As PwC observed in a May 2024 study, the manufacturing industry is noticeably shifting. Today, a growing number of customers prefer tailored and customized products. To accommodate this change in consumer preferences, manufacturers have had to transition from the mass production model to one centered around customization. As a result, the study continued, a growing number of manufacturers are embracing the configure-to-order (CTO) or engineer-to-order (ETO) models.
While these models enable customers to flexibly customize their products, they are operationally taxing. Companies using the ETO model must manage complex products and coordinate with multiple stakeholders. They also face other challenges, including manual processes that result in longer lead times, inefficient change management causing costly reworks, and a high number of product tests due to the heavy customization. Fortunately, modern technologies and solutions exist to solve these challenges, including CAD-CPQ integration and PLM-ERP integration.
This article delves into how CAD-CPQ integration can support manufacturing companies as they embrace modern operational models to meet customers’ emerging needs. We will discuss the mechanics of this integration – including the solutions that provide this integration, the benefits of CAD-CPQ integration, real-world applications and success stories, its implementation, and much more. Let’s get started.
Table of Contents
The Mechanics of CAD-CPQ Integration
As with other software, the CAD-CPQ integration is aided by application programming interfaces (APIs) and integration connectors. But before detailing the mechanics of this integration, how about we first discuss what CPQ is?
What is CPQ?
Short for Configure Price Quote, CPQ software enables users – mostly companies – to configure products, calculate the prices of the configured products, and generate quotations of the fabricated products in a way that aligns with the requirements of their customers. It is intended to automate processes, preventing, at a very early stage, errors in the configuration, prices, and quotes. In fact, the software automatically applies pricing changes whenever you modify the configured product.
This ensures consistency and accuracy throughout the process, ultimately making prices and quotes more competitive. CPQ software is especially instrumental for ETO companies that receive a multitude of orders, some of which might include very complex products. This is because the solution enables them to deliver complex and distinctly designed parts and products in a standardized way.
CPQ software is primarily used by marketing and sales teams responsible for receiving customer orders and managing upselling. And given that the order must then reach the engineering and design team as well as other teams throughout the company for the design and manufacturing process to begin, there is a need to ensure the seamless flow of data.
This, therefore, means that CPQ, CAD (computer-aided design), PDM (product data management), ERP (engineering or enterprise resource planning), and CRM (customer relationship management) systems, which different departments within the organization use, must be connected. This connection between data systems and departments is known as the digital thread.
To create the digital thread, systems must be connected. At the foundational level, where customer orders must reach the design team, a CAD-CPQ integration must exist to ensure data flow and connectedness.
Need for CAD-CPQ Integration
In an ideal setup, the CAD-CPQ integration should enable ordering customers to work from a point of knowledge. This means that customers should be able to view the products they wish to customize. In this case, the CPQ software, linked to a CAD database, takes data from the available 2D drawings and 3D models and displays the product or products on a dedicated section of the CPQ interface.
Besides this capability, the interface should include tools that enable the customer to change various variables in a process known as configuration. Then, the solution should automatically calculate the cost based on the configuration and subsequently create a quote that considers all other manufacturing elements.
What you may find with pure CPQ software, however, is the lack of a section on the user interface that displays CAD data for better visualization. In other cases, you may be using software incapable of generating technical CAD drawings. Unfortunately, this means that customers create orders without a visual reference, which can lead to errors. It also means the company must have designers and engineers on standby to draw the products in CAD. The CAD-CPQ integration, therefore, solves these problems.
How CAD and CPQ Software Integrate
There are three ways of integrating CAD and CPQ software, namely:
- Application programming interface (API)
- Integration connector
- Plugins
Application Programming Interface
As we mentioned earlier, APIs power the CAD-CPQ integration. APIs provide a set of rules and definitions that enable information to flow between two applications. They offer access to the platform and its capabilities by creating a bridge to support communication.
To better understand how APIs enable CAD-CPQ integration, let’s take the example of Autodesk Platform Services(APS). APS comprises a growing set of APIs and services that power integrations, pre- and custom-built apps, and other innovative technologies.
Within the context of CAD-CPQ integration, these APIs enable developers of web-based CPQ software to embed the APS Viewer in a web page that then displays 2D and 3D views of designs on their website. However, the process is much more elaborate than this, as it follows several steps.
First, CAD designers upload product designs into the APS Design Automation API, which processes design files, generates drawings, and extracts data. Next, APS’s Model Derivative API takes over; it translates or converts designs into file formats that can be rendered in Viewer SDK, an Autodesk product.
The next step is the responsibility of the APS Viewer API, which renders the 3D models within the browser, enabling the end-user to view the various products. To improve the viewing experience, developers can use another API, the Data Management API, to create an app that enables the users to view all the products.
By harnessing the power of APS’s APIs to link CAD to their solutions, developers can build web-based CDQ software that can display 2D drawings and 3D models. As a result of this CAD-CDQ integration, ETO manufacturers can display their entire catalog on the web, showing their customers what to expect. The catalog offers templates (2D drawings or 3D models) for customers to customize their products with. Then, the CPQ software automatically calculates the price and generates the quote.
