{"id":58,"date":"2021-02-05T19:57:00","date_gmt":"2021-02-05T19:57:00","guid":{"rendered":"https:\/\/www.mtisystems.com\/blog\/?p=58"},"modified":"2024-04-15T22:07:30","modified_gmt":"2024-04-15T22:07:30","slug":"is-manufacturing-cost-estimating-software-a-worthwhile-investment","status":"publish","type":"post","link":"https:\/\/www.mtisystems.com\/blog\/2021\/02\/05\/is-manufacturing-cost-estimating-software-a-worthwhile-investment\/","title":{"rendered":"Is Manufacturing Cost Estimating Software a Worthwhile Investment?"},"content":{"rendered":"\n<figure class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"680\" src=\"https:\/\/www.mtisystems.com\/blog\/wp-content\/uploads\/2021\/02\/william-iven-jrh5lAq-mIs-unsplash-1024x680.jpg\" alt=\"\" class=\"wp-image-59\" srcset=\"https:\/\/www.mtisystems.com\/blog\/wp-content\/uploads\/2021\/02\/william-iven-jrh5lAq-mIs-unsplash-1024x680.jpg 1024w, https:\/\/www.mtisystems.com\/blog\/wp-content\/uploads\/2021\/02\/william-iven-jrh5lAq-mIs-unsplash-300x199.jpg 300w, https:\/\/www.mtisystems.com\/blog\/wp-content\/uploads\/2021\/02\/william-iven-jrh5lAq-mIs-unsplash-768x510.jpg 768w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>Having worked for and with hundreds of manufacturers over the past 3 decades, I can tell you that the majority of shops estimate by knowledge\/experience, long-hand calculations and\/or similar jobs. \u00a0Is a <em><strong><a href=\"https:\/\/www.mtisystems.com\/cost-estimating-software.html\">Cost Estimating Software Investment<\/a><\/strong><\/em> worth it? The problem with those estimating methods is they can be extremely time consuming, inaccurate, and inconsistent. The result \u2013 late delivery of quotes to the customer, quoted prices that are either too high or too low (both of which can be costly), and customers that can quickly lose confidence in your shop\u2019s ability to provide fast, accurate, consistent quotes (which can also lead them to question your shop\u2019s capacity to produce quality parts in a timely, consistent manner).<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What Are the Benefits of Cost\nEstimating Software? <\/strong><\/h2>\n\n\n\n<p>The main benefit these programs\nprovide is a standardized, formula-driven method of estimating labor and machine\ncycle times. Utilizing standardized formulas to estimate labor\/cycle times\ntakes the subjectivity out of the process, leading to a much more consistent\nestimate. The better estimating systems allow you to modify the out-of-the-box\ncost models (cycle time formulas) to more closely model the speed of the equipment\nyour shop owns, resulting in much more accurate cycle time estimates. No off\nthe shelf software will have your company\u2019s data, and without that in place, a\nhigh level of accuracy cannot be achieved.<\/p>\n\n\n\n<p>A cost estimating software investment has many additional features that is designed to increase the speed, accuracy and consistency of the entire estimating and quoting process. Most systems have tools to accurately calculate raw material usage and costs. Some of the more powerful cost estimating software on the market today enables users to open, capture and utilize feature and dimensional data found within a 3D CAD model, which greatly reduces the amount of manual data entry required to produce an estimate, dramatically speeding up the estimating process. &nbsp;In addition, the more advanced databasedriven systems allow you to mass import data (raw material pricing, work center shop rates, etc.) into the databases as well as export the estimate data out of them, in order to create custom reports and links with other software tools, such as ERP\/MRP. &nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>What Is Your Current Estimating Method\n\u201cCosting\u201d Your Company?<\/strong><\/h3>\n\n\n\n<p>To answer that question, you first need to identify what the\nmain issues are with your current cost estimating process. For most shops it\u2019s\none or more of the following; a lack of estimating speed (quote turnaround),\naccuracy (quotes too high or too low) and a lack of consistency, from part to\npart and\/or between one estimator to another. <\/p>\n\n\n\n<p>If your company\u2019s main estimating issue is the time it takes\nto generate an estimate, the benefit can come in the form of cost savings,\nrevenue growth, or both. Increasing your estimating speed would allow you to\nreduce your estimating staff, lowering your labor costs. It can also allow you\nto increase your quoting throughput, increasing the number of jobs you quote, which\neven with the same win rate would result in more jobs, revenues and profits. <\/p>\n\n\n\n<p>Most companies who utilize cost estimating software also\nrealize a significant increase in their quoting accuracy and consistency, which\ncan dramatically increase a company\u2019s RFQ win rate. The result \u2013 higher\nrevenues and profits. Being accurate on your quotes also reduces the likelihood\nthat you will experience \u201closer\u201d jobs (cost your company money) due to\nunderestimating your true costs. That can be a huge cost avoidance benefit for\nmany companies.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Is Estimating\nSoftware for Every Company?<\/strong> <\/h4>\n\n\n\n<p>Absolutely not. The good news, for those shops that can\nbenefit from this type of software, is the ROI is normally achieved within the\nfirst few months of its use. For many, all it takes is one or two \u201cwins\u201d that\nresulted from the customer received your quote on time, or even first, or\nperhaps because the quoted price was spot on rather than being too high, or\neven unreasonably low. <\/p>\n\n\n\n<p>For companies who are burdened with an estimating\/quoting process that is slow and at times inaccurate, not having cost estimating software to rely on can be extremely costly. With competition amongst manufacturers heating up like never before, now might be a good time to see if this type of software can give your company the competitive advantage it deserves.<\/p>\n\n\n\n<p>Learn <a href=\"https:\/\/www.mtisystems.com\/why-costimator.html\">Why a Costimator Estimating Software Investment<\/a> is going to save your company time and money.\u00a0\u00a0\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Having worked for and with hundreds of manufacturers over the past 3 decades, I can tell you that the majority of shops estimate by knowledge\/experience,&hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18],"tags":[13,12],"class_list":["post-58","post","type-post","status-publish","format-standard","hentry","category-estimating","tag-fabrication-quoting-software","tag-machining-time-calculation-software"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.2 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Is Manufacturing Cost Estimating Software Investment Worthwhile?<\/title>\n<meta name=\"description\" content=\"Learn how a quoting and estimating software investment can save you time and money and be worthwhile for your company.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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