To remain profitable, manufacturers must respond quickly to industry development, and bring goods and services to market faster than competitors. Delivering cutting-edge products to customers at the best prices faster than ever before while maintaining profitability is becoming increasingly difficult for industrial manufacturers.
A major challenge is that every customer wants a product that perfectly matches their own solutions; they demand options. At the same time, industrial manufacturers must meet these requirements and offer a wide range of choices to stay afloat.
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What are the advantages of implementing variant configuration for your business?
1. Configuration becomes fast and easy. Store materials, classes, characteristics, and rules for products on the back end and expose them through front-office applications so customers can interactively configure the products they need.
2. Prices consistency increased. Store prices, discounts, and pricing rules on the back end and share them through the pricing service with third-party front-office applications to ensure price consistency across systems.
3. Reduced time to market. This solution shortens the time from product concept to market launch, allowing the business to immediately respond to market changes and demands and stay ahead of the curve.
Model Once, Configure Anywhere with SAP LO-VC/AVC
Such a tool as SAP Variant Configuration and Pricing can allow interactive configuration, real-time pricing, guide settings, and guided product configuration, all of which can be easily included in customer or partner applications. By modeling once and establishing all the characteristics, values and constraints rules, technical and routing rules, you can receive numerous variants/product records in ERP. Meanwhile, ERP provides the ability to support configurable products in quoting, ordering, planning, engineering, production, procurement, and service.
SAP LO-VC variant configuration systems give:
1. Assistance in specification creation. It ensures that the product can be built according to the requirements. In addition, it provides information on whether the customer’s specifications can be covered from stock. Invalid configurations are prevented from ordering as the system monitors the selection process.
2. Prices for the configurated product. The whole value chain is easily priced and managed due to a single configuration and pricing system. With variant configurators the pricing process became much easier as quotas are calculated automatically based on product specifications as it also makes sure that products are created nearly at a standard cost.
3. All variants are covered. Using a configurable material allows you to cover all variants of a product without having to create separate materials for each variant. Creating a super-BOM and super-routing for this material will include all the components and operations for producing all variants.
For SAP LO-VC, the Product Master data can be transferred to any other solution, such as commerce, CPQ, etc., through the integration bus CPS, which includes Product and Pricing services, or through the BTP platform for AVC.
Integration of SAP CPQ with SAP LO-VC/AVC
Internal configuration processes are typically handled by engineering, to create BOMs, while external configuration – by sales, to create quotes for potential customers. Many software solutions can handle both CPQ and BOM configuration.
Let’s have a closer look at what benefits the integration of SAP CPQ with SAP LO-VC/AVC brings.
1. Enable sales to win faster in a business-friendly environment. The quicker products and services are brought to market, and properly tailored for each custumer, the quicker sales are realized. CPQ software creates quotes according to the set quantities, discounts, customizations, optional product features, and incompatibilities and in the end ensures faster sales cycles.
2. Leverage CPQ across multiple channels of customer interaction (commerce, sales, service) to increase revenue streams. CPQ helps to drive brand loyalty and customer retention by integrating data across sales channels.
3. Generate quotes in the front office with physical goods, complex services, warranties, consumption models, subscriptions and more. CPQ allows users to create highly customized quotes that are tailored to the customer’s requirements, ensuring accuracy and efficiency.
4. Connect the front and back-office new products faster. For manufacturers to be able to satisfy their customer needs, the front and back-office must work together in harmony. Smooth and well-coordinated work will allow customers to get the desired result the quickest way possible.
The Bottom Line
Even though the market poses new challenges for manufacturers every day, there is an effective solution to this problem – the use of systems with variant configuration. It allows to make product configuration and pricing easy, accurate, and efficient. Industrial manufacturers no longer need to manage complex product configuration across all their channels the way they did it before. SAP LO-VC and SAP CPQ can be used together to streamline sales processes and enhance customer experiences.