THE KEYS TO MORE PROFITABLE JOB SHOP ESTIMATING

Why Fast Quoting Delivers Better Business Opportunities

To help job shops understand how to support the changing needs of part buyers, Paperless Parts surveyed more than 400 part buyers on their preferences for finding, selecting, and working with job shops.

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It was once OK to let RFQs pile up for days and get to them when you could. Buyers were patient and willing to wait to see who would come in with the best deal. Not anymore. With today’s accelerated business climate buyers increasingly expect on-demand services. OEM’s are facing increasing demands for flexibility from their own customers yet no longer are willing to keep large parts inventories on hand. When their plans change, they need parts in a hurry and the shops that can respond quickly with a quote and a short lead time will win the work, and perhaps at a better margin. The slower shop can lose the opportunity before their quote even gets off the estimator’s desk.

How do we know?  Paperless Parts’ 2020 survey well documents changing buyer behavior that is increasingly focused on the value of time. It also reveals a range of other factors job shops need to understand to successfully compete in today’s fast moving supply chains. Here’s some of what they learned.

Why Faster Shops Get the Job

 

67% of buyers expect a quote in less than 24 hours. Only 6% are willing to wait longer than three days.

 

The Paperless Parts 2020 Part Buyer Expectations study offers a number of eye-opening assessments of what matters most in the custom parts manufacturing market. For example, 33% of buyers said they expect a quote the same business day and another 27% want it within 24 hours. Some (7%) even expect it in less than an hour. Only 6% are willing to wait a week or more.

What many shops may not realize is that this need for speed has led nearly half of buyers to use sourcing networks such as Xometry and Fictiv, and increasingly more are using on-demand parts manufacturers such as Protolabs and Fast Radius. Some of these services can provide instant quotes right on their websites and ship parts the next day. Moreover, 92% of buyers are willing to pay more to get parts faster and a surprising number of them can pay with a credit card.

48% of both prototype and production buyers always or often send RFQs to sourcing networks and 18% are doing so first when they have an urgent need.

The good news for most job shops is that, all things being equal, most buyers would still rather work with a local supplier and 68% of them look for local shops first. There’s a great opportunity to land more jobs and get paid quicker, but only for the shops that can perform.

A significant trend in recent years has been for shops to be more selective in the jobs they bid on in order to seek more profitable work. However, this market acceleration dynamic is turning that conventional wisdom on its ear. According to Gardner Intelligence’s Top Shops survey, the most profitable job shops actually have a lower quote to win ratio. That means that the shops that can generate more quotes at desired margins gives them a better chance to land more of the work they really want.

2020 Part Buyer Expectations

Paperless Insights: Survey Report

How to Accelerate Your Quoting Process

To execute this accelerated quoting strategy will require most shops to change their methodology on how they go about estimating. The point is not to spend more time quoting, but to become more efficient at it. This is where Paperless Parts comes in. The company’s Sales and Quoting Platform is a web-based application that enables shops to generate accurate quotes in an astonishingly short period of time, and also facilitates manufacturing team collaboration in order to get jobs into production more quickly with fewer information-related mistakes.

part features

Paperless Parts automatically identifies the features of a part based on the specific manufacturing process required to make them. See full size image.

 

How do they do it? Many shops store their completed estimates in cabinet drawers, ERP systems, or shared drives. These archives are difficult to search, and impossible to search quickly, which often renders them useless in preparing new estimates. With Paperless Parts, previous estimates are stored in a database that is searchable by individual part features.

If a RFQ is sitting in your inbox for more than 3 days, you’re better off prioritizing other, more recent requests.

Customer Story

Black Mountain Manufacturing

Jonathon Friedl, Founder of Black Mountain Manufacturing in Colorado, shares his experience with Paperless Parts.

Secure Communication and Collaboration

Paperless Parts also serves to securely streamline communication throughout the quoting process with customers, your internal team and vendors in an ITAR compliant system. Customers upload files online through a Smart RFQ Form, and your estimating team then sees the RFQs in a quote management dashboard.

parts collaboration

The Paperless Parts platform enables real time collaboration in a completely digital environment. See full size image.

 

Online file viewing and shop configurable manufacturability analysis means your team can quickly assess the fit of a potential job. If there are questions, anyone involved in the process can open a simple, secure chat to the team and provide traceable feedback to customers. Getting the right answers quickly keeps the process moving forward. Gone are the sporadic disruptive interruptions to engineers during production or that walk across the shop floor to have them review files and provide analog feedback that gets written on the side of a drawing.

Centralized Repository

Paperless Parts tracks the status of all RFQs and estimates in the system, which helps provide better customer service. That eliminates lost RFQs and angry customers who have been waiting days for you to respond.

By being able to see all your RFQs at once, you can be strategic about which jobs you should quote first or at all. You can see your actual win rate overall and by customer. On outstanding quotes, you can see what has been viewed, accepted, or rejected. Combined, these insights help you run your quoting process more efficiently.

Online Customer Interface

Meeting customer expectations often leads to more opportunity. With the Smart RFQ Form and digital quotes, your customers can now request a quote, review your response, accept that quote, even pay online. In addition to the significant reduction in staff time, this makes it easy for shop owners to track all RFQs at any time, from anywhere, and deliver a secure, professional, modern experience to every customer.

lead time vs price

The system can display custom expedite options to the customer that provide options on lead time vs. price. See full size image.

 

Paperless Parts has modernized the quoting process. It provides the structure to improve your shop's ability to estimate faster with more confidence. It improves the quality and quantity of your quote response and enables your best people to spend more time improving production efficiency and less time estimating.

For more information please download the The Paperless Parts 2020 Part Buyer Expectations study or visit Paperlessparts.com.

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