{"id":1073,"date":"2025-06-11T14:30:29","date_gmt":"2025-06-11T14:30:29","guid":{"rendered":"https:\/\/experlogix.kinsta.cloud\/?p=1073"},"modified":"2025-12-23T16:37:28","modified_gmt":"2025-12-23T16:37:28","slug":"cpq-protecting-margins-in-choppy-waters","status":"publish","type":"post","link":"https:\/\/experlogix.com\/de\/cpq-protecting-margins-in-choppy-waters\/","title":{"rendered":"CPQ: Protecting Margins in Choppy Waters"},"content":{"rendered":"[et_pb_section fb_built=”1″ admin_label=”section” _builder_version=”4.16″ global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_row admin_label=”row” _builder_version=”4.16″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_column type=”4_4″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||” theme_builder_area=”post_content”][et_pb_text admin_label=”Text” _builder_version=”4.27.5″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” hover_enabled=”0″ global_colors_info=”{}” theme_builder_area=”post_content” sticky_enabled=”0″]

Economic storms have become the new normal for manufacturing CFOs. Every unexpected supply glitch, raw\u2010material spike or tariff announcement can rip margins out from under you. We at Experlogix have seen this all before in our nearly 25 years working with industry leaders. Our advice is simple: Configure\u2011Price\u2011Quote (CPQ) software isn\u2019t a luxury now, it\u2019s your margin\u2019s best friend<\/strong>. By automating quoting with ironclad pricing rules and real\u2010time data, CPQ turns guesswork into governance<\/a> \u2013 so even when chaos reigns, your profit stays protected.<\/p>\n

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Tariffs, Supply Chain Hiccups, and Inflation<\/h2>\n

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Ports clogged, trucks stranded, parts shortages \u2013 the post\u2011COVID world has been a logistical nightmare for manufacturers. Global shipping rates surged to record highs<\/strong> during the pandemic (driven by soaring fuel costs, supply chain disruptions, labor shortages, and shipping port congestion). After some relief mid\u20112023, new crises (Middle East conflicts and a Panama Canal drought) sent freight rates soaring again. This directly fed into input costs. It is notable that Boston Fed economists found a tight correlation<\/strong> between shipping costs and U.S. import price inflation (both spiked in 2020 and again in late 2023). At the same time, commodity prices went through the roof \u2013 lumber, steel, copper and various basic foodstuffs hit multi\u2010year highs as economies restarted. The economic effects of labor issues, fuel costs, electronic chip shortages, and many other commodity groups were compounded by highly fluctuating demand curves. In practice, these factors saw raw costs for parts wildly jumping overnight, and many companies have simply passed those costs on<\/em> to customers. The net result: CFOs watched their landed costs surge and margins erode<\/strong> in real time, scrambling to raise prices while customer budgets frayed.<\/p>\n

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And just when we thought things might settle down a bit and maybe get back to normal\u2014(remember normal?)\u2014then came the tariffs. Yes: tariffs.<\/p>\n

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Tariff Turbulence<\/h2>\n

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Just as supply chains were finding their feet, trade policy uncertainty hit like a suggest gust. Surprise tariffs<\/strong> and trade wars can wipe out profits faster than you can recalculate a quote.<\/p>\n

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Case in point: in March 2025 the U.S. reinstated 25% Section 232 tariffs<\/em> on imported steel and aluminum. Suddenly, any build containing those metals could carry a hefty new tax. In a survey of manufacturing execs, 86% reported higher landed costs from tariffs<\/strong>, and 83% said their margins on imported goods were squeezed. (Of those, 76% tried<\/em> passing costs on, and others ate the hit.) [source: The Association for Manufacturing Technology\u2019s Tariff Impacts on Manufacturing Technology Spot Survey<\/em> (2Q2025)<\/a>]. These tariffs are additive<\/strong> \u2013 they stack on top of existing duties \u2013 so experts warn companies that \u201ccosts of imported steel and aluminum products\u201d have significantly increased<\/strong>, upending budgets and pricing plans. In plain English: an engineer might spec a product one day, then an hour later a new tariff announcement makes that bill of materials unprofitable. CFOs can\u2019t afford that kind of volatility.<\/p>\n

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\"A<\/figure>\n

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Margin Erosion in Your Quote\u2011to\u2011Cash<\/h2>\n

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Here\u2019s the rub: most margin damage happens well before<\/em> production even starts \u2013 in the quoting process. Without the right tools, well-meaning sales reps routinely give deals away by accident. Rising customization demands, inflation and supply volatility are squeezing profitability at the quote stage. Under pressure to close, a rep may misconfigure an order or add-on option, use outdated cost data or blast out deep discounts just to win a deal. In engineer\u2011to\u2011order manufacturing, these problems can quickly turn a quote into an unprofitable sale. Systematically execute a series of such deals and what you have is a business killer. By contrast, with a leading CPQ solution connected to your accurate and timely cost data, inventory data, and margin guardrails, you can avoid selling products that cost much more to build than you charge. For example, a unit might look great on paper until you realize it depends on a scarce part with a 12\u2011month lead time and\/or a volatile base cost. A smart CPQ will flag that for you. In fact, CPQ systems can pull in supply\u2011chain data so you avoid quoting an option that\u2019s going to blow your margin or miss promised delivery dates.<\/p>\n

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Without CPQ, your traditional Excel-based quoting is a margin kill zone. After one too many painful quarters, executives ask: what measures can we put in place to enforce our pricing rules and quoting processes, so we stop doing bad deals? That\u2019s exactly what CPQ does.<\/p>\n

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How CPQ Stops the Bleeding<\/h2>\n

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CPQ safeguards your margins. It enforces<\/em> your pricing rules and uses up\u2011to\u2011date master data so that every quote adheres to your company policies. Instead of relying on memory or gut feel, reps get guided selling<\/em> that limits options to profitable bundles, dynamic pricing<\/em> that automatically reflects new costs or tariffs, and built\u2011in approval workflows<\/em> that stop rogue discounts in their tracks. In practice, even a basic CPQ solution enables dynamic pricing strategies and configurable pricing rules, so changes (like a new steel tariff) ripple instantly through all quotes.<\/p>\n

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Guided prompts help reps select upsell bundles or higher\u2011margin options that best meet customer requirements. And discount controls enable reps to immediately see how any markdown affects their profit, while precluding approval of steep discounts that would have your margins falling off a cliff. Good CPQ solutions enable quotes that are fast, accurate, compliant, and<\/em> profitable.<\/p>\n

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