Product configuration helps your business sell complex products. Customers can configure and customize items to meet the specifications they need.

Offering this option results in the following:

• More sales

• Better customer experience

Using product configuration software also automates customization and the quoting process. That means less room for error and more time for you to run your business.

Learning about product configuration sets you on your way to these desirable outcomes.

So let's jump in and discover more.

Key Points

• Manually configuring products is time-consuming.

• Automating product configuration makes the process easier.

• Product configuration helps the sales process run smoothly and saves everyone time.

• Customers see a visual representation of the product with configuration

• Product configuration goes deeper than customization

• Businesses and customers benefit from product configuration

What is Product Configuration?

Product configuration is selecting and arranging the parts of a product in different combinations before manufacture and delivery to customers. It allows customers to assemble complex products to their desired specifications.

You can speak with customers and configure products manually, or you can use configuration software.

Manually configuring products takes more time, while automating it with software makes product configuration faster and easier.

Customers can arrange products to meet their needs with configuration. For instance, an eCommerce store selling handbags might use a configurator - consumers can combine different aspects of the handbag to create the final product.

In this example, the product configurator is integrated with CPQ software (Configure, Price, Quote). It allows customers to configure the products themselves, get a price, and buy on the spot if they want to.

Why is Product Configuration Important?

Product configuration is important because it automates the product specification process, saving you and your customers time. It makes the quoting and buying of complex products much faster.

Your customers can use a configurator on your website and arrange the product how they want. They don't need to speak with your sales team to configure products.

That saves everyone time, freeing up your team and keeping customers happy.

Product configuration also reduces errors in the sales process. You no longer need to go back and forth with customers on the phone or email. That saves you time in the long run.

So product configuration helps the sales process run smoothly and saves everyone time.

What Are the Major Features of Product Configuration?

For product configuration to work, it should have the following 5 major features:

1. Clear bill of materials

2. Visual models

3. CAD models

4. Safeguards

5. Quote generation

Clear bill of materials

A product configurator needs a bill of materials (BOM). This is the selection of materials or parts needed to make the final product.

You must attach a price to each part as well. Customers can then see changes in the price in real time.

A BOM lets anyone using the configurator to see what customizations they can make. Users can view possible combinations and accompanying prices with ease.

Visual models

A configurator should create visual models, allowing your customers to see how the final product looks. That gives people a great idea of what they're buying.

Visual configuration helps you to better meet customer expectations. And it increases customer satisfaction.

CAD Models

A CAD (computer-aided design) model allows customers to view a 3D image of the product. They can check it out from all angles.

That gives them a clearer understanding of the outcome. A 3D image leads to even greater customer satisfaction.

Safeguards

Product configuration safeguards you and your customers against errors. For instance, you input the specifications people can choose from.

So customers can't choose parameters you don't deliver. That protects everyone against potential errors in the ordering system, saving time and money.

Quote Generation

Finally, a configurator processes a quote for your customers. They choose what they want and get a price for it.

Quoting complex products takes a lot of time when you do it manually. A product configurator saves everyone time, and your customers receive a quote on the spot.

Benefits of Product Configuration

Product configuration benefits your business and your customers. Let's break it down.

8 Benefits for Your Business

1. Capture expert knowledge - you can capture and keep expert knowledge in a configurator. It's available to everyone who accesses the tool, including staff with less technical knowledge.

2. Streamlined processes - you get accurate specifications of what the customer wants, reducing errors. And configuration streamlines the product development process, too - shortens the process between ideation, visualization, and production.

3. Cost optimization - accurate pricing and specifications meet customer needs, avoiding errors. And you can optimally track and manage inventory. Both lead to greater cost optimization.

4. Better customer experience - people can choose the specifications they want and customize products. Configurators are interactive and engage customers in the process, boosting their experience and connection with your business.

5. Customer insights - you can collect customer data, revealing valuable insights on customer behavior. It means you identify the most popular features of products for future ideation.

6. Inventory Control - connect your product configurator to your inventory management system to provide real-time updates on the inventory and prevent overstocking or understocking situations.

7. Competitive edge - a configurator gives you an edge over competitors, especially ones not using the tool.

8. More sales - we saved the best for last. Giving customers exactly what they want helps you increase conversions.

8 Benefits for Your Customers

Simplify complex products - some items can have many variations and customizations. A product configurator simplifies the list of options into an interactive tool.

1. Simplify complex products - some items can have many variations and customizations. A product configurator simplifies the list of options into an interactive tool.

2. Faster quotes - your customers get a quote instantly on the configurator. It saves them time and effort.

3. Accurate orders - a configurator reduces errors, so your customers get accurate orders. They won't need to send the order back and wait for the correct one.

4. Personalization - your customers choose the specifications and customizations they want. They get a product that suits their needs - exactly.

5. Visualization - people can see how the product looks and the impact of different selections in real time.

6. Transparency - your customers make choices, see the outcome, and get a price. The process is transparent, helping them make informed decisions.

7. Consistent availability - means your customers will never be let down.

8. More satisfaction - involving your customers in the process increases their satisfaction. They can buy with confidence.

Limitation of Manual Product Configuration

Manual product configuration takes considerable time and resources. You or your team must speak with customers to configure products to their specifications.

