Manufacturing CPQ Lite — cost buildup, quantity breaks and margin floors

Two things are true about quoting in KanchanFlow today, and it matters which is which. The quote itself is live and in production: line items, drawings and material certificates attached to the record, a share link the buyer opens without a login, multi-currency with the FX rate locked onto the quote at the moment you price it, US sales tax and India GST rates, e-signed acceptance, and unlimited revision history on every tier including Starter. What is still in development is the estimating engine underneath it — the four-column cost buildup, quantity-break tiers, alternate variants, structured BOM roll-up, the margin floor and the rules-based approval engine. That work is roughly 30 percent complete and targeted at Wave 1 Milestone 4.

We call it CPQ Lite deliberately, and the distinction is not marketing. KanchanFlow is not an ERP, MRP, CAD, BOM or advanced CPQ system. We are not building a rival to Salesforce CPQ, PROS or Conga, and we will not pretend otherwise on a feature page. Those suites exist to configure a catalogue product across thousands of valid option permutations and to price a licence or a subscription against a rate card. A job shop has a different problem: one print, one material, six operations, an outside plater, and a number that has to hold for sixty days while steel moves. CPQ Lite is the five things an estimator pricing a machined part actually needs — cost buildup, quantity breaks, alternates, margin guardrails and revisions — and deliberately nothing beyond them.

The buildup has four columns because a shop carries four kinds of cost. Material is weight times rate plus scrap allowance, taken from the stock form you are actually buying rather than the finished part weight. Labour is setup plus cycle time per operation at your own machine and labour rates, with setup amortised across the quantity — which is exactly why the 500-piece unit price is lower than the 100-piece one, and why a quantity break is a calculation rather than a concession. Outside process is the plating, heat treat, anodise, passivation or NDT you buy in, held as its own column so a vendor increase is visible instead of being smeared into overhead. Overhead applies on the basis you choose. Margin sits on top of the four, against a floor.

Pricing is a hierarchy, not a single lookup, and the order is fixed: contract price first, then customer price, then the quantity break, then the standard cost buildup. If the part sits on a negotiated contract price list that is in effect on the quote date, that price wins and the buildup does not get a vote. If there is no contract but the customer carries their own agreed price for the part, that comes next. If neither exists, the quantity-break ladder for the part applies at the quantity being quoted. The cost buildup is the fallback — the answer when nothing has been agreed yet — not the first answer. Estimators get this wrong in spreadsheets constantly, quoting a standard price to an account that negotiated a lower one eighteen months ago and then honouring the mistake.

Discount authority is a threshold by role rather than a habit. A salesperson can discount to a set percentage; an inside sales manager further; a sales director further again; below the margin floor is the owner or the general manager and nobody else. A quote that goes past the holder's threshold cannot be finalised or sent until the named approver has approved it, and the approval is recorded on the quote with the approver, the timestamp, the depth of the discount and the reason given. There is no silent override. Where an emergency override exists it is available to authorised users and it is logged as an override, because an undocumented back door defeats the point of having thresholds at all.

Every quote carries a revision number, Rev 0 through Rev n, and historical pricing is never overwritten. When you re-quote at a new material rate, the old revision keeps the rate, the buildup, the margin, the approvals and the exact document that was sent. This is not a storage nicety. Eighteen months after a job, when a buyer holds a purchase order against Rev 3 and your material has moved twenty percent, you have to be able to answer one question without argument: why did this quote carry this price on the day it was sent. Revision history is what answers it, which is why we never cap it or expire it on any tier — Starter, Professional and Enterprise all keep the full chain, and the pricing page carries that as a guarantee rather than an upgrade lever.