is ready to do thing right.

If not, leave it to your competitor. To find new ways into the future.


Tom

Posted On Monday, November 25, 2019



The effort and cost of implementing CPQ is driven mostly by the quality of the documentation of your product. And let’s be honest – your product is not well documented.

So, is everything hopeless? No, because your company probably has a “Tom”. Who is Tom you might say? Let me tell you a short story.

One of my first projects at Tacton was with a company that produces really big machines, we’re talking €5,000,000 and 10,000 options big. When planning the project, the project manager sketched a project plan where the whole configuration model was supposed to be finished in three months. I tried to convince him that this was completely unrealistic, especially considering the team consisted of 3 people, the experienced product expert, me and a junior modeler. I did not convince him, and instead got ready for a tough project.

I clearly remember one of the first days of the project, when we were working on some oil tanks that the big machine needed. I asked the product expert about which oil tanks were available, and what the rules were: “Yes, they’re right here in a special Excel sheet I have in my laptop, and the rules are in my head”.

The product expert was a man in his early sixties that had been with the company for over thirty years. He knew everything about these big machines. He knew all the options, all the sales reps; and in practice, most important quotes passed by him before being sent to their customers. His name was Tom.

We did finish the project in three months – and it was entirely due to Tom. Not only because he knew everything, but also due to the internal political strength of Tom. If Tom said that the company should not sell customized electrical cabinets – well, then it was a decision. No design by committee, no delayed decisions.

I bet you have your own Tom in your company. Take care of him or her. But watch out, the ‘Toms’ are usually ready to retire within a few years. Are you prepared for what happens when he or she does?

Maybe it’s time to contact us at cpq.se to document all this knowledge in a CPQ tool? You’ll get a smoother and more efficient sales process as a nice bonus.

Note: Tom’s real name is something else (he might even be a woman).


Tacton CPQ with online CAD Automation

Posted On Friday, November 8, 2019


A common request from our customers is a simple visualization of their products. They're not looking for:

- An exact CAD-drawing, because that can mean that their customer can copy the product and get it produced cheaper

- A fully fledged visualization with perfect surfaces, because they understand the challenge of setting up and maintaining this over time.

Our customers are looking for something in between,  let's call it 'sales CAD'!

We decided to investigate the market for this type of product and found Dynamaker. Dynamaker calls themselves Online CAD for Mass Customization.

We decided to set up a demo together, and selected a electrical cabinet as an example. The electrical cabinet configuration problem is a classic in the CPQ-world. It's really challenging as it's essentially a 'Bin packing problem'. This means that you shouldn't try to solve it optimally, as it may take an eternity. So we're using a smart(er) version of the 'first fit algoritm'.

One of the key take-aways from setting up a demo together, is how easy both Dynamaker and Tacton are to integrate to. Tacton has ready-made functionality to allow external (visualization) windows in the tool, and to send messages to the visualization. Dynamaker in turn can easily pick up messages from external configurators and feed them to their online CAD. We essentially had a simple version up and running within less than 2 hours.




I think the integration of the tools is really cool, taking the best of both worlds. Don't hesitate to reach out to us, if you would like a demo of the combined solution!

CPQ Partner meetup


The partner network for CPQ and especially Tacton CPQ is expanding in the Nordics. Yesterday we had a first meetup in Uppsala, organized by cpq.se and hosted by Sisyfos Digital.

We started out with a short introduction of all attendants. There were six companies joining during the day.

CPQ Finland - CPQ implementation in Finland with extensive knowledge in PLM.

Cloud Exponent - 20+ Tacton experience with focus on business transformation and expert on SalesForce integrations

Metro Communications - Microsoft partner in the UK with long Tacton experience now focusing on cloud solutions including Microsoft Dynamics

OMT - Business engineering with 50 years combined experience within their CPQ consulting team

Sisyfos Digital - working with digitalization and PIM (and my favorite Uppsala consulting firm)

cpq.se - that's us. Tacton CPQ re-seller in the extended Nordics and CPQ expert consulting.





The purpose of the day was to bring together some of the people that have reached out to myself and Patrik over the last months. We started out with speed-dating, but quickly realized it was more of ex-on-the-beach.

Many of us knew each other from previous endeavors, but there were sure new faces to be introduced as well as new collaborations to be investigated.
Today’s topic - How to present CPQ

The topic for the day was sales and the second session focused on a meta-presentation how we at cpq.se present the concept of CPQ, challenges for our customer, value delivered, quick demo and subscription fees. The presentation ends with a proposed next step.

Next thing, after some traditional Swedish fika, was for every company to present their take on the CPQ sales pitch. After a few minutes of preparation each company presented their view of how to present CPQ to their customers.

With all the expertise in the room there was a very good discussion on how each and everyone of us could improve and optimize the pitch.

The afternoon went by really fast and we finished of the day with a visit to my favorite local brewery in Uppsala. During the evening we were joined by some old friends from Tacton. The picture above was taken by our guide Colin when we had a first ever taste of the upcoming collaboration between Uppsala Brygghus and Edge Brewing.

A very inspiring day. We will definitely meet-up again to discuss opportunities and challenges in the CPQ business.
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