Stop guessing about estimating and quoting software

Modern Machine Shop, Feb, 1993 by Jitendra Bavishi

Whether a shop loses money or makes money on a job is often determined, not on the shop floor, but in estimating and quoting. Software that automates these critical functions makes a winning outcome more certain.

Estimating is a critical phase of manufacturing. It is the beginning of profitability, customer service, quality, and competitiveness. It can be the most important phase in the growth of business. High estimates can lose customers; low estimates will lose money. Neither is acceptable.

Ask three people to quote a particular job manually and you'll get three different quotes. Manual estimating is nothing more than applying an estimator's knowledge. If what the estimator thinks about a material, a machine, or a process is wrong, then the estimate is wrong.

However, an automated approach can provide repeatable and accurate results. Well-designed estimating software is flexible, improves reaction time, brings consistency to the process, and can give both large or small manufacturers or job shops a definite competitive edge.

Today there are two types of estimating packages available:

* Estimating software that addresses very specific markets. These may be designed just for turned parts, or perhaps for castings, or a particular type of lathe.

* Estimating software that is generic, in varying degrees. These may permit or require the user to enter machines, speeds and feeds or even machine characteristics such as horsepower.

Not surprisingly, most of the estimating software packages available today began in the same way. Typically a job shop or manufacturer was manually estimating every job and it was swamped with quotes. As these companies grew dissatisfied with all of the guesswork involved in the manual method, they also became aware of the need to ensure a level of consistency. The only way to do that, and at the same time to improve reaction times, is to use the computer.

When these companies went looking for software, they found few systems that met most of their needs, so they developed their own. Eventually, these creations were offered as commercial products to other shops. These systems, however, vary widely, often reflecting the special needs and interests of the companies that developed them. But the important point is that estimating and quoting software for the medium or small job shop is available today at reasonable prices.

The Need For Consistency

For most types and models of machine tools, both the machine-specific and the generic estimating software will provide a standard machine database. If users have more or different equipment, the appropriate data can be obtained from the manufacturer or from plantfloor observations. This information is then entered into the database. Each shop is different, but standard data, such as index time, rapid travel rate, gear charts or spindle speeds, come from the machine manuals. From their own shop experience, each user of estimating software determines handling and idle times, machine hour rates, department efficiency, and some of their shop techniques. It may take two or three days to gather and enter these specifications into the computer system, but once entered, they're stored forever, or until the user makes the change.

Many estimating software packages are modular. If you have standard machines, you may select a module that has most feed and speed combinations--there could be over one million combinations. But you may still have the ability to change any of the feeds and speeds, a very important feature today. Look at any machinist's handbook. It gives only one set of feeds and speeds, regardless of whether the work will be running on a heavy, 2 5/8-inch screw machine, or a small Swiss screw machine.

Feeds and speeds do vary, but the books do not offer the range of choices. That's what's practical about automated approaches to estimating. A knowledge-based system can build in the flexibility that reflects a shop's own experience.

Estimating software makes it possible to equalize engineering standards with the shop standard. Once engineering and shop are at the same level, forward movement is possible in every area. Often, without it, finger-pointing continues, inefficiencies remain, cost over-runs flourish. Success depends upon the shop's comfort level. Shop personnel must be assured that their feedback is going to be used, not just on the next job, but consistently.

To establish this relationship, engineering must be able to show what it is using. And the shop must continually inform engineering when conditions change with a particular machine. It is not a one-way street. Each and every factor must be calculated, including the factory efficiency factor. All those factors should be built into the estimating software as provided by the user during initial setup.

The Value Of Estimating Software

Generally, when a shop receives a customer drawing, the quote covers several quantities: a few prototypes, 100, 500, 1000, 10,000, or a million pieces. Under the manual method, each estimate must be approached differently. This takes a long time. There are two approaches to handle this situation with software.