“Why aren’t we closing more quotes?” Job shop owners ask the question often, and most have a good idea that the answer is related to price; specifically, the numbers being used to calculate a quote price aren’t accurate and/or aren’t readily available. Another scenario is when a project manager isn’t able to precisely account for all that might go into a quote (labor, materials, time, transportation, etc.), he or she might simply “cushion” the estimate to avoid a loss. This approach makes sense, but it’s also a good way to lose a request for quote (RFQ).
To close more quotes, your quotes have to be accurate, and within an enterprise resource management (ERP) system like NetSuite you have a 360° view of all the costs that go into a project, minimizing the chance of flawed estimates and wasted time/money. By leveraging an ERP, you also have the insights you need to determine the reasons you’re not closing more business.
Job shops typically develop quotes using a fair amount of guesswork, lots of legwork locating costs assigned to past jobs, and plenty of scrounging through different systems to find information (often outdated) they need. An ERP system is an accurate, up-to-date way to track the real costs associated with a job in order to quickly produce an accurate estimate – one that allows for a fair profit but isn’t inflated to account for uncertainty.
With an ERP solution you can:
- Create quotes faster and more accurately by having access to quote history, by duplicating past quotes to automatically fill new ones, and by creating repeat quotes for the next time you receive a similar request. By streamlining the process, you reduce the work required to create quotes and improve your chances of getting the RFQ turned around and approved sooner
- Ensure you have what you need to fill an order, with an up-to-date view of your inventory of parts, labor and materials
- Make sure you’re accounting for everything that’s part of producing a part, including shipping, sales tax and discounts
- Convert quotes into approved sales orders and route to your billing department for invoicing
Knowledge is Power
With an integrated system that tracks all facets of your quoting process, you have visibility into the project/product, the customer, the price and whether the quote resulted in work. Having captured this data for every quote, you’ll see where your strengths are – which products sell best, which customers buy which types of products, what price points seem to be most attractive, which quantities are most profitable, etc. – and where you have opportunities for improvement.
What would the impact be on your job shop if you could close just 5 percent more quotes? If your close rate isn’t as high as you believe it should or could be, look at how you’re creating those quotes. The best way to ensure accuracy and reduce time is to use real-time data that’s at your fingertips with an ERP system like NetSuite
Our manufacturing team has the experience with job shops to implement an ERP that’s aligned with your specific needs, and estimating is just one of the ways you’ll optimize your business and make sustainable growth possible. Why not reach out for a brief introduction to our Total Solution for Job Shops?