CPQ for manufacturing: configure, price, draw and approve
CPQ software (configure, price, quote) turns a customer’s options into a priced quote. In a plant that sells configured products, a version of it already runs. It is an Excel builder that holds the rules, plus a drafter who turns each order into a drawing. This guide walks through the four steps and what each one reads from your records. It ends with the questions to put to any CPQ vendor.
What CPQ means in a plant that builds to order
CPQ stands for configure, price, quote. The term comes from sales software, where a CPQ tool helps a sales rep choose products, apply discounts and produce a quote document. Most of those tools were built for companies that sell subscriptions or catalogue items, so the rules they handle are commercial: bundles, discounts and approvals. What is CPQ covers the general meaning of the term.
CPQ for manufacturing is a different job. The product changes with every order, so configuring it is engineering work. The price depends on what the configured product costs to make. The quote often needs a drawing, because the customer checks the fit before ordering.
The plants that need it sell a product family in many sizes and options. Think of a conveyor section, a machine guard, an electrical enclosure or an equipment skid. Each order is a new combination of options the plant engineered once. When an order needs new engineering, it moves toward engineer to order. A shop that quotes parts from the customer’s own drawings has a different problem, covered in manufacturing quoting software.
The CPQ you already run
A plant like that already has CPQ, even if nobody calls it that. The configure and price steps live in an Excel builder. It is a workbook with option lists, lookup tables and formula chains that turn the customer’s choices into sizes, parts and a price. The quote step is a document template and an email. The drawing comes from a drafter who opens the last similar job and changes it.
That setup works, and its rules have been tested on years of real orders. Its weak points are easy to name:
- One or two people understand the builder, and quotes wait when they are away.
- Copies of the workbook drift apart on different laptops.
- The costs inside it were typed in when a formula was written, and they do not move when material prices do.
- Each quote drawing is redrawn by hand, so the drafter becomes the queue.
- Nothing records which version of the rules produced which quote.
Replacing the builder with a CPQ platform usually means rewriting every rule in the vendor’s editor. Building from the builder keeps the rules that already work, and the new tool takes care of the weak points listed above.
The four steps, and what each one reads
A manufacturing CPQ runs four steps on every order. Each step reads different records, and each one can be checked on its own.
| Step | What it reads | What it produces |
|---|---|---|
| Configure | The builder’s option lists, constraints and lookup tables | A valid configuration, or a refusal with the reason |
| Price | Material prices from recent invoices, routings, labour and machine rates, and the markup method | A price with each line traced to a cost |
| Draw | Your model template, your drawing template and your standard parts library | A 3D model and a general arrangement drawing for this order |
| Approve | The quote package and your approval rules | An approved quote, logged with the name of the person who approved it |
Where AI does the work, and where it does not
AI is useful in a manufacturing CPQ where the work is reading and writing. It is not where the price or a dimension comes from.
- Reading the builder. A model can read a workbook formula by formula and draft the rule map: each input, each table and what each formula chain drives. An engineer checks the map before any rule is used.
- Reading the request. Customers send emails, specifications and marked-up drawings. A model can draft the configuration from them, and the sales engineer confirms each option.
- Writing the quote. The cover letter, the scope notes and the exclusions follow from the configuration, and a model drafts them for review.
- Checking the package. A model can compare the drawing’s title block, the bill of materials and the price lines with the configuration, and flag what does not match.
The price comes from rules and costs that a person can open. The geometry comes from your own parametric template, rebuilt by the CAD system. A language model proposes options and drafts text, and never sets a dimension someone will cut to. That keeps every number on the quote traceable to a rule or a record, which is what a named approver needs to sign it.
Pricing from your own costs
A builder usually prices from numbers typed into it years ago. A manufacturing CPQ should price from the records that change. Material comes at the price on recent supplier invoices, hours come from your routings or job history, and your labour and machine rates apply. The markup method stays yours, whether it is a percentage by family, a price ladder or a floor price.
Every option should show its own effect on the price. A sales engineer who can see that one option adds a drive, a guard and an hour of assembly can explain the price to the customer.
When a cost is missing, the configurator should refuse to price the line and name the missing record. A zero that looks like a price is how a quote goes out under cost. Costing software for manufacturing covers where each cost term comes from. Rebuilding a quoting estate from raw tables covers how to check a rebuilt price against the builder’s own arithmetic.
The drawing that goes out with the quote
For equipment, the customer reads the drawing before the price. They check the footprint, the heights and the connection points against their site. That drawing is usually a general arrangement drawing, and each configuration needs its own.
Generating it needs a parametric model of the product family and a drawing template linked to it. The configuration sets the model’s dimensions and picks its standard parts, the model rebuilds, and the drawing follows. Design automation tools such as DriveWorks and Tacton already generate models and drawings from rules written in their own editors. The difference here is where the rules come from: the builder your team already trusts.
Kinds of CPQ software for manufacturers
CPQ software for manufacturing comes in a few shapes. They differ mostly in where the rules live and in what comes out at the end.
| Kind | Where the rules live | What comes out | Examples |
|---|---|---|---|
| CPQ with CAD automation | In the vendor’s rule editor, linked to your CAD system | A price, a bill of materials, a 3D model and drawings | Tacton, DriveWorks, Epicor CPQ, Configure One and Elfsquad |
| Sales CPQ | In the CRM, as products, price books and discount rules | A priced quote document | Salesforce Revenue Cloud, Oracle CPQ, Conga and DealHub |
| Configuration engines | In an engine that other systems call | Valid configurations for a CPQ, a store or a portal | ServiceNow CPQ, formerly Logik.ai |
| Visual configurators | In the vendor’s product model | A 3D or augmented reality view and a price | Threekit |
| A module on your own data | In your builder’s rules, kept in your own workspace | A price from your costs, a model, a drawing and an approval log | A custom build, such as the module ThriveAI builds |
Vendor positions move. Salesforce now points new buyers to its Revenue Cloud products, for example, so check each vendor’s own page before you shortlist it. CPQ tools describes each group of vendors in more detail. Then run the questions below on every tool that makes the list.
Questions to put to any CPQ vendor
Take these into a demo, and ask for the answers on one of your own past orders.
- Who rewrites our rules, and in what? A good answer starts from our builder rather than a blank rule editor.
- Can it reproduce thirty of our past orders, price and bill of materials, before we sign?
- Where do the costs come from, and how old are they on the day of the quote?
- What does it do when a cost is missing or an order falls outside the rules?
- Which CAD system does it drive, and does it produce our own drawing template?
- Which ERP does it write to, and what does it write: an item, a bill, an order or a draft?
- Who approves a quote, and can the approval be traced afterwards?
- Who maintains the rules after launch, and how long does a rule change take?
- Where does our data sit, and does anything we enter train a model outside our instance?
Where the data sits
CPQ data holds your costs, your margins and your engineering. ThriveAI builds the CPQ module on a workspace that holds your data. Your data is designed to stay at rest on your own server in Canada. Inference runs on that same server with an open-weight model, or through a frontier model under a written zero-data-retention control. The contract names the model tier, because zero retention is not available for every tier.
The AI CPQ offer describes the first four weeks. The builder is mapped, the configurator is stood up and its prices are checked against past orders. The model and the quote drawing are then generated for a named person to approve.