To be competitive, suppliers who quote parts, need to markup and add a price conscious shop rate to each process. To be most successful the most attractive shop rates need to be low, which encourages increased sales, however, to be truly successful, the profit (markup) needs to be large enough to qualify their business operating requirements.
Most manufacturing suppliers choose to use a flat (across the board) shop rate for all manufacturing processes. This can cause problems for manufacturers who have processes that are more or less expensive than other processes they offer.
Identify separate shop rates for each manufacturing process using Shop Rate Calculator. While manual calculation methods can identify unique shop rates, MTI Systems offers this free Shop Rate Calculator software to help manufacturers be more competitive. Quickly calculate separate shop rates, then over time, revisit the software to add new rates or modify existing rates as manufacturing environments change.
MTI Systems' Shop Rate Calculator calculates rates based on the inputs of direct labor, machine (work center) price, number of employees and gross sales. This information combined with eleven default factors including overhead costs and SG&A is used to identify individual shop rates for each manufacturing process.
Shop Rate Calculator helps manufacturers be more competitive by increasing their win percentage as well as offering increased profitability. Download this free Shop Rate Calculator and to see explore a data-driven cost estimating software please request a demonstration of Costimator.