According to IBISWorld, in the next five years the freight trailer industry is tipped to maintain growth due to diversifying demand industries. With the decline in mining taking effect on the space, government infrastructure projects, commercial and residential construction and food distribution are all still keeping our trucking industry on the road and in many cases even stretched to their limits.
Based on this demand on resources, the industry is calling out for focus to be placed on safety and productivity of both the fleets and vehicles on the road as well as those being purchased and configured.
Managing the demand for such unique vehicles is not easy. Heavy or specialty vehicles, by their very nature, are some of the most complex products manufactured. Most of this complexity is due to the high degree of product variability and customisation associated with any given vehicle type.
CPQ (configure-price-quote) software simplifies the complexities of manufacturing and distributing customised specialty vehicles allowing suppliers to focus on improving safety features and productivity capabilities. Here are some of the major challenges CPQ can address in the building, selling and distribution of specialty trucks and vehicles.
Vehicle Outfitting and Upfitting Vary by Market
Most speciality vehicle manufacturers address one particular market. This allows them to use a limited number of basic truck designs that can be highly modified and customised to match the specific needs of each individual buyer.
CPQ facilitates this decision-making process throughout the design and specification phase of the sale. An interactive, scripted interview collects the basic requirements from the buyer and specifics of the basic product family platforms. As more usage information is collected from the buyer, additional upfitting options and features are recommended or required as needed until the finished vehicle is fully configured. CPQ software uses artificial intelligence (AI) to maintain that information and make those choices based on the specifics of the buyer’s needs. Product managers, engineers and sales representatives all need to display a level of knowledge beyond familiarity, with terminology and anecdotal recall. Authentic knowledge assures buyers that they are in good hands. Lack of tribal knowledge is a huge challenge for specialty vehicle manufacturers and distributors due to the highly specialised nature of the business. CPQ helps to preserve this critical knowledge by incorporating it into the AI and business rules used during the >guided interview and configuration process. For example the recent rule changes around allowable vehicle mass and load carrying capabilities can be written into rules to prompt the buyer and seller during the configuration interview process. Within the automated selling interface of the CPQ system, the customer will only be permitted to select options that are appropriate to specific configurations. As in many industries, product complexity is also reflected in the pricing. Each truck configuration has a separate price and part number or assembly number, so pricing has to be accurate and document-able. Additionally, these products are sold across international borders and driven by multiple regulatory requirements and localised pricing and currencies. Even within a given geographical market, government or large-volume buyers may require development of a purchasing contract or agreement that will contain special pricing and special terms and conditions. CPQ allows businesses to handle multiple price lists as well as special contracts that might extend discounts to VIP customers. The heavy & speciality vehicle acquisition process is highly complicated. This may be reflected in specific discounts for buying contracts negotiated in advance of any particular purchase transaction. Many of these vehicles are acquired by government agencies, which places them in a competitive bidding and procurement process. Specifications for these vehicles are developed over an extended period of time and may involve multiple changes. As the buying process evolves over time, budget limitations and needs assessments become more fluid. The scope of the acquisition may change in terms of units purchased or specific capabilities required. Price quotes, estimates and ballpark quotes produced along the way must be documented and backed up by specific information about what is included in any given quotation. These may well be subject to financial audits and reviews in the future. It is critical for the seller to be able to quickly respond to any changes and provide modifications to the proposed solution in terms of actual product specification and resulting price changes. These have to be handled quickly and with confidence. CPQ gives the seller and the buyer the assurance that any changes made during the specification discussions have been correctly accounted for in terms of price and parts. Most importantly, CPQ provides a solid itemisation of what is included in every quotation or proposal generated. In the months or years following a quotation, there will be no confusion about what was or was not included in that transaction. Consider the impact of sometimes 14,000 options and what that means in terms of inventory and supply chain responsiveness. Especially important to this market is not only availability, but also confidence in quality. CPQ offers increased supply chain visibility that ensures low-volume, infrequently ordered items are available on demand. In addition to being available, CPQ can also minimise the need to maintain low-volume items in inventory by providing early warning or purchase triggers earlier in the ordering process. Using predictive analytics, CPQ data can be reviewed in terms of activity in the early buying process. This data will help to refine and shrink inventory level estimates for required onsite part supplies. Reduced inventory onsite and the ability to turn that inventory more frequently will pay dividends in terms of better management of cash assets―in other words, having parts on hand when you need them, with minimal cash outlay. Configure Price Quote software, such as Cincom’s solutions work with the heavy and specialty vehicle marketplace to contribute to a safer, more productive and modernised trucking industry in Australia.
Complex Pricing, Currencies and Contracts Are Simplified
Competitive Procurement Processes May Require Extended Lead Times and Dynamic Demand
How CPQ Helps Overcome Inventory Challenges