That manual process involves a lot of back-and-forth communication over the phone or email. You need to check your product catalog to find what the customer wants.

Manual product configuration is time-consuming and prone to errors. Ultimately, it costs you money.

Automating Product Configuration

You can automate product configuration to streamline production and sales processes. Embedding a configurator on your website allows customers to customize products to their liking.

For instance, a furniture business can provide a product configurator for customers. They can choose various specifications for the desired items.

Automating the process doesn't have to be hard. A furniture business can simply embed a chair product configurator template into its website for customers to use.

Types of Product Configurators

Various industries use product configurators, and there are several types. Here are 6 popular ones.

• STO (select-to-order)

• PTO (pick-to-order)

• CTO (configure-to-order)

• ATO (assemble-to-order)

• MTO (make-to-order)

• ETO (engineer-to-order)

Select-to-order

With STO, the customer can select all of the individual components of a product. No component is dependent on another. So when a customer selects a part, it doesn't affect the availability of other parts.

Pick-to-order

Customers can select items but are limited to option selection rules. So their selection might affect the availability of another component.

Configure-to-order

Manufacturing industries often use CTO. Customers can select related components based on a modular system - a collection of building blocks they can configure in various ways. CTO adapts to different customer needs.

Assemble-to-order

In the ATO model, a business pre-produces individual components based on a demand forecast. It doesn't produce the final product until it receives the customized order.

Make-to-order

The business makes the product only after a customer places an order. It stores individual parts and starts the production process when it receives the order.

Engineer-to-order

Businesses might need new parts and production rules for the ETO model. They can specifically manufacture individual components for each order.

Although the process might contain standard parts, it still involves an independent production process. This model is the most complex type of product configuration.

CPQ vs. Product Configuration

CPQ (Configure, Price, Quote) is a tool businesses use to sell their products. It's popular in the manufacturing industry and among B2B companies. Users can choose options from a drop-down menu and select products to suit their needs.

Product configuration integrates CPQ technology but takes it further. Customers who use a product configurator get a visual representation of the product. They can see any changes and customizations in real time. A configurator might render images in 2D or 3D.

How CPQ Software Helps Your Business

CPQ software lets you integrate a product configurator into your website. Customers can select various customization options and get a visual rendering of the product.

This software helps your business in several ways:

1. Automates the quoting process

2. Saves time

3. Improves accuracy

4. Reduces errors

5. Engages customers

6. Processes payments

7. Integrates with other tools

8. Fosters transparency

9. Boosts sales

How to Choose the Best Configurator Software

Selecting the best configurator software is crucial for your business. Here are some factors to consider.

Setting up

The best configurator software should be easy to set up. Look for features like drag-and-drop interfaces and no-coding builders. These make creating a product configurator much easier.

And the best options will always offer templates. You can simply input the information relevant to your business and get going within minutes.

Usability

It's best to use intuitive and user-friendly configurator software. You want customers to have an incredible experience when using your product configurator.

Integration

The configurator should integrate with your website and any other tools you use. Using software that won't let you embed a configurator into your site is no use.

Calculations

You might have complex products and a complicated pricing structure. So you need software that can handle powerful calculations.

But it shouldn't be too hard to set up. Look for software that doesn't require advanced knowledge or coding - knowing Excel or Google Sheets should be enough.

Customization

We all know how important your business branding is. You want to be able to customize the product configurator to match your branding and website.

And the customization options shouldn't stop there. You need the ability to customize the configurator to showcase your products and prices.

Maybe you want to add various layered images of your products. Features like this allow you to show your products in the best light.

Payments

The best product configurator software lets you accept payments online. Maybe customers configure a product, are happy with the outcome, and want to buy on the spot.

Your configurator must be able to take the payment. Otherwise, you could lose the sale.

The software should make it easy for you to convert customers. Accepting payments gives you the best chance.

Customer Service

The software service provider should offer excellent customer service. If something goes wrong, the company must provide support to solve problems.

Product configuration FAQ

What is product configuration management?

Product configuration management is software. It allows companies to sell and process orders for configurable, multi-optional, and customizable products.

Product engineers use this software. And it’s integrated with data management systems across the lifecycle of a product.

These tools help with the rapid flow management of products, from sales to engineering to production. They improve efficiency and save time in the processes.

What components are part of product configuration?

The components of product configuration depend on the business. Different industries will have varying components in the configuration process.

A product configuration model contains one or more components. These are linked through subcomponent relationships.

You define the components once and can use them many times in one or more product configuration models. Components are the main building blocks of a product configuration model. They relate to almost all of the information about the model.

What is product configuration vs. customization?

Product configuration is different to customization. It lets you create unique products based on your needs. Configuration goes beyond options like color, size, or finish. With product configuration, you can arrange parts and combine them in different ways to design a product.

You can customize products along basic parameters with customization. An eCommerce store might allow customization of color and size. But configuration is more comprehensive.

What is the product configuration model?

The product configuration model consists of one or more components connected by subcomponent relationships. Once you define components, you can use them in various product configuration models. It allows you to fulfill different customer requirements.

You can configure products with a unique bill of materials once you set up the configuration model. The model uses declarative constraints and calculations to negotiate the connections and limitations between the product variants.

You can configure items for sales orders, quotes, and production orders.