How Shops Can Win Big Contracts with ROM Estimates
With 20+ years of experience providing product development and manufacturing services, our team at Polyhistor knows what it takes to transform rough ideas into finished products.
Still, when a potential customer came to us with a big job and asked us to create a rough order of magnitude (ROM), we needed a stellar quoting solution to produce an accurate estimate and help us win the contract.
Overcoming the Challenges of Quoting Manufacturing Jobs
A quote is the manifestation of the value exchange between customers and manufacturers—and it’s critical to keep both sets of needs in mind.
Shops have two conventional paths forward when a prospective customer requests a ROM:
- Estimate only one phase of the project at a time (either engineering, prototyping, or production) to mitigate and minimize as much risk as possible. This is the safest approach but not always an option for larger customers with a lot of leverage. If you want to win the business, you may need a provide a full quote up front, which leads to option #2…
- Quote everything and hedge your bets, hoping you provide an estimate that makes the job profitable in the end. The trouble with this approach is that there are so many unknowns that it’s hard to quote a price that’s fair to both customer and manufacturer. There’s too much uncertainty in the mix.
Delivering quotes can be nerve-wracking when there’s so much at stake. You know how it goes: Quote the job too high, and you might lose the bid; quote the job too low, and you might cut into your profit. With every proposal, there’s the risk of missing out on money.
Complicating matters further, many shops are working with the same systems that have been around for years—often using one or more spreadsheets to run the numbers. This heavy load of administrative work only adds to the pressure of managing a business.
Fortunately, cutting-edge quoting technology offers an improved path forward. I’m not singing the praises of Paperless Parts because I’m a customer—I’m doing it because their software can help fellow product developers confidently bid on large, multi-phase projects that move from engineering through to high-volume production. And that ability has transformed our business.
How to Win Bigger Contracts with Product Development Services
Recently, my shop, Polyhistor International, had the opportunity to bid on a substantial project. There was only one problem: the design wasn’t fully fleshed out. What we did have were a few critical pieces of information, including the design envelope. We knew the approximate size of the product and had information about electrical connections.
As an aside: if your shop is considering using ROM estimates to bid on bigger contracts, make sure you begin with adequate information. Paperless Parts is a great piece of software, but it’s not like waving a magic wand. These are the critical pieces of info you’ll need to have in order to quote anything from engineering services to production at scale properly:
- Design envelope
- Material type
- Finishing operations
- Basic idea of major part features
- Integrations (e.g., electrical connections and their rough locations)
- Information about the part or product application
With these minor details, our team of experts was able to do some rough engineering work to determine the number of setups, necessary materials, and internal space requirements. We had a more accurate understanding of the project, and we used Paperless Parts to give us the final quote for the job.
This customer required us to quote the entire job in one shot—something that would have been extremely difficult to do with our old methods. But we leveraged Paperless Parts to expedite our quoting work and, more importantly, generate accurate numbers that we felt confident about. That confidence is such a big component of building trust and credibility.
The result? We got the job and were awarded a contract to manufacture items for a Department of Defense application.
Winning DoD contracts and other major jobs can be transformational for smaller shops, providing the bump in revenue to invest in new equipment and more staffing. We’ve experienced firsthand the benefits of accurate, confident quoting and are excited to see how our business continues to grow as a result.
See how Paperless Parts can help your shop overcome quoting challenges
This article was written by Peter Schönning
Peter Schönning is the founder and president of Polyhistor International, Inc., a Florida-based product development and engineering design firm with expertise in rapid prototyping/3D printing, low volume, and mass-production.