Become the Amazon of Job Shops by Providing Quotes in Days, Not Weeks
Most shops have a win rate of 20% to 30%, which means seven out of 10 quotes add zero revenue to the bottom line. By eliminating Excel spreadsheets and integrating with ERP software, online quoting tools streamline relationship-building.
Posted: May 27, 2020
BY STEPHANIE JOHNSTON
More than half – 53% – of industrial buyers expect to be contacted within 24 hours of submitting an RFQ. You’re not alone if your operation takes longer than that to respond, but you may be missing out on business from buyers accustomed to shopping online.
You’re also probably not optimizing your personnel investment. Many sales managers – like Dave Butler at AxXis Corp. in Torrance, Calif., and Peter Marcoux at Century-Tywood Manufacturing in Holliston, Mass. – spend more time every day generating quotes than talking to potential customers and mentoring their team. Most job shops have a win rate of 20% to 30%, which means seven out of 10 of their quotes don’t generate any revenue.
Even if you don’t win a job, online tools like Paperless Parts help set the stage for new business by starting a relationship that’s easy for both parties to continue. Responding to an RFQ within days instead of weeks elevates a company’s profile by making it easy to do business with you. The quote lives in a centralized repository any employee can access and refer to at any time. By being able to quickly find historical information, employees have more time to service existing customers and increase machine utilization.
This is what co-founder Jay Jacobs had in mind when he conceived of a digital tool that would automate much of the quoting process by standardizing the gathering of contact information and linking part geometry to a shop’s machine and material capacity at any given time. Jacobs founded Rapid Sheet Metal, one of the world’s largest quick-turn sheet metal fabricators, and Rapid Machining, the world’s second-largest quick-turn CNC machine shop and sold them to ProtoLabs, another digital quoting platform.
Paperless Parts complies with International Traffic in Arms Regulations (ITAR) so customers don’t have to share encrypted ZIP files, and lives on the extremely secure Amazon GovCloud. Features like geometric part search enable manufacturers to quickly search for and find similar files, simplifying the chaos of a shared drive.
Launched in 2017 for CNC milling and machining, the platform was expanded in 2019 for 2-D and 3-D sheet metal fabrication. Like machinists, fabricators can customize design for manufacturability (DFM) warnings to their shop’s capabilities. The platform’s geometry engine analyzes components to identify features such as bends, holes, and thickness irregularities and unfolds each part to provide dimensions and thicknesses to define material requirements. Assemblies including third-party components can be quoted as one line item instead of by each part.
“We’ve seen how tools like Slack and Office 365 transform small and large businesses through better communication,” says Paperless Parts’ other co-founder and CEO Jason Ray. “For manufacturing, the missing piece was the proper context of the part and corresponding technical data. We provide communication in the context of geometry.”
Critical Data Living in Too Many Places
Established in 1959, AxXis Corp. is a full-service CNC machine shop that produces parts and components for industries including aerospace, the military, and power generation. To meet the company’s goal of responding to RFQs within 48 hours, Sales Manager Dave Butler often put in 10- and 11-hour days.
One time suck was working around the company’s enterprise resource planning (ERP) software. Rather than input details the program wouldn’t need unless AxXis won the job, Butler printed the RFQ and made notes on everything from how to run the part to material costs. Because he input the information into the software only after winning a job, he was the only employee who could access and reference his notes.
All his quoting activity lived on an Excel spreadsheet. That made it difficult for him or anyone else at the company to find, much less analyze, when quotes came in and went out to why quotes were won or lost.
Since AxXis installed the “Smart RFQ” form on its website, Butler usually delivers quotes within 24 hours and is winning 44% of quotes. His goal is to win 66% – and he expects to hit it.
As soon as a customer enters its contact information and uploads part files and supporting documents, the platform automatically generates and populates an RFQ and emails the customer and Butler. When AxXis wins a job, Butler goes into the ERP software and reroutes the data to take next steps.
The geometry engine also quickly identifies potential manufacturability issues such as tight corners and deep holes or areas that require special tooling. Quotes include a 3D preview for customers to review and approve, or they can place the order directly through an integrated shopping cart.
AxXis is also leveraging the geometry engine to develop and refine pricing formulas. The platform captures real manufacturing costs with part-level operations and pricing templates; AxXis is adding yield rates, markups, and overhead costs.
Butler no longer uses Excel spreadsheets and AxXis is optimizing core ERP functions. For example, because Paperless Parts gives employees more visibility into quote status, they better understand project timelines and can schedule jobs more precisely.
Preparing for the Next Generation of Purchasing Managers
Century-Tywood Manufacturing has provided OEMs and contract manufacturers with fabricated sheet metal, machined components, stampings, and electromechanical assemblies for more than 70 years. The company tries to roll out new technologies before they’re widely adopted by the industry and competitors inevitably follow.
The company’s used to working with commodity managers in purchasing groups who practically know how to make the part they order by memory. However, buyers are becoming more report-driven and less well-versed on the technicalities of purchasing decisions. Regardless of part or assembly complexity, they often expect one-day quotes, instant ordering, and on-time delivery.
For 17 years, one employee – Estimating Manager/Sales Manager Peter Marcoux – used an Excel-based system to generate about 2,500 quotes per year worth $15 million to $17 million in sales. He manually input all data – from sheet size to cut time – into a spreadsheet, which linked to another spreadsheet that populated pricing. If an assembly comprised 20 components, he completed 20 spreadsheets. Quoting took up to a week.
Marcoux also couldn’t spot potential model violations. He’d quote a job from a PDF, send it to engineering (once won), and then contact the customer about any interferences. That required printing the PDF, redlining and highlighting issues, scanning it, and then emailing it.
Now he receives a 3-D STEP file that he uploads to the platform, which automatically creates a quote that’s 80% complete. When he spots potential manufacturability issues, he contacts the customer instead of his engineers and customers receive digital PDFs with 3-D visuals. Marcoux retired his spreadsheets, and built a library of historic data comprising all quotes so he’s not constantly re-quoting the same thing.
Today, he usually beats his goal of responding within three days. When quotes don’t depend on outside finishers, he responds within 10 minutes – faster than most, if not all, competitors.
Because the process is simpler, less-experienced employees can respond to RFQs, freeing Marcoux to focus on his other role as sales manager. If he or another employee do need help, they text the Paperless Parts customer support team. The shop is maximizing resources, delivering the high-quality products and customer service it prides itself on.
Like AxXis, Century-Tywood captures the real cost of manufacturing with part-level operations and pricing templates that factor in markups and overhead costs. Quotes that used to be wrong by tens of dollars are now nickels or dimes within range.
“Trust in the software has been transformative,” says Marcoux. “The more information we have up front, the more we can speed up the process. When you wear a lot of hats, that makes a huge difference for your business.”
Mazak MegaStir Becomes Exclusive Tooling Supplier for MELD Solid Deposition Technology
MegaStir has the unique ability to provide the complex tooling with the high-strength capability necessary to commercialize MELD’s solid deposition technology.
FABTECH 2023 Unveils Stellar Lineup of Keynote Speakers and Expert Panels
Industry leaders to share their perspectives on AI, advanced manufacturing technology and other pressing topics facing the fabrication industry.