SUMMARY

From the moment a prospective customer expresses interest to the final delivery of the product, every minute counts. When the quoting process is simplified, an estimator can quickly and easily create a quote. Speeding up the estimating process is not just a matter of convenience; it’s a strategic imperative for winning more business. In a race where the first quote often wins, having a streamlined estimating process can make all the difference.

So, your prospective customer needs something, and you understand their needs and expectations. You have the perfect product at the right price. And a little discount to sweeten the deal. From here, executing a winning manufacturing quote is simple. Or is it?

Estimating is a race, and you want your salespeople to win more deals because your estimating process turns quotes around faster than the competition. Why? Because the first quote in greatly increases your chances of winning the business. Often buyers from big brands will say that they require three quotes to be accepted, but they often don’t wait for the other two quotes when making time-sensitive purchases.

The estimate, or request for quoted (RFQ), is arguably the most important object in the overall process of folding carton manufacturing and label converting. The estimate encapsulates the manufacturing plan (raw materials, tooling, press, and finishing), the estimated cost, and the sales pricing. When raw material costs are in a constant flux, your estimators are even busier than normal.

If nothing else, the need for speed justifies a need for automation and technology.

The process of cost estimating for manufacturing is complex, and often requires a team of estimators, seasoned in estimating practices and pricing strategies.

Cost estimating in packaging manufacturing is both a science and an art, requiring a meticulous analysis of every component involved in production, from raw materials to overhead expenses. In today’s competitive landscape, where buyers demand quick responses and competitive pricing, mastering the art and science of cost estimating is paramount for success.

Costing refers to the process of calculating and analyzing all the expenses associated with manufacturing a product or providing a service. It involves a detailed examination of all the inputs, including raw materials, labor, overhead costs, and other expenses incurred during production. The goal of costing is to accurately determine the total costs of production for each unit.

Pricing, on the other hand, is the process of determining the selling price of a product or service based on various factors, including cost, market demand, competition, and perceived value. Unlike costing, pricing involves considering external factors such as customer preferences, market trends, and competitors’ prices. Pricing requires businesses to assess the perceived value of their offerings in the market and set prices that capture the maximum value while remaining competitive.

What’s involved in the costing process for packaging job?

• Admin Time: Order processing and vendor management
• Raw Materials: the cost of raw materials such as paperboard, cardboard, plastic, or metal, as well as any additional materials such as adhesives, inks, coatings, and labels.
• Labor Costs: direct labor costs for machine operators, assemblers, and packers, as well as indirect labor costs for supervisors, quality control inspectors, and support staff
• Setup Time: Preparing your job to run including the time and labor required to set up the machines, as well as any additional materials or consumables used during the setup process.
• Tooling Costs: Special tooling and wear on existing tools
• Machine Runtime: Cycle time on the machine
• Quality Control: includes the cost of inspections, testing, rework, and any corrective actions taken to address quality issues.
• Outsourcing: Outside services required for the job including design services, die-cutting service providers, other contract packaging services.
• Waste and Scrap Costs: materials that are wasted or rejected during the packaging process. This includes the cost of raw materials lost due to defects, errors, or inefficiencies in the production process.
• Shipping Preparation and Shipment: Transportation and logistics costs involve the expenses associated with shipping and delivering the finished packaging products to the customer.
• Overhead: Allocation of fixed costs to consider utilization of assets

Job pricing, unlike job costing, isn’t merely about crunching numbers; it’s more an art form. It’s about recognizing the inherent value of the service you provide beyond the raw costs and ensuring that value is accurately reflected in the price tag. This entails a delicate balance of factors, from lightning-fast turnaround times to impeccable accuracy. There is no one-size-fits-all pricing. Ultimately, the right price is the one that resonates with the customer, aligning with their perception of value. But what exactly goes into determining this elusive figure?

• Urgency of the Buyer: Does the buyer need the job shipped as soon as possible?
• Type of Job: Long run production? Short run? Digital?
• Criticality of Delivery: Do they need it immediately?
• Availability of Raw Materials: Readily available or experience supply chain issues?
• What Others Charge: Similar jobs from the competition?
• Type of Buyer: Procurement buyer, broker?
• Relationship With Buyer: Existing customer or new job?
• Economic Conditions: Is the economy expanding or contracting?

Templates within your estimating system serve as pre-designed structures that include predefined parameters, such as material costs, labor hours, machine rates, overhead expenses, and profit margins, tailored to specific types of projects or products. Estimators can simply select the appropriate template that closely matches the requirements of the current job. This saves valuable time.

Real-time access within an estimating software system significantly accelerates the process of getting quotes out faster by providing estimators with immediate access to critical information and resources needed to prepare accurate quotes, quickly. Estimators can quickly retrieve up-to-date data on material costs, labor rates, machine availability, and inventory levels directly from the ERP system. This eliminates the need to manually search for information in paper files or on spreadsheets.

Accurate inventory information allows the estimator to provide realistic lead times and delivery dates to customers. Real-time inventory data allows the estimator to accurately assess the availability of raw materials, packaging components, and other supplies needed for the job. An estimator can identify potential shortages or delays in material procurement, allowing them to adjust the quote accordingly and manage customer expectations regarding delivery timelines.

Real-time access allows estimators to view live production schedules, enabling them to assess the current workload and production capacity. Estimators can instantly share quotes, updates, and revisions, ensuring swift decision-making and responsiveness to customer inquiries.

A tools management module can have a significant impact on the speed of the quoting process in packaging estimating by providing essential information. By accessing real-time data on tool inventory and scheduling, estimators can determine whether the required tools are currently in use, undergoing maintenance, or available for use.

Estimators can rapidly visualize the proposed packaging design and imposition layout using the Packaging Design and Packaging Imposition modules of an ERP/MIS. They can assess the complexity of the design and accurately estimate the production time and resources required. Estimators can also customize packaging designs and imposition layouts based on customer requirements and specifications. Using FEFCO and ECMA template libraries, estimators can effectively bypass the design and prepress phase.

“When a packaging company gets a request for quote, it’s important to respond as quickly as possible since quite often, whoever responds first gets the job,” states Romek Kowalczyk, Product Manager at HiFlow. “The imposition and design modules can replace a time-consuming manual estimating process to offer quicker deliveries of quotes to customers.”

The imposition module includes algorithms to optimize the placement of pages or images on a sheet. It reduces production costs and minimizes material waste. the Packaging Design module allows dynamic creation of packaging designs that include elements of thickness and type of material.