CPQ: CPQ (configure, price, quote) is software that lets a seller or buyer choose options for a product, applies pricing rules to them and produces a formal quote.
CPQ tools grew up in companies that sell configurable catalogue products: a machine with a choice of motors, a building with a choice of windows. A salesperson picks options, the software checks the combination is valid, applies price lists and discounts, and generates a quote document.
Custom manufacturing is a harder fit. In a job shop the “product” is a part nobody has made before, so the price depends on its geometry, not on a list of options. A generic CPQ tool can hold your rules for material, finish and quantity, but it cannot measure an STL or a STEP file to work out machine time.
Example: a CPQ setup for a print bureau might hold a rule such as “add 15% for a dyed finish”, but it still needs someone to type in the print time. A geometry-aware quoting tool works that time out from the file.
The common confusion is to treat CPQ and instant quoting as the same thing. They overlap on the “configure” and “quote” steps; they differ on where the cost comes from. Many shops also expect their ERP to do CPQ, and some do, for repeat parts.
For a longer comparison, read CPQ for manufacturing.
Go deeper: CPQ for manufacturing: what it is, what it is not, and how it differs from ERP