One area he focused on was difficulties in producing accurate Complex Job Estimates and tracking the real costs of each job. According to him, it has been difficult to get to his team, the accurate costing information to use when setting a fair price right for every job. To keep the business profitable, the team must get those cost estimates and the pricing right to ensure each job is profitable.
The right quote with consistent, accurate, competitive pricing all starts with the estimate. The estimate, he said, is only as good as the costing information visible when it is drawn up. Compiling complex one-off quotes has been stealing time from more useful work as the team has to check the cost and pricing rules of each item. He was particularly frustrated at the time spent on job requests that the team ultimately to lose the business because it took so long to compile Complex Job Estimates.
The team in this business were using two systems to deal with the pricing for a customer. The ERP system had the latest inventory on hand and stock items pricing as provided by approved suppliers. And the other was a spreadsheet of all the agreed discount structures for different products, promotions and important customers.
Operations had a spreadsheet with special formulas in it combining different sub-assemblies together for producing estimates. This spreadsheet was occasionally updated through laboriously importing the latest pricing “data dump” taken from the ERP system by finance. According to our business owner, the pricing in the ERP system and the spreadsheet used in estimating were never in sync for more than an hour or two. The process of updating the spreadsheet was prone to errors as master data changes (like when suppliers change product codes) were not routinely monitored and shared. The tool was contributing to the problem. When the data was correct it did, however, have some clever shortcuts designed into it which allowed estimates to be produced more easily.
The other issue about costing that he mentioned directly was the challenge of tracking the actual costs of a job. The time sheets and job data are only finally correlated once a month. That meant that the profitability of each job was only visible a month in arrears in the management financial pack.
Using software to integrate quoting across departments
Job shop management systems integrate across departments planning, monitoring and costing of shop floor activities. They support job-driven costing, cost monitoring and specialised procurement in real time. Having this information visible at all times reduces quoting time and mistakes. The quicker response in quoting led to noticeable improvements in customer satisfaction and loyalty.
The integration between job management system and the ERP system put the latest figures at the team’s fingertips. They could much more easily plan profitability into every job. The key to this was making sure that all systems used the ERP system as the “one source of the truth” for labour and material costs. This allowed master data about inventory items and current pricing to be maintained in just one central place. This eliminated the impossible struggle of keeping several disparate systems of pricing in sync.
The specialized logic and building blocks habitually used by the estimators was preserved to be re-used all the time – saving time and avoiding mistakes. Speed of quoting was improved as quotes for a repeat request from a customer could be imported and adjusted for other customers with a similar request.
Create Complex Job Estimates in JobPRO with Ease
Fast and accurate are core JobPRO values that are the foundation for confidence when delivering quotations. JobPRO integrates with your ERP’s costing and pricing data to provide immediate access to true and accurate labour and material costs. The quoting workflow and bills of materials (Templates) will ensure that nothing vital is left out of a quote as well as increasing quote accuracy. The ease of compiling a quote using the intuitive interface means customers receive the right price quicker, keeping them coming back for their next job and not heading off the competition.
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With JobPRO your quoting will be built on accurate consistent pricing and with the right margins built into them every time, YOUR business will stay profitable. We can help you get complex job estimates right contact US now!