Integration Connectors
The integration connectors are the more popular method of integrating CAD and CPQ software and other software required to implement the digital thread. Unlike an API, which is a set of rules that act as a bridge through which information flows, connectors are pieces of software that allow two applications to connect and transfer data. Connectors are existing pieces of software, meaning they are pre-built and ship with pre-configured settings that enable the exchange of information right off the bat.
To facilitate the CAD-CPQ integration, CPQ software developers provide integration connectors to external CAD systems. These connectors link both software, facilitating certain requests such as the generation of CAD documents. CPQ software like Epicor CPQ, Cincom CPQ, Elfsquad, and more use integration connectors.
Elsquad CPQ Software Interface (source)
Plugins
Some standalone CPQ software includes plugins that add CAD features after installation. For instance, DriveWorks Ltd. develops a collection of downloadable plugins called PowerPacks for its software, DriveWorks Pro. These plugins can perform numerous tasks. However, we will focus on the SolidWorks PowerPack.
SolidWorks PowerPack adds tasks like exporting a drawing table, inserting a block in a drawing, opening and saving SolidWorks files, exporting files, and more. This means that the installation of this plugin integrates the DriveWorks CPQ with SolidWorks CAD software. This CPQ-CAD integration enables you to manipulate SolidWorks within the DriveWorks CPQ interface.
Impact of CAD-CPQ Integration by Industry
Implementing the digital thread through CAD-CPQ integration and other similar integrations has greatly benefited companies that employ the ETO strategy. This strategy is common in the construction of ships, machines, machine parts, buildings, and plants. Here, such companies design, engineer, fabricate, and assemble parts or products only after receiving the customer’s order.
However, while the ETO model is meant to produce unique parts or products with a low probability of reappearance, thus saving costs, it gives rise to several new challenges, as mentioned earlier. For instance, ordering customers may submit requirements that, by and large, complicate the designs. And if a flurry of customers makes such orders, the issue compounds even further.
Additionally, companies must coordinate with different suppliers and stakeholders to source parts that may not be in stock. What’s more, organizations that store technical, operational, and product information in siloed systems may also face delays and issues in accessing this vital data. And with having to conduct numerous tests to assess the performance and quality of the customized products, it is easy to see how this creates another issue.
The solution to these challenges lies in integrations that connect various software such as CAD, CPQ, PLM, ERP, PDM, and CRM. And as has been observed in practice, such integrations do offer various benefits, as detailed below.
Impact of CAD-CPQ Integration in Manufacturing Industry
The benefits of CAD-CPQ integration as it relates to the manufacturing industry include:
1. Increased Productivity and Collaboration
CPQ software integrates with CAD, PLM, CRM, and other enterprise solutions, seamlessly linking design, engineering, manufacturing, and sales teams. In this regard, the integration eliminates the fragmentation of teams, promoting data flow and collaboration. The result is high productivity, with DriveWorks Ltd., the developer of the DriveWorks, noting that manufacturers using the product have achieved a 75% increase in productivity.
2. Improved Quoting
CPQ software automatically generates quotes. In addition, by connecting to CAD and ERP software, CPQ solutions can easily generate technical drawing files and bill of materials (BOM), all with the click of a button. The BOM lists all parts, assemblies, subassemblies, and materials required to create the part. It shows, in a tabular format, what was used to generate the quote, lending even more credence to the total price.
This automated process takes only a fraction of the time it would take you to create the quote manually. In fact, DriveWorks notes that its CPQ achieves 95% faster quoting. Tacton, another CPQ provider, noted that companies that used its solution saw an 11% increase in the number of quotes per year. These companies also witnessed a +8% average win rate per quote.
Tacton’s Web-Based CPQ Software (source)
3. Time Savings
Codeo, a Turkey-based engineering firm that works with manufacturers that design and cell ETO products, notes that CAD-CPQ integration reduces the time it would take senior engineers to redesign customized versions of the same product. Codeo reports that tasks which previously took engineers 70 hours to complete manually now take only a few minutes. The time savings have also been experienced elsewhere, with Cadaq, a company that facilitates CPQ integrations, noting that its client now takes 2 hours to produce parts that would previously take 40 hours.
In addition to reducing the time it takes engineers to redesign parts, the CAD-CPQ integration also benefits the sales and marketing team. For its part, DriveWorks reports that its CPQ enables manufacturers to achieve 50% faster sales onboarding. Additionally, Tacton observed that the use of its CPQ software reduced by 34% the time sales personnel spent per quote. Similarly, Tacton CPQ reduced by 33% the time sales staff spent to revise quotes.
4. Improved Operations/Business Growth
The time savings translate to savings elsewhere, including on labor costs. It is little wonder, then, that DriveWorks reports that manufacturers achieved 64% business growth with its CPQ solution.
5. Enhanced Customer Experience
As detailed earlier, the CAD-CPQ integration enables customers to visualize whatever they are configuring. Additionally, the integrated interface guides the customers throughout the ordering process. These features improve the customer experience and reduce or eliminate errors.
