Users Look At Computer-Aided Cost Estimating

In last month's column I discussed some of the advantages that computer-aided cost estimating offers to manufacturers. Accuracy and consistency are the main benefits described by those who manufacture computer-assisted cost estimating systems. But how about the users of these systems? What benefits have they realized from their investments?

I spoke to small business owners and managers who have implemented computer-aided cost estimating systems.

Chuma Ho of Magnet Sales, a job shop in Culver City, California, says his company began looking at computer-aided cost estimating systems because the company was losing out. "Our old way of quoting--human experience--caused us to either lose jobs through overbidding, or lose money through underbidding. Either way, we just were not competitive on many of our quotes." Since Magnet Sales began using a computer-aided cost estimating system, Mr. Chuma says the company is more competitive. "We are now more confident in the accuracy of the numbers and are much more competitive on jobs."

James Cline of H W Industries, a job shop in Melrose Park, Illinois, was somewhat familiar with computer-aided cost estimating systems when he decided to invest in one of his own. He knew that such systems integrated well with manufacturing systems and could provide assistance with documentation and control, areas that were important to H W Industries as it strove to achieve ISO 9000 certification. Mr. Cline cites the major benefits he has achieved from his system as "consistency and documentation features...we even use the system-generated router in our shop." Mr. Cline has been so impressed with the system that he is even willing to demonstrate it to anyone considering buying a computer-aided cost estimating system.

Ralph Vander Veen of Topcraft Metal Products, an automatic screw machine shop in Hudsonville, Michigan, cites speed, accuracy and consistency as the reasons his company initially looked into computer-aided cost estimating systems. "Initial quotes are quicker, but just as important is that requotes are done very quickly. Just changing a few numbers gives you a completely updated estimate." Using similar parts as a basis for new estimates is also a benefit to Mr. Vander Veen. "With everything saved on the computer, it's easy to reference existing jobs. In fact, the system will tell you if you have already estimated a certain type of part. This is a real time-saver."

Mike Williams, president of Alamance Machine Company, a contract manufacturer in Burlington, North Carolina, cites his main reason for exploring the computer-aided cost estimating option as "Compression of quote completion times." Mr. Williams says that his company was taking too long to complete their quotes. "This would cause us to fall behind and when a rush quote came in, we would make mistakes," he says. Mr. Williams found two major benefits to his computer-aided cost estimating system. "At first, the main benefit of the system was the reduction in the turnaround time of quotes. But we have recently found an even more important benefit, which is the accuracy of our quotes. As we have fine-tuned our database with more information, we are able to more intelligently calculate times based on how long things really take. Even our machine tool change times are measured accurately and loaded in our database. I feel more confident now about job profitability when I quote."

Keith Kuzelka of KSO Metalfab, a job shop in Streamwood, Illinois, initially investigated computer-aided cost estimating because of the need for consistency. "The customer gets the right price all the time and if the price needs to be reworked [due to quantity changes or part modifications], it can be done easily," says Mr. Kuzelka. "Quotes are now developed based on facts and they are more consistent." KSO Metalfab has integrated its estimating into an integrated shop management package. Mr. Kuzelka feels strongly about the benefits of computer-aided cost estimating systems and says that people who are not apt to change from the pencil and paper method of estimating won't be around much longer.

As you can see, companies are benefiting from computer-aided cost estimating systems. Perhaps one of these systems can increase your competitiveness.