Definition
CPQ (configure, price, quote) is software that automates generating a price and formal quote from a set of predefined configuration options, commonly used for products with a defined, limited range of variations. It contrasts with the custom quoting process a precision manufacturer typically needs for arbitrary, one-off part geometries, where pre-calculation from a drawing and routing replaces a fixed configuration menu.
Why CPQ doesn't map cleanly onto custom part manufacturing
CPQ works well when the space of possible products is limited and well-defined in advance; a precision manufacturer quoting arbitrary custom parts generally needs a different approach, since the 'configuration options' (the part's actual geometry and requirements) aren't a fixed menu.
Where CPQ applies (and doesn't)
Not applicable to individual custom parts; CPQ applies more to catalog-style products with defined configuration options than to arbitrary drawings.
Common mistakes
Assuming a CPQ system, built for configurable catalog products, can be directly repurposed for quoting arbitrary custom-machined parts without adaptation.
CPQ works well when the space of possible products is limited and well-defined in advance; a precision manufacturer quoting arbitrary custom parts generally needs a different approach, since the 'configuration options' (the part's actual geometry and requirements) aren't a fixed menu.
See how Blake reviews a partFrequently asked questions
Is CPQ the same as an RFQ process?
No, an RFQ is a customer's request for a quote on a specific need; CPQ is a system for generating quotes from predefined configuration options.
Does CPQ work for custom machined parts?
Not directly in most cases, since custom parts don't fit a fixed configuration menu the way catalog products do; specialized pre-calculation tools fill that role instead.
What kind of products suit CPQ well?
Products with a defined, limited range of variations, such as configurable equipment or standardized product lines.