Job Shops Lose Big Time without Effective Cost Estimating
Job Shops Lose Big Time without Effective Cost Estimating
"We pretty much live and die by our quotes down here, competing for every job," says Carroll Machine Works' (CMW) owner and chief estimator, Wayne Carroll. "Some parts cost $10,000 or more. We had better be estimating accurately, or we lose, big time."
Texas-based precision machine shop responds to about 150 RFQs a week with many customers demanding a response in two to three days. A computer-aided cost estimating system has increased speed by 50% 80% (versus manual), boosting the company's ability to respond and its chances of winning jobs.
At Carroll Machine Works (Pasadena, TX), the ability to produce cost estimates quickly and accurately is a matter of survival. To win jobs from customers that include NASA, aerospace companies and a variety of petrochemical, oilfield and gas industries, a precision machine shop must respond to an average of 150 customer RFQs per week.
After reviewing computer-aided cost estimating options, he purchased the Costimator System by MTI Systems, Inc. (W. Springfield, MA). The program includes a comprehensive database of proven manufacturing data and knowledge gleaned from a variety of sources.
Bidding With Confidence
Carroll says that the Costimator virtually eliminated "losers," jobs that cost more than estimated. The system's speed 50% to 80% faster than detailed manual estimating also boosted estimating department output. The Costimator paid for itself in months, adds Carrol, who has tailored the system's standards and machine times.
The company feels that it can now bid jobs with total confidence. "When customers come back and tell me they can get a better deal on a part from someone else, it's a lot easier to resist the temptation to re-bid the job lower," Carroll explains. He adds that machine times generated within the Costimator routings are electronically transferred to the shop's scheduling software, improving the management system's accuracy and further increasing company efficiency.
MTI Systems is the leading provider of innovative cost estimating solutions for manufacturing, working with OEM's and Suppliers worldwide.
MTI Systems for OEMs:
OEM's worldwide use Costimator OEM to identify and understand the cost drivers in the parts they design, manufacture, and procure. This invaluable information enables them to reduce product design and manufacturing costs in all phases of the product development lifecycle. Engineers are able to design products that meet cost targets while purchasing can negotiate optimal pricing based an understanding of what a part should cost.
MTI Systems Should Cost Estimating Services division was formed in 2007 to meet the ever growing needs OEMs looking to outsource their cost engineering requirements. MTI engineers, utilizing their extensive costing expertise and the company's Costimator OEM software, provide detailed part cost analysis that identifies cost reduction opportunities at design and production.
MTI Systems' cost estimating technology and service covers hundreds of manufacturing processes including machining, fabrication, plastics, electronics, and assembly and is able to estimate parts manufactured in the U.S. and abroad. Dependable cost data enables OEMs to hit cost targets and product launch dates, reduce the need for time consuming re-designs, lower part costs, and increase profit margins.
MTI Systems for Suppliers:
Costimator JS provides job shops with an easy-to-use, fast, accurate, and consistent method to estimate cycle times and costs for quoting purposes. This enables them to:
Optimize their ability to win profitable contracts.
Increased RFQ "Win" percentages
Reduce Non-Profitable Jobs
Optimize Profit Margins
Reduced estimating time
Increased quoting throughput
MTI Systems is proud to have implemented its products and services at over 1,200 companies with over 10,000 trained users since its inception in 1982.
MTI Systems, Inc.
www.mtisystems.com
David LaJoie
david.lajoie@mtisystems.com
VP Sales & Marketing
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