Cost engineering manages project costs through tasks such as cost control, estimation, cost prediction, risk analysis, and investment appraisal. It is vital in terms of calculating return on investment when making operational changes. The ultimate goal of cost engineering is to achieve an ideal balance of quality, time, and budget requirements.
Here we’ll discuss the benefits of integrating a cost engineering system for businesses, along with the specific advantages of using QLM Costing software for accurate quoting.
The Importance of Having a Cost Engineering System
To make sure that customer quotes are as accurate as possible, businesses need a cost engineering system that keeps track of material, overhead, labor, tooling, and capital costs. It’s also important to compare actual costs to quoted costs following customer acquisition, which enables continued improvement of the business’s cost model.
For example, you may create a chart that organizes material, capital, overhead, tooling, and labor. This chart would also consider amortization of capital, scrap factors, and others. However, traditional ERP systems don’t offer the ability to compare actual costs to quoted costs, so businesses cannot improve their cost estimates over time. Instead, they need a cost engineering system to gain complete transparency into costs and maximize the accuracy of quotes.
Driving Accurate Customer Quotes with QLM Costing
If you want to avoid relying on restrictive spreadsheets and increase the accuracy of your quotes, QLM Cost Estimating Software makes it easy for manufacturers to effectively manage drawings and quotes. Using this innovative solution, you can benefit from in-depth cost analyses and hierarchical bills of materials. In time, you’ll be able to quote with confidence.
Some specific features of QLM Costing software include:
- Generation of comprehensive bills of materials at any time
- Transfer of all relevant costing information across the entire suite of QLM applications to enable the complete management of quotation lifecycles
- Integration of multiple cost drivers and methodologies, including labor-based allocation models, activity-based costing, and more
- Easy export of data using XML format for use with other applications and systems
When incorporating QLM Cost Estimating Software, your business will improve in a number of key ways.
Any cost engineering system should be simple and easy to implement. QLM Costing’s user-friendly interface makes the system intuitive to learn and use.
To facilitate a seamless workflow, your cost engineering solutions should be compatible with existing applications. Our QLM Suite features open standards-based technology, such as XML and Java 2 Enterprise Edition. As a result, you can easily share data across multiple platforms.
Access complex, accurate analytical tools with ease. With QLM Costing, you can test out certain hypothetical scenarios that help you determine which steps to take for optimal success and profitability.
Challenges That Cost Estimating Can Present
Cost estimating can come with several potential challenges, including the following.
Calculating Cost Variables
One possible challenge involves quantifying the impact of every design parameter of a component to help reduce costs. Plus, estimators may need to determine how intangible or unknown products and methodologies impact costs. These variables could include everything from human lives to newly implemented regulations.
Good cost estimates need to be timely, but time often affects consistency, validation, data collection, and quality of data.
Quality of Data
As a result of resource constraints, the quality of available data may suffer. If time constraints don’t allow for sufficient data collection, businesses may rely on secondary sources, which may only help to some extent. Without a sufficient quantity of good data, businesses cannot proceed to estimate accurate costs.
Coordinating with Multiple Organizations
To collect data, estimators need to work with many organizations and sources. Before accessing any data, analysts need to send out and track down non-disclosure agreements or other security requirements from every organization. This could lead to increased time delays, lowering the quality of data.
After gathering data, analysts must ensure it is consistent across various metrics. They must adjust for organizational differences, structural changes, specific processes, and other variables that develop over time. Only when the data is consistent can estimators begin to analyze it.
QLM Costing Software with QStrat
By introducing an effective cost engineering system to your operations, you can accurately quote customers and compare quotes to actual expenses. With the help of QLM Cost Estimating Software, you’ll benefit from a solution that optimizes efficiency and accuracy as you continue to do business.