Cost Estimators, Do You Feel The Need for Speed?
Why Cost Estimators feel increasing pressure for speedy results
In the 1986 summer blockbuster movie “Top Gun”, Tom Cruise (aka “Maverick”) announced to his buddy Goose – “I feel the need, the need for speed”.
In the world of manufacturing, this sentiment echos up and down pretty much every hallway. Competitive pressures are forcing product development teams to design, source, manufacture, and ship products to market in a fraction of the time they had available even 5 years ago.
For Suppliers to large OEMs, one of the biggest time crunches they face is generating highly detailed quotes in response to customer RFQs as fast as possible. In many cases, “first in, first to win” is the dominant strategy. But, this is no easy task.
Need for Speed + Manual Cost Estimating = Mistakes
Suppliers have to balance speed with the risk of making a mistake on their quote. In a worse case scenario, they make a mistake where they submit a bid below the actual cost to manufacture the product – and then they win the business! For companies that use manual cost estimating systems and strategies, this happens far too often.
In the video clip below, Cost Estimator Kristy Allen of SFI answers a question along this line at the recent Cost Insight Product Cost Management conference in Orlando, Florida. She describes how using automated product cost management (PCM) technology helps them avoid this potentially fatal mistake.
Should Cost Negotiations Require Detail
The other challenge associated with trying to accelerate the response to an RFQ is providing an adequate amount of detail to justify the bid you are submitting for consideration. In a rush to win, many suppliers will use a “similar to” strategy, and grab a quote from a project they worked on in the past to guess the approximate material, labor and overhead cost, and not include much details beyond that.
What happens if the customer comes back, and wants to drill into the details?
Once again, Ms. Allen provides her thoughts around how the use of automated PCM technology enables them to have highly productive and detailed conversations with their customer around how they built up their final bid cost.
Accuracy + Details + Speed = Big Competitive Advantage
Imagine if you could possibly combine accuracy and the ability to avoid mistakes that are inherent in manual costing approaches PLUS provide a rich set of detail to support the bid price you submit AND you are able to respond to your customer’s need for quick turnaround to the bid?
Listen to Marc-Andre Patry, manager of cost estimating at Soucy, talk about the reputation that they have achieved after having implemented their automated PCM quoting solution.
Want to Learn More?
SFI, Soucy and other forward thinking suppliers that are trying to form more strategic partnerships with their best customers are leveraging product cost management technology to help them win more business.
To learn more about how this type of solution might be useful in helping meet your “Need for Speed”, follow this link for more videos, product demonstrations and whitepapers.
If you would like to schedule your own private demonstration of aPriori’s PCM Quoting Solution, please don’t hesitate to email us at firstname.lastname@example.org.