Many shop owners know but turn a blind eye regarding the inconsistency of quoting by the estimating team. I did for a long time until we ran an experiment that forced me to take the first steps to making RAPID’s quoting more consistent.
Here is the experiment. Pick ten parts that your estimating team has not seen before. Make the parts a general representation of parts your shop manufactures. Simple to complex geometries. Standard to tight tolerances. One to six or more setups for machining. Three to at least ten operations for sheet metal and fabricated parts. Rectilinear to complex surfaces. Unfinished and plated with masking. Now have each estimator quote the parts independently. Create a spreadsheet with the results.
If you have three or more estimators, it is highly likely that there will be more than a 50% difference in the high and low price for at least three parts. With six or more estimators, almost all parts will show that gap. As an aside, what I have seen is that the total price for all ten parts will not be far off estimator to estimator. That is why buyers often cherry pick parts off a quote – they know there will be some parts estimated incorrectly.
The result is not your team’s fault. Every estimator does the best they can within the time constraint they have to quote a part. Experience is a large driver of the final price. But we are human and other variables matter. How much sleep did they get the night before? Early in the morning before coffee has kicked in? Problem at home distracting them? A huge backlog of RFQs awaiting their attention? All these make a difference. In fact, give them the same parts three months later and have them quote again from scratch – the numbers will be different!
You might be thinking, “Great, Jay, thanks for giving me something else to worry about!” Well, there is something you can do about it. Automate your quoting. Partially or fully. Automation takes away the drudgery. It lets the estimators focus on the uniqueness of each part, even if they are not at their best that day. They will be more likely to spot the “Gotchas”. They will have more time to talk to someone in the shop to ask “How will you tackle this feature?”.
Innovate, automate or evaporate. What path are you choosing?
If you are ready to give your estimators the structure and automation for your quoting process, signup for a demo of Paperless Parts today.
– Jay Jacobs
Jay Jacobs is a co-founder of Paperless Parts. Formerly, he was the founder and CEO of RAPID, a CNC machining and sheet metal shop that grew to $50M in sales and was sold to Proto Labs, Inc. (PRLB) in 2017 for $120M. Today, Jay is a champion for American manufacturing and is working through Paperless Parts to enable job shop owners to compete in today’s increasingly digital and web-based business world.