Is the Old Cost Estimating Method Costing You More?
There is nothing more disappointing for a manufacturer than wasting days or even weeks on a quote package just to discover that the work is not offered to you. What’s even worse is to learn that the reason for losing the job is late submission of a quote or offering a quoted price that is completely in contrast with the competition.
Many shops generate many quotations in a day. They might win 10 to 20 percent of what they have quoted if they are lucky. However, these shops do not have a structured system of producing quotations, and instead, they rely on their estimator’s expertise. Depending on your machine operator’s opinion or your estimator’s experience can turn out to be a risky and inconsistent way of producing costs that eventually determines whether you win or lose a job.
Regardless of your shop size, it would be best to look closely at how you estimate a project’s cost. Using an Excel sheet is an outdated method of cost estimation. There are several constraints to it, such as multiple people cannot use it at the same time, and it is not database driven. Whereas the modern manufacturing cost estimating software solutions have a cost-driven design and allow you to bid on projects more accurately and efficiently. Once fully configured, it can be used by individuals with less experience.
Achieve Optimum Results with Cost Estimating Software
It is crucial to keep in mind that the first quote often wins the job. As a result, it is not shocking that the shops that still guesstimate and do not make use of automated and more efficient cost estimating software are left behind.
What if you could take an OTS (off-the-shelf) cost estimation tool and customize and configure it with your estimators’ tribal knowledge and your company data (such as material pricing, work center shop rates, etc.)? This would significantly speed up the quotation process and produce more accurate and detailed quotations by providing the entire organization with a centralized process.
Today, a variety of innovative and progressive cost estimating software solutions boast features that enable you to determine the part cost and use automated dimensional information to further accelerate the quotation and cost estimation process. With a solid model and the best cost estimating software solution, a part that could take an estimator an hour to measure manually can now be achieved in a couple of minutes.
Profit or Loss
Whether or not your job turns into a profit or loss begins with accurate cost estimation. Shops that entirely rely on jobs or experiences are not very sure that the job will be profitable. Such organizations tend to pad the quote to mitigate the risk of additional costs, often leading them to lose the job they earnestly desired.
In today’s highly competitive business environment, the traditional cost estimation approach won’t cut it. Utilizing an all-inclusive manufacturing cost estimating software will standardize the quoting process and at the same time improve the company’s bottom line, giving the shops a clear advantage over their competitors.
