This edition of Precision Matters continues our detailed examination of estimating as a business process. ;e previous edition
(“Job shop estimating: Getting ready for public
disclosure,” ;e FABRICATOR, October 2013, p. 76)
discussed the estimator’s role in the presentation
of price quotations.
At this point the estimator has delivered a completed price quotation to customer service. Customer service, in turn, will present the bid to the
customer. With the estimate delivered, how do we
evaluate the estimator’s performance?
For the sake of discussion, we’ve dissected the
estimator’s job into a dozen tasks. In reality, these
tasks may overlap or evolve in di;erent sequences.
As a review, here is a brief outline of how we’ve dissected an estimator’s job:
1. Process identification
1. Process identification
2. History retrieval
3. Compatibility check
4. Work order prep
5. Time study
6. Material planning
7. Fixtures/special handling
8. Costing
9. Pricing
10. Presentation
11. Review
12. Optimization
Pop Quiz
You may recall the pop quiz using Figures 1a, 1b,
and 1c from the October article. We completed a
price estimate of $3.97 each for a batch of 10 of Figure 1a parts with a delivery promise of within 10
days of receipt of order.
;is month’s pop quiz is to requote the project,
but this time in a batch of 30 with delivery in four
weeks after receipt of order. Meanwhile, let’s evaluate how well our estimating system is performing.
The Good, the Bad, and the Ugly
When considering how to evaluate the estimator’s
performance, our objective is twofold. First is the
well-being of the job shop, and second is the delight of our customers with our service. We want to
encourage behaviors that support those objectives
and eliminate activities that have no value to the
customer.
Perhaps an example of less-than-stellar behav-
ior would help to illustrate the point. When the
job shop installed its first turret press, the general
procedure called for nesting as many parts on a
blank as possible for maximum material utilization
and e;cient use of tooling setups. A procedure
emerged in which the estimator routed the RFQ
;e downside of this procedure was that not all
RFQs turned into production orders. As a result, a
fair amount of CNC programming resources were
tied up on dead-end e;orts. ;e upside was that
when the quantity on the nested blank matched
the quantity that the customer needed, good pro-
duction e;ciency was achieved.
Time has passed since the turret press represented new technology in the job shop. Customer
attitudes toward inventory have evolved as well.
Bu;ers of idle inventory are deemed to be undesirable. ;e emphasis now is on matching the nested
quantity to the ideal batch size for the customer. In
some cases, the batch sizes are very small, and the
deliveries are very frequent.
What we need to change in our (hypothetical)
estimator’s procedure is the method for estimating
the nested quantity and overall material utilization.
Instead of requiring that CNC prep decide what is
“e;cient” using criteria based on setup time and
nesting on an arbitrary blank size, we need to drive
the CNC nesting plan using the customer’s demand
and the estimator’s provision for setup (practice)
parts.
Involving CNC prep in the estimating process
might improve accuracy when it comes to estimating material use and cutting time. However, CNC
prep is vital to production and is just sort of helpful to marketing. In this example, it might be a better policy to place less emphasis on certainty; take
CNC prep out of the estimating process and simply
have the estimator approximate the blank size and
nesting plan to the nearest square foot instead of
square inch. ;at way we end this specific example
of a well-established estimating procedure that
may be causing unintended consequences.
Hard to Spot 800-lb. Gorillas
With the thought that good procedures can go
bad over time, our review of the estimator’s performance should point out the obvious. One might
expect that frequently occurring problems would
be hard to ignore. Not so. Problems with procedures are easy to overlook. ;at means that our review process must be refreshed and retargeted on
a continual basis.
If we are wasting too much of CNC prep’s time,
the reporting system could be targeted to tell us
that. If customers are unhappy because we are
forcing them to accept delivery of large batches of
parts, our review system should catch that.
;e key is to have a clear vision of what the estimator’s ideal performance should be. It is helpful to
hear complaints as well. Although we don’t particularly want to reward people for complaining, we
do want to be mindful of wasted e;ort, needless
friction, or other overlooked factors—the 800-lb.
gorillas lurking around that are being ignored.
In our bad example, the throughput of the shop
was limited by a bottleneck in CNC programming.
If that means the estimator should approximate
the material usage instead of perfecting the material usage, then establish a reporting system that
verifies that the estimator generally is predicting
the material utilization within an acceptable tolerance without the need for tying up CNC prep in
the process.
If the estimator is clueless about getting this detail right, then perhaps more training or perhaps
more involvement with CNC prep for a short term
is a good change to the procedure.
How you implement the review system is a matter of circumstance. In this example, a time log for
CNC prep along with a review of how that time is
spent could result in a clear plan of action for improvement in use of personnel.
Job shop estimating: Control and feedback methods
Step 11: Review with an eye on improvement
Precision Matters
Gerald Davis is a job shop consultant and chairman of the board of DSM Manufacturing Co., gerald@glddesigns.com.
Figure 1a
;is L-shaped bracket is something any shop can make
with basic metal fabricating skills and tools.
Figure 1b
;is bracket has tighter tolerances than the part in Figure
1a. As a result, it probably will require advanced metal
fabricating equipment to produce.
Figure 1c
;is bracket has features that can be created only with
the use of tooling in a stamping press.
