Solutions For Cost Estimating And Quoting Concerns

Every year for the last 15 years I’ve been a part of over 200 Costimator cost estimating software demonstrations for various job shops, contract manufacturers and OEM’s worldwide. Prior to every demo we always ask the same 5 questions of our prospective clients:

1.     What type of processes do you need to estimate (machining, laser, welding, assembly, etc.)?

2.     Are the parts being manufactured in-house or outsourced?

3.     What percentage of time do you have 3D Models to estimate from?

4.     How are the labor hours (cycle times) being estimated today (experience, use of formulas, etc.)?

5.     What are the main issues with your current estimating method and how do they cost the company money?

Although the answers to the first 4 questions may vary from company to company, the last question is almost always answered the same way – speed, accuracy and consistency which results in:   

  • Higher labor costs.
  • Lost bids due to overestimating and not responding on time to RFQ’s.
  • Lower profits on underestimated jobs that were awarded and produced at a higher than expected cost.

Here a few actual responses from some of the companies that have contacted us about Costimator. It’s an effort to overcome their cost estimating and quoting issues.

“Improve timeliness, consistency, and accuracy of quotes. By having a system in place we can cross train individuals for quoting and won’t be solely bound by having only the individuals that are uniquely intimate with the process do the quoting.” – Minnesota Machine Shop

“No clear defined work standards, your available work standards would be useful to benchmark from for estimating as well as correct routing setups and management of productivity standards in shop. These issues cause frequent underbidding or insufficient data to defend price down from customers.”  – California Contract Manufacturer

“Our demand for machined aluminum parts is expected to skyrocket over the next few years, and our current method of cycle time estimation is not scalable.  Additionally, we would like to roll in additional processes beyond standard milling and drilling time estimates. Poor design features (unreasonable tolerances, radii, etc.) and a lack of cost visibility cost the company money in sub-optimized design-for-cost parts.  Additionally, the company currently doesn’t estimate part costs in advance of supplier negotiations and gets taken advantage of during supplier down-select.”  – Michigan OEM

Cost Estimating Software that is database driven, is configurable and comes with pre-established time standards and industry validated cost models. This knowledge can help manufacturers overcome these expensive cost estimating and quoting issues. Cost estimating systems that incorporate feature recognition technology can speed up the estimating process and increase the overall accuracy of an estimate even further.

If your current estimating system is costing your company money, now might be a good time to consider utilizing the latest technology in this critical area of your business. Give us a call at 800-644-4318 or browse through our web site: www.mtisystems.com

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