Blog, Costing, Quoting Software

Fuel your data-driven business with quotation software

  • November 9, 2022
  • 4 Mins Read
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man's hands using a laptop with superimposed images like cogs and charts showing how data from QSTRAT's quoting software can help businesses

Business activity in the industrial sector is characterized by a relatively volatile marketplace, one impacted by global economic forces and longer-term trends. This environment along with the scale and costs involved in many industrial projects results in a lengthy and complex quotation management process.

Managing and sourcing from suppliers is a significant challenge to manufacturers and sometimes cost management can seem like unwieldy task, as this dynamic process involves the OEMs, as well as the rest of the supply chain.

When done right, with an integrated system and process, businesses can using their quoting process to:

  • Increase win rates by proactively gathering current information both internally and externally
  • Build a database of both customer and supplier RFQs
  • Easily standardize collection of all required supporting data from suppliers, incorporating different requirements by commodity
  • Implement a “re-bid” cycle for all production materials to ensure contracts are always current market tested
  • Increase material cost reductions through better application of existing procurement resources
  • Drive big improvements to the material and service sourcing process while continuing to meet all regulatory requirements
  • Track and trace all progress and communications across the quoting process to ensure quotes are captured and delivered on-time and every-time
  • Capture and store quality and process certifications internally and across the supply chain, develop and institutionalize a true “Approved Supplier List” (ASL)

However, with so much data coming in from so many sources, this is far easier said than done. Especially when your data is stored in several spreadsheets. It’s no wonder then that according to the IDC, “People spend 60% to 80% of their time trying to find data. It’s a huge productivity loss.”

Cost considerations

There are a number of factors that go into finalizing suppliers and your eventual costs, and the process requires a careful review of multiple – sometimes fluctuating – factors. Here are some considerations:

  1. Allocating Direct and Indirect costs
    • Direct costs include labor, materials and overheads
    • Indirect costs may not directly contribute to the price of the final product, such as travel, marketing etc. (but are still business costs to take into account)

Having an Activity based costing system streamlines the ability to allocate costs in a more granular manner to ensure you are attributing costs at a level that supports your margin assumptions.

  1. What is the industry standard cost?

Keeping an eye on the market rate is essential to know you are paying a fair price, and gives you the information needed to negotiate with suppliers as needed. This requires comparing quotations from multiple suppliers, and then also reviewing those shortlisted to evaluate their reasonableness, e.g. by looking at their performance with previous bids, and making sure that no mistakes have been made in the bids.

Assessing cost based on commodity prices and highlight Supplier quotes out of range is now possible with AI.

  1. Previous price paid

Historic data is very helpful as a benchmark to determine is the prices being quoted are reasonable

 

Make your software do the work for you

Technology tools – such as those available in a specialized costing software – are essential for your business to be able to do an accurate cost analysis. In addition to completing calculations faster than you could with spreadsheets, the right software can give you the data you need right at your fingertips to help the right decisions, faster. Manufacturers and procurement professionals use quoting software to help build better products, strengthen supplier relationships and speed time to market.

However, developing your own custom software requires significant time and money to build, and the end product still may not deliver all you hoped it would when you started off the process.

This is why customers have been turning to QSTRAT for almost 20 years to improve overall program success.  QSTRAT has a global install base that together is processing 1000s of RFQs each day. Multi-nationals like Linamar, Sylvania, Zeiss, Kasai, and Leggett & Platt rely on QSTRAT to accelerate RFQ processing, increase win rates, and improve gross margins.

QSTRAT Costing captures all this data in a single source, and lets you build out a full cost model including material, labor, OP, tooling, overhead – and any other component you have.

  • Create detailed bills-of material on-the-fly
  • Pass detailed costing information to other QSTRAT applications for complete quotation lifecycle management
  • Accurate and reproducible costing and pricing analyses
  • Incorporate a variety of methodologies and cost drivers
  • Export your data in various formats
  • Central and secure repository of all quote data
  • Consolidated administrative interface
  • Built-in assortment of simple or detailed reports
  • Import library items from Excel

QSTRAT Costing features customized spreadsheets that allow users to do complex, sophisticated cost analysis on manufactured parts. Assumptions are stored with the costing files and can be easily updated. The system’s results are predictable, consistent, and reliable, letting manufacturers quote with confidence.

QSTRAT Costing supports a wide range of methodologies and cost drivers, from simple labor burden cost allocations to complex, activity-based cost (ABC) models. The consistent, disciplined, and reproducible approach to cost estimating and quote preparation helps users understand costs in greater detail and improves the accuracy of their quotations.

 

Deployments are tailored to your organizational needs. To learn more about QSTRAT Costing or the full QSTRAT suite, or to book a demo, get in touch!

 

 

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