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The Promise of CPQ for Precast
By Joshua Myers, VP of Engineering, Jensen Precast
Construction companies use precast concrete to build bridges, tunnels, and highways above ground and sewer, stormwater, and drainage systems underground. Cast into standard and custom forms, then delivered ready to install at job sites, precast concrete products offer reliable quality, rapid project completion, cost control, and onsite resource efficiencies.
Until recently, engineering, manufacturing, pricing, and inventorying of precast concrete products have lacked the same efficiencies of their many uses. Prices might vary depending on manufacturing locations, customer expectations, and contracted timelines. Engineering resources might spend time meticulously specifying product bids only to lose out to competitors with entirely different solutions. Precaster has inventory sitting at various manufacturing locations and does not connect the dots for delivering sizeable products to meet customer demands at nearby project sites.
The design, engineering, manufacturing, and delivery continuum of precast concrete can take months to realize. Timing everything to land on deadline requires masterful foresight and may send costs soaring when expectations fall short. The alternative method of concrete cast in place at a job site can mean longer lag times in constructing wooden frames to form poured concrete and more resource costs to carry out key tasks on schedule. Cast in place can also be ineffective for hard to reach installations as well as sites with tight spacing demands.
Configure Price Quote (CPQ) software may offer a way to advance the precast concrete industry by accelerating the order to delivery time.
What are the primary focus areas for considering a CPQ solution? First, let’s look at obstacles the industry is trying to overcome. The main challenges for a lot of precast concrete companies today can be summarized into three key areas.
For many businesses, the sales team is quoting products before the engineering team designs them. This incongruency can lead to pricing that repeatedly misses the mark.
The near-impossible task of pre-engineering all permutations of Configure to Order (CTO) and Engineer to Order (ETO) concrete products usually means more customization, which means more time and more costs for manufacturers and their customers.
Until recently engineering, manufacturing, pricing, and inventorying of precast concrete products has lacked the same efficiencies of their many uses
An inability to keep up with market demand for custom products can impact potential manufacturer revenue. If every major job requires customized products, marshalling the resources to deliver incoming orders on schedule may be cost prohibitive.
These types of challenges may result in and are compounded by too many customer communication loops. Given the high stakes of indeterminate profit margins, deadline driven contracts, and time-sensitive outcomes, these obstacles can be frustrating on both sides of the business-customer relationship.
A measured and integrated approach to the CPQ process offers the promise of aligning disparate team goals into a streamlined business process where everyone is literally on the same page via data-driven software configurations shared alongside the design-bid-build customer product journey. More value is added when pivotal decisions made throughout the project stream are communicated and not lost in later stages.
Overall the solutions can be summarized into three key areas.
To reign in incongruent pricing from sales and engineering, CPQ could enable a stronger price offering upfront to customers with minimal adjustments for sales oversights and lack of expertise with engineering specifications.
There will always be a need for customized, precast concrete products. CPQ can position businesses to prime the pump by shortening the order to fulfilment cycle time. Providing design, engineering, and manufacturing data up front should result in fewer feedback loops. This benefit is especially important to sync complex government agency requirements with the varied job site and loading conditions that precast concrete products address.
When integrated with suitable enterprise resource planning (ERP) and customer relationship management (CRM) tools, CPQ can generate complex pricing scenarios like the volume of concrete + steel + labour estimates. In addition, the software handily supports pricing in ETO use cases.
The potential to cover pricing for a broad spectrum of use cases makes CPQ an attractive choice for the industry. Real-time visual product feedback for sales teams can enable easier customer engagement and more accurate outcomes for builders and precast concrete manufacturers alike.
Taking on a CPQ solution can be a significant undertaking and not an inexpensive venture. For the precast concrete industry to better serve the engineers, contractors, and owners, who drive the industry forward, leveraging technology is paramount for staying in step with inevitable future leaps.
For the industry to progress, businesses must constantly drive more accuracy. Pricing products with ETO in the loop can move enterprises closer to fulfilling customer needs without breaking the bank. Greater accuracy via a CPQ solution offers the potential for moving everyone closer to the goal.
Reducing the needs analysis and product selection workload for precast concrete engineering teams would make things simpler. Spending less time specifying projects, coupled with more exact price points by sales teams, would allow engineers to focus efforts on advancing product features and future offerings.
Putting standard, CTO, and ETO product solutions in the hands of sales team members and eventually at the fingertips of customers empower everyone. Technology foremost has helped turn decision making from a specialized practice into a universal experience. Think of WordPress. Think Shopify. For the precast concrete industry to gain from this type of WYSIWYG transformation, it will need to re-engineer how it constructs the business.