Quoting question

How do you quote a part? I've seen computer programs that take into account every single little detail and spit out a time. Then there are guys who seem to quote by "guess and by gosh, what can I get out of this". Where do you fall on quoting scale?

Charge high but charge for service given.

I use to make the part in my head and put the times down I felt each operation would take. Cutting the stock up, first op rough and finish...next op the same and so on. Tooling disposables cost and used or percentage used. fixture made ? it's cost material and labor. I found myself coming out on the short end on a lot of jobs. So I started using a multiplier adding 5% on to each job. I kept adding 5% until I found saturation at 1.30% and optimal of around 1.28 % when I started 1% back offs

I solved two problems...the jobs I was losing money on went else were,,, and I made the same amount of money working a lot less hours.

There are customers and there are CUSTOMERS . I had one of these customer that demand a lot of paperwork, priority's, and horrendous inspections. A lot of their works labor is in the inspection an paperwork. They pay for that miscellaneous work. As it sometimes cost more than the part. No shortcuts you play by their rules, and they pay by their rules.

I have now a few purchasing agents that send me problem parts that I do not have the equipment to make. They are paying us to find a vendor to do the job and handle all the site inspection and certification of the vendor. The last one was billed out at 6k and our cost was 2.8k plus about 6 hrs of inspection and paper work.

I expect this same customer to send me to the east coast in a few months, that will cost them about 5k just to get me there and back plus the report and evaluation time.

Quoting a part can be tricky if you are unknown to the buyer. Sometimes they will be reluctant to give you a job based on you shop size........you need to convince them that you, beyond what their first impression was, are fully capable of doing their work precisely and in a timely manner.

On time rules.

Steve

A lot depends on quantities being made, and whether real shortcuts can be made in streamlining production. But for one-off jobs, I tend to quote in half day minimum or full days if some cad work, some cam work and machine setup is required. Wasting time figuring out only machine operation time with great precision is just another waste of time designed to benefit the customer and not the producer.

My method - there are many variables, so this is the very basic version.

For an all in house job;-

Set up time $ / # pieces
+
Special tooling $ / # pieces
+
Fixturing $ / # pieces
+
Machining time $, per piece
+
Washing, packing etc etc $ /# pieces
+
Clean up & waste disposal etc $ / # pieces.
+
10 - 15%

Sub total

Then add on Material $ - length, plus machining allowance, plus 10% (don't forget shipping)

Note 1, if material costs more than work done on it, increase labour price.

Note 2, put quote aside and ''let it settle'' before submitting.

That's built in to my hourly rate.

I take what Limy Sami does but have a variable hourly rate. Jobs that eat tooling and require constant offsetting get billed double per hour of the ones you can load a bar and not check it 8 hours later. Also on those high maintenance jobs I multiply up the run hours to allow for downtime. I charge for everything from program, set-up, run, deburr, packing. The low skill work gets billed at a lower rate also.

Dualkit said:

I take what Limy Sami does but have a variable hourly rate. Jobs that eat tooling and require constant offsetting get billed double per hour of the ones you can load a bar and not check it 8 hours later. Also on those high maintenance jobs I multiply up the run hours to allow for downtime. I charge for everything from program, set-up, run, deburr, packing. The low skill work gets billed at a lower rate also.

Click to expand...

Is the low skill work being done by a low skill worker, or a high skill worker?

I had to do a double take on the date of post #1. I'm not even here that much and I know I've seen this come up multiple times. Searching this forum for "quoting" in the thread title generates 15 results, here's just three that seem identical or at least very similar:
http://www.practicalmachinist.com/vb/shop-management-owner-issues/quoting-work-how-do-you-do-218165/

http://www.practicalmachinist.com/vb/shop-management-owner-issues/quoting-question-180947/

http://www.practicalmachinist.com/vb/shop-management-owner-issues/quoting-jobs-208021/

I generally go with:

Limy Sami said:

Well it's like this - first ya need a few things.

2lbs ground male Unicorn left rear femur.

2pints 15Y/O female virgins urine.

1st class honours degree in scepticism.

A wooden spoon made from a twice lightening struck hickory.

Moon phase and tide tables for 1492 - (some use 1497 but I stick with '92.)

New York City subway timetable for a leap year.


Stir that all up in an unobtanium pail using a counterclockwise action, add as many years of experience you can to thicken.

Take large spoonfull and chuck it at the wall.

If it sticks, ya get the job and make a profit.

Click to expand...

I'm a "what the market will bear(bare?)" guy.

After years, you can just look at some thing and peg a price to it, its pretty scary how accurate you can be.

First thing when a quote comes in, customer.... where else are they going for this?

Second is "fear factor". the scarier it looks, the more money I can make. Example, a part with 4 dimensions looks easy, but there are 4 digits after the decimal.
That will go low since some ass hole in a suit will think its easy, because they can understand it. A print that is 5 or even 20 pages with 100's of dimensions may actually
be quicker and easier to make, and may easily pay 10X as much due to the "fear factor".

Third is... who is the print from, is my customer competing against 5000 people, 500 people or 5 people?

Then I'll actually really look at the print.

My business partner here, about 12 years back he made himself up a nice little spreadsheet for quoting, (machine only). He didn't really know what the hell he was doing
when he did it, but it was pretty cool. It was based on total # of dimensions, plus the # of dimensions that where less than ±.010 times a multiplier, plus the # of dimensions that
where less than ±.005 times a bigger multiplier, plus the # of dimensions ±.001 times a multiplier.... etc, multiply all that times the price of tea in china, and he came out relatively accurate,
especially for castings where there was really no hogging.


