Petrochemical Mass Transfer Equipment CPQ (Configure, Propose, Quote)


SITUATION

Our petrochemical industry company faced significant inefficiencies in the Configure, Propose, Quote (CPQ) process for mass transfer equipment using in refining plants. Customers often submitted RFQs (Requests for Quotes) to multiple global sales offices in attempts to obtain the best price, leading to duplicate engineering efforts, inconsistent bids, and internal competition between offices.

Before bidding, these multi-million-dollar projects required extensive engineering work, often involving chemical, structural, and mechanical engineers to configure multiple options for durability and cost savings. Errors in quoting and engineering specifications occasionally resulted in costly rebuilds and delays, with one recent mishap costing millions to correct.

The company sought a global CPQ solution to:

  • Eliminate duplicate engineering work and internal competition.
  • Ensure consistency and accuracy in quotes and engineering specifications.
  • Automate the CPQ process to reduce costs and turnaround time.
  • Address statutory differences across North America, Europe, Asia, and the Middle East that incentivized or subsidized manufacturing portions in different nations.

COMPLICATIONS

  1. The existing CPQ system, developed independently by a European office, was written in Italian, limiting its usability.
  2. RFQs often concealed the installation location and customer identity, making it difficult to detect duplicate bids.
  3. Engineering drawings and documents were siloed in isolated systems, leading to errors and miscommunication.
  4. A recent project delivered incorrect equipment to the Middle East, resulting in a costly rebuild and reputational damage.
  5. Each sales office operated with different procedures, practices, and systems, creating additional integration challenges.
  6. The COVID-19 pandemic restricted travel, complicating collaboration across global teams.

APPROACH

  1. Understanding Stakeholder Needs: Met with the CEO, project manager, and key stakeholders to identify pain points and business goals.
  2. Assessing Existing Assets: Evaluated the European CPQ system and engaged the original developer to overcome language and technical barriers.
  3. Building the Right Team: Identified knowledge gaps, hired additional contractors, and aligned internal resources to execute the project.
  4. Creating a Unified Vision: Developed a project roadmap prioritizing foundational needs, de-risking unknowns, and aligning with Agile methodologies.
  5. Proposing the Solution: Presented a detailed PRD (Product Requirements Document) and live demonstrations to ensure alignment with the company’s fixed-bid, waterfall processes.

EXECUTION

  1. System Development:
    • Collaborated with architects and developers to design a robust CPQ system capable of sharing global CPQ drawings, contents, and data.
    • Delivered baseline functionality first, followed by advanced features like automated quote generation and “same as” search to detect duplicate RFQs.
    • Integrated AutoCAD drawings with quotes to eliminate discrepancies and ensure accuracy.
  2. Training and Rollout:
    • Hired a training contractor to develop comprehensive materials, including sample data, workbooks, and online guides.
    • Trained trainers to travel globally, ensuring consistent adoption across all offices.
    • Conducted Agile sprints with regular demonstrations to stakeholders, incorporating feedback to refine the system.
  3. Change Management:
    • Established feedback channels with sales, engineering, and customer success teams to address concerns and drive adoption.
    • Evangelized the benefits of the new system to overcome resistance from long-time employees.

RESULTS

  1. Efficiency Gains:
    • Reduced quote turnaround time from 3 days to 1 hour through automation.
    • Eliminated duplicate engineering efforts, saving millions annually.
    • Cross-referencing AutoCAD drawings with quotes prevented costly errors, with one instance alone saving over $1 million.
  2. Improved Collaboration:
    • The “same as” search feature identified duplicate RFQs, enabling offices to collaborate and provide consistent quotes. Dimensions of specific parts could be searched for other quotes with identical dimensions to detect likely quotes for the same site equipment.
    • Real-time data sharing across global offices improved coordination and reduced miscommunication.
  3. Financial Impact:
    • The system paid for itself within the first year, with estimated savings of $10 million.
    • Faster turnaround and improved accuracy led to higher sales and customer satisfaction, positioning the company for acquisition by a top-three global petrochemical firm.
  4. Global Rollout:
    • Successfully deployed the system across U.S. offices within six weeks, followed by Europe, Asia, and the Middle East.
    • Training programs ensured seamless adoption, with users equipped to leverage the system’s full capabilities.

LESSONS and TAKEAWAYS

  • Unified Systems Drive Success: Standardizing processes and integrating siloed systems is critical for operational efficiency and customer satisfaction.
  • Collaboration is Key: Engaging stakeholders early and maintaining open communication ensures alignment and buy-in.
  • Agility Matters: Adopting Agile methodologies enabled rapid delivery and continuous improvement, even in a traditionally waterfall environment.
  • Attention to Detail Pays Off: Addressing technical debt and ensuring accuracy in quotes and engineering specifications prevented costly errors and improved trust with customers.