Peter@Hammerstein.se  https://hammerstein.se

The Butterfly Effect in the Lorenz Complex System

Configure Price Quote

(CPQ)

(1) The Physics of Complex Configuration - A Short Theory

(2) Practical Experiences with CPQ (15+y), mainly from Tacton Systems AB

by Dr. Peter Hammerstein

(1) The Physics of Complex Configuration - A Short Theory: 

In any dynamical system, e.g., a commercial product or process, consisting of three or more components, the situation easily gets non-linear, i.e., complex.

For example: If a choice of a component/ process A affects the possibilities of choosing a second component/ process B and this constraint affects a third component/ process C, which itself has an influence on the possibilities for the very first component/ process A, we already have the basics for Complex Behaviour. This is called the three body problem - without any general, exact solution possible in Nature. Such a system is called chaotic.

In case of an industrial product there can easily be many thousand components, depending on each other - directly or indirectly. This will be for sure a non-linear situation. In this case there is no way of finding an exact mathematical solution in terms of an analytical equation. This means that the two only possibilities of handle the situation is by numerical, mathematical approximation or, secondly by computer assisted simulation of a configuration model.

It is here, Modeling and Configuration become essential. Or even Modularisation, if you prefer this term.

The task is to minimize the effects of non-linearities in the relations of the entities and by getting as much straight relations with the properties of the entities as possible. That is called linearization. The exotic cases has to be dealt with in an extra category, i order to not inrease the time for finding a configuration solution, exponentionally by their numbers. Speed is the goal!

Configure

There are different strategies by different companies how to handle product configuration. The philosophies differ largely and are more or less efficient. I will not go into details here, avoiding violations of business secrets.

Price

Along with the configuration of a complete and accurate product, comes the pricing. This is automated but must - and cannot - be 100% correct. This is due to the continued updating of all the prices of all the components. It is also not necessary, since the goal is to create a first quote, i.e., a proposal, to the end customer rapidly.

Quote

According to the individual configuration of the desired product, a document is to be created, revealing the specifics of the product, agreed on by the salesperson and the end customer. The generating of the quotation document is automated and formatted by the individual customer requirements. Also, here, different technical solutions are implemented by the different CPQ-companies specifically and cannot be discussed further at this point.

Tekn. Dr. Peter Hammerstein, 2022

 (2) Practical Experiences with CPQ (15+y), mainly from Tacton Systems AB:

Terminology: CPQ = Configure-Price-Quote, Product- and Sales Configurator, Complex Non-linear Data-technology,  Digitalization; Industry 4.0

"my" Customers: e.g., Siemens Energy, ABB, Scania, SSAB, Cramo, Munters, Yaskawa, Bürkert, Hagen AS, Getinge, Metso, Albany Doors, Kramp, ...etc.

Various CPQ-solutions: e.g., Tacton Configurator (TCsite), Tacton CPQ, Tacton extension for Salesforce CPQ, Salesforce CPQ, Ventacor, SAP, ...etc.