Impact of CAD-CPQ Integration in Architecture and Construction Industry
Each construction project is unique. Whether it be a skyscraper, bridge, dam, or underground tunnel, the project will require the contractor and engineers to order custom structural components, glass facades, windows, steel frames, formworks, scaffoldings, and more. The impact of CAD-CPQ integration in the architecture and construction industry is similar to that experienced in manufacturing.
Behind the Scenes: The Tech Driving Integration
The success of a CAD-CPQ integration relies on a number of technologies, including cloud computing, artificial intelligence, and machine learning, just to mention a few.
Cloud Computing
Most CPQ software applications are cloud-based. These tools store data such as pricing, inventory, and sales in the cloud to improve consistency and speed of calculating prices and quoting. Cloud-based CPQ solutions make integrating with cloud-based CAD tools through APIs easy. Another advantage of cloud computing and cloud-based tools is that it ensures accessibility to customers.
Artificial Intelligence and Machine Learning
Just as AI is revolutionizing CAD, so is it changing CPQ as we know it. As it stands, the role of artificial intelligence and machine learning in the CPQ space is still nascent but is expected to play a more significant role in the future. For instance, CPQ developers hold that AI and ML will be able to recommend the best product configurations based on a large trove of data on past purchases, market trends, and customer purchases.
Additionally, AI models, trained on customer behavior, competitor pricing, and factors like supply and demand, will enable CPQ software to dynamically change pricing in real time. In this regard, AI will ensure that the adjusted prices reflect prevailing market conditions and the customer’s background. Simply put, this application of AI will help manufacturers maximize profitability without sacrificing their competitiveness.
Another avenue that is ripe for disruption within the CPQ space is in quoting. AI is poised to birth intelligent quoting by generating personalized quotes that align with each customer’s preferences and previous practices. Moreover, AI and ML are expected to boost the predictive analysis of sales, allowing manufacturers to identify future opportunities or orders. Based on this analysis, manufacturers can stock certain materials, buy specific CNC machines and manufacturing tools, or customize tools.
Evolving Customer and Market Demands
Admittedly, there has been a noticeable shift in the manufacturing industry. As a result, manufacturing companies are transitioning from certain traditional practices to new ones to accommodate their customers’ changing needs and demands. So, how is the current manufacturing landscape set up? And what is prompting companies to embrace CAD-CPQ integrations, among other essential enterprise solutions?
Growing Demand for Customization and Personalization
Now more than ever, manufacturers are moving away from mass production and embracing customization. This is a response to the changing preferences among customers looking for tailored products. To accommodate this shift, manufacturers have adopted ETO models and integrated solutions that support customization, including CAD-CPQ products. But the changing consumer demands extend beyond merely placing customized orders. Users have other requirements as well.
Sustainability Requirements
There is no question that customers are becoming more environmentally conscious. Their increased environmental awareness stems from the increasingly apparent effects of climate change. As such, consumers are avoiding practices that may increase pollution and instead embracing sustainability. Supporting or, in some cases, driving the shift to sustainability are regulations and legislation that compel companies and end-users to prioritize environmental and social responsibilities.
To align with the sustainability requirements as well as regulatory standards, manufacturers are adopting tools that help them calculate the impact of their products on the environment. Some of these tools are available in configurators. These configurators, which are part of some CPQ software like Tacton’s, enable manufacturers to integrate sustainability into both the sales process and manufacturing. This way, these companies can appeal to the environmentally conscious consumer.
Digitally Savvy Customers
The modern-day consumer has access to digital tools and is vastly adept at using them. And in an age where developers emphasize and market their solutions as the yardsticks of great user experiences, consumers have grown accustomed to such seamless experiences. Against this backdrop, manufacturers have to provide digital tools for configuring ETO products. They must also ensure these tools are responsive, intuitive, and equally available online.
In addition, manufacturers who embrace CAD-CPQ integration should always ensure their tools are available for customers to use 24/7. This requires selecting service providers who promise and deliver robust infrastructure for their online tools. The continued availability/uptime of such solutions guarantees that the customers continuously enjoy the perks of 3D visualization and the ability to generate CAD drawings within the CPQ interface, just as the CAD-CPQ integration envisions. It also accommodates the needs of the digitally savvy customer.
Conclusion
The future of manufacturing, at least based on customers’ changing preferences, lies in customization and engineer-to-order models. To meet the demands of customers and, as a result, maintain or boost profitability and competitiveness, manufacturers are integrating several technologies, one of which is the CAD-CPQ integration. This integration links CAD software to CPQ software. It enables customers to generate CAD drawings, visualize 2D and 3D models, and manipulate CAD software within the interface of the CPQ software as they configure their products. The CPQ software automatically calculates the price of the configured product and generates a quote.
This CAD-CPQ integration, which can be completed using APIs, integration connectors, and plugins, has benefited manufacturers and players in the architecture and construction industry. For instance, it has increased productivity, reduced lead time, improved operations, and enhanced the customer experience. As technology advances, developers expect to package additional capabilities into their software, increasing the benefits even further and meeting the ever-changing needs of the customers.
