Driven by increasing market demand for highly personalized products, the need for manufacturers to leverage the full value of their data is greater than ever. Yet, producing smaller batches of non-standard, unique products is significantly more complex and requires data on-demand.
With the amount of information already being generated, collected and stored within their organizations, you’d expect industrial businesses to be well versed in unlocking and leveraging the value contained within their data.
However, that’s not the case – at least for large swathes of the manufacturing landscape. Traditionally, the data available to manufacturers was limited, manually gathered and stored in bespoke legacy systems or spreadsheets. This made the information time-consuming to access, difficult to consolidate and almost impossible to analyze in any great detail or depth.
The data was largely being used to perform tasks such as demand forecasting and production planning, and that’s not surprising. Accurate pricing, planning and forecasting are the Holy Trinity for most manufacturing organizations, allowing them to achieve a seamless end-to-end quote, order, engineering and production process.
“There’s no easy fix for years of poor or no data management and cleansing,” explains Jon Lidbury, director of EMEA for Configure One, a world-leader in CPQ software. “Tools such as a configure, price, quote (CPQ) solution enable a business to view the end-to-end process and implement best practices specifically when product portfolios change from standard to more personalized offerings.”
One of the consequences of not being able to view the end-to-end process is a tendency to misunderstand the true cost of manufacturing a product and subsequently pricing them to ensure the correct margins are achieved.
What many organizations lack is a system which defines costs and prices at a granular level, enabling sales teams and their managers to understand margins from the outset. In turn, this enables the management team to have a clear view of the product mix and the profit of each individual product or groups of products to determine their continued viability.
Configure One CPQ is such a system.
“Configure One CPQ provides a mechanism for sales information to be quickly and easily transformed into manufacturing data,” explains Jon.
“Bills of materials, routings, and production drawings can be generated and real-time visualization of these unique products enables 2D drawings and 3D models to be automated and immediately available to manufacturing. These outputs are available 24/7 and can even be shared with customers.”
Though the business benefits of CPQ systems have been proven, organizations are being hampered in their adoption by an over-reliance on Excel. Industry’s pervasive use of spreadsheets has been driven by the need for a ‘quick fix’ in the absence of a more controlled process and access to the right ‘tools’ for the job.
“Spreadsheets become the recognized process when used for several months to resolve, what is initially a departmental requirement or issue, but quickly turns into a company-wide process,” Jon notes.
“CPQ is a prime example of where manufacturing organizations initially consider a spreadsheet capable of solving a problem. As requirements become more complex and data needs to be more accessible throughout the organization, the use of spreadsheets becomes a bottleneck to the process due to the maintenance, shareability and complexity required.”
An over-reliance on spreadsheets is a very difficult habit to break and takes a concerted, top-down approach to overcome. So, what advice does Jon have for how businesses can successfully wean themselves off spreadsheets for the long-term?
“Defining the current state process, in terms of identifying people, processes and non-value-added tasks, is a good first step. This information can then be used to create a future state process identifying the importance of one source of the truth, ease of maintenance and the future business requirements.
“Most importantly, manufacturers must endeavor to embed a continuous improvement process and not allow non-validated systems like spreadsheets to come into use without proper consideration and validation.”
Originally posted by The Manufacturer