There nothing more frustrating for a manufacturer than spending hours, days, even weeks on a quote package only to find out you were not awarded the job. What a kick in the gut. What’s worse is if you find out the reason for losing the bid was because the quote was submitted too late or your quoted price was way out of whack compared to the competition.
Most shops produce numerous quotes a day. If they are lucky they might win 10-20% of what they quote. These same shops have no standardized method of generating quotes, instead relying on the experience of their estimator(s). Relying on the experience of your estimators, or the opinion of your machine operators, is an inconsistent and dangerous way to produce costs that ultimately determine whether you win or lose a job and if you make or lose money.
No matter size shop you are, you should really be taking a closer look at the way you do your cost estimating. Using an Excel spreadsheet for estimating today is old school. Spreadsheet have many limitations, including the fact that they are not database driven and cannot be worked on at the same time by multiple people. Comparing Excel to computerized cost estimating software is like comparing a manual machining center to a CNC machine. The CNC machine, like estimating software is faster, more accurate, and once properly configured, can be used by people with less experience.
The Early Bird Catches the Worm
In today’s “needed it yesterday” world, the first quote in often wins the job. Consequently, it’s little wonder that shops who are still guestimating and not utilizing more efficient and automated cost estimating software are being left in the dust.
What if you could take an off the shelf cost estimating tool and configure, or customize it, with your companies data (work center shop rates, material pricing, etc.) and your estimators tribal knowledge? This would not only speed the quoting process significantly, but it would also create more accurate quotes while providing a standardized process throughout the company.
Today’s more advanced cost estimating software solutions now have tools that allow you to utilize the part feature and dimensional information embedded in 3D CAD models to speed up the cost estimating and quoting process even further. A part that might take an estimator an hour to estimate manually can now be done in a few minutes with cost estimating software and a solid model.
Profit or Loss
Whether or job turns into a profit or a loss starts with accurate cost estimating. Shops relying on experience or like jobs are never really confident that a job is going to be profitable. These companies typically pad the quote to cover the unknown, often times causing them to lose the job they coveted.
In today’s highly competitive environment, that type of approach to cost estimating won’t work for long. Cost estimating software can make a huge difference to a company’s bottom line. Having a tool that utilizes the company’s tribal knowledge, while at the same time standardizes the quoting process, gives those shops a distinct advantage over the competition.