CPQ Goes Retail, Mass Customization Goes Mainstream
March 6, 2019
CPQ has gone retail. It is not enough that Amazon is offering shoppers same day delivery for a hundreds of thousands of items. Shoppers today expect companies to meet their every need and request in real-time. For most companies this poses a challenge.
Every option, every choice adds to the burden on both the retailer and the manufacturer. Traditionally, more choices lead to more inventory. More inventory leads to more parts and more variability in what has to be manufactured. More variability equals more mistakes, more errors and more dissatisfaction from the customers you are trying to please.
Enter Home Depot and TuffShed. These partners have developed a way to bring mass customization to market with the flexibility and personalization of custom-made products with the low unit costs associated with mass production. Every Home Depot customer can order a shed based on their every desire. Tuff Shed fulfills these requests through customer-driven visual configuration that drives all the way to the shop floor… down to the last drawing, 2×4, and finishing nail. Each time a customer is selecting an option the plans, drawings, bill of materials and pricing are updated in real-time behind the scenes using KBMax.
Customers get what they want. Home Depot delivers a personalized, quality product without the need for dedicated specialists. Tuff Shed delivers it with fewer resources, fewer mistakes, and more customer satisfaction. After all – the customer has seen what they are ordering at each step in the configuration process. The shed matches their preferences, their choices, their selections – because they have selected them all… and visually reviewed them at each step in the process.
Visual Configuration is not limited to sheds though, and I doubt you will find a Caterpillar D6 Bulldozer at Home Depot anytime soon. That said, Caterpillar has launched a marketing campaign around a new electric drive dozer (YES! Tesla meets dirt moving) leveraging visual Configuration. While Caterpillar is not going to be selling bulldozers with flames and racing stripes anytime soon, it will let you walk through a self-guided configuration and tour to build out your own personalized Dream Dozer.
The same tools and technology that allow a user to build out the shed of their choosing, allow them to select and configure real options on a newly launched D6 Bulldozer platform. Dealers and customers both have the opportunity to learn about a brand new technology, configure options to their liking and have fun doing it.
These are just two examples of how CPQ and mass customization are combining to change the marketplace. Traditional CPQ (Configure Price Quote) tools are built for business… more attune to cash registers and order forms than personalized, guided selling. Traditional CPQ systems also stop at the sales BOM (the list of items that a sales rep puts on an order form). Tuff Shed is a great example of how the next generation of CPQ tools can provide a consumer friendly interface for buying all the way through the manufacturing BOMs and engineering drawings. This has always been the dream of mass customization. The simple, easy, and flawless custom production of a unit of 1.
Kevin has over two decades of experience helping customers transform their manufacturing, product development, and sales.