I'm not a price snob, though I sort of am. I'll run stuff at $20 an hour for a good customer, as long as its sitting over there in the corner chugging away, not eating tools and I only
have to occasionally deal with it.

Whole science behind it.......

Betcha never heard of THERBLIGS.....back when the good 'ole USA was inventing manufacturing and showing the world just how to do it.

Therblig - Wikipedia, the free encyclopedia

I first read about them 25 years ago in a 1940's Machine Shop text book.
Sometimes I quote with a sharp pencil, sometimes I do it the dumb way.....I look at the print and think what it looks like it should cost. Sometimes the customer ends up paying $10 for a $1 part that way, but life's a bitch sometimes too....

I use this spread sheet that is modified from something I downloaded.

when I get a pile of drawings to quote with various quantities, I figure out material cost per piece. Then I take the pile of drawings and look at everyone of them right before bedtime, might write a few numbers in the corner, then I sleep on it. Usually a few ideas come during the night that solve a few issues or ways to get it done faster, assuming I don't have any nightmares about it. I figure out the rest of it from there on. I don't have any spread sheet or anything, I just write it down right on the drawings, make my tool list and what ever else on there at the same time. It's worked out fairly decent so far, some I end up a bit under if I get picky, some I do better on, overall it seems to average out.

"Therbligs"! Never heard of it, but I've thought about it. Watching a waitress working in a restaurant, for example, I think of all the arm and leg motion required to run back and forth to the kitchen versus the $ per hour they get, and they really don't get paid much per therblig. It feels good to know what the units are called

But the same thing sure happens in the machine shop if you're not careful....or maybe it is unavoidable and you're just not keeping track.

Damn, that picture of Turbo's blew off my screen

Factories had (have?) time study departments with people (prolly cameras now) watching floor workers
and studying their movements using Therbligs.
That might all be politically incorrect now, if the unions haven't made it totally illegal.

Yes, waitresses do burn calories and put on the laps in a shift.
Don't quite understand the heavy ones....maybe they take frequent 'pit stops' in the kitchen??

Rule # 2 of quoting - its easier to do with some sort of history, saves you from quoting something you have no chance at . Rule #1 - develop the knack to get what the market will bear.

I make special tooling and fixtures and other one offs. My shop rate is $50/hr.
These value are not for production work.

For rectangular work if figure 3/4 to 1 hr to cutoff a small piece and machine it square.
Drilled holes under 1/2" in diameter and 1/2" deep are $5 each
Holes under 1/2" that are tapped or counterbored are $8 each.
Holes over 1/2" cost double.
Holes deeper than 1/2" cost double
Holes smaller than 1/8" diameter cost double
Bored holes are $50 for one bored hole and $25 each additional hole.
Milled slots and notches roughly $25 each
Ground surfaces extra.

Quoting Lathe work is generally guess work base on experience.

I add up the cost of all the features then add 20%. I call that profit. If the profit is greater than 20% the quote was too high and below 20% the quote was too low.
In most cases when the job was complete I was darn glade the 20% add on was there. Never exceeded the 20%
Jim

"A quote is an educated guess"
I can't remember where i heard/read it, but that is certainly true.

It takes an advanced machinist AND accountant in the same person to come up with an accurate price.
That is, a small shop owner

I do a lot of 1-10pcs runs, and most of them have to be quoted first.
I'll start by thinking all the operations and tools needed to complete the part. Then i'll see what materials are needed to
complete the part and special fixtures.
Do i need any fixturing allowance on the stock?
Do i need special tools or attachments to my machines?
Do i have to sub out some processes?

Then just counting hours with a "gut" feeling, and if the part seems troublesome, just multiply the total hours with some factor.
This is something a person without machining experience can't do. That little hole or simple looking slot somewhere in the part
might mean a lot of extra time fixturing or cutting.

Actual time making the part usually varies quite a bit from the quoted. Sometimes i end up working 20eur/h,
sometimes i've ended up making 150eur/h while machine spits out parts with a bar puller and chip control works perfectly...

Actual time making the part usually varies quite a bit from the quoted. Sometimes i end up working 20eur/h,
sometimes i've ended up making 150eur/h while machine spits out parts with a bar puller and chip control works perfectly...

Click to expand...

It is these type of results that keep me wondering if I even have the slightest clue of what I'm doing.

Dave K said:

It is these type of results that keep me wondering if I even have the slightest clue of what I'm doing.

Click to expand...

That's quite normal Dave, you're doing just fine

Seriously;- If somebody tells me they never lose money on a job / screw up / always make more than they thought, I say they're full of s***

I usually quote on what I guess it would take - usually in the form of 5/hour or something that is easily understood add the setup time new stuff is usually half to full day - old stuff is 3 hours, or if something I have made similar for them: use those numbers. Sometimes I take a look at it and guess by how much material needs to come off. If it looks not easy to do it can usually be added by 50% so its usually - those jobs I like to do, cause everyone is very happy I do them no matter the price. Sometimes you lose but just make sure your win to loss ratio is high, it is VERY important that you can evaluate this is some way. May shop expense rate is around $60 so I want around $100 to weather though the bad times and have growth in the good times.