A New Quoting Model?

A New Quoting Model?

Anyone actually enjoy quoting? For such an important part of daily business the process of establishing prices to offer a customer seems universally disliked. I first got drafted into “estimating” almost 40 years ago; my mentor was months away from retiring and no one else in engineering wanted anything to do with such a politically dangerous activity.

The stress had definitely taken its toll on the incumbent. While smoking was allowed at your desk back then, few people needed three ash trays to accommodate the number of cigarettes they  usually had going at once. There were no cubicles, yet he had a certain amount of privacy because of the massive collection of notebooks, catalogs, and reference binders he needed to use. Computers were for accounting departments; we were thrilled to have calculators with trig functions.

I was trying to write gear rating software for a desktop calculator at that time and the chief engineer thought I should “mechanize” all those reference books so “anyone” could quote new jobs. Even the new “engineering computer” with both upper and lower case text was not up to the task; you just couldn’t get enough code on a ten-inch-long strip of magnetic material.

Fortunately, computers have gotten so much more capable. The initial spreadsheet packages proved to be excellent for estimating, and my personal “book of knowledge” has continued to evolve. Still, there are aspects of the quoting process that require an informed and experienced hand hovering over the keyboard. Giving sophisticated software, be it design or estimating, to rookies is a recipe for disaster.

There are many ways to come up with selling prices. One very successful boss would return from customer visits with purchase orders and drawings; our assignment was to find a way to make the parts for the price he had negotiated and still keep the doors open and the lights on. It was almost exciting enough to make a guy take up smoking!

The boss was fond of saying “The market sets the prices; your costs determine whether you get to stay in the game.” He was right about that.

So what is your plan to stay in the game? Should Gear Technology be publishing features on the business side of the trade?

Categories: Gear Talk With Chuck

About Author

Charles D. Schultz

Charles D. Schultz is President of Beyta Gear Service and one of Gear Technology's technical editors.

Comments

  1. rittik_c
    rittik_c 13 August, 2017, 01:25

    It is a great challenge now to stay afloat in business with competitive qoutes in developing nations where it is only the price that matters due to economic downturn and other reasons.
    Big corporations which operate in these markets are under extreme stress to sell their products though they may be better designed and manufactured.
    Hence, it would be welcome to include real stories from which we could draw inspiration and learn to deal these tough times.

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