Respecting quoting deadlines: the quest for the Holy Grail
It’s no secret: being the first to deliver a quote to a customer is a crucial factor for success. Some EMS even claim it gives them an 80% chance of winning a deal. Quite often, objective lead times for delivering quotes can be up to two weeks. Too many times, we hear “X months ago we managed to get up-to-date with our quotes, but today we are lagging behind again”.
According to corporate structures we mostly encounter two forms of organisation:
|Project estimator approach
The quote is undertaken
Family buying approach
The various positions to cost
are distributed among
several specialize buyers
according to product family
In most cases, the costing process is supported by a unique Excel template, usually quite elaborate, allowing the costing of materials to be performed on one hand and of and labor on the other. Some more complex templates allow several products to be grouped in the same file.
Preparing quotes: a thankless task
The people in charge of quotations put a lot of energy into performing the costing as quickly as possible (at the same time as other quotes, naturally), sending RFQs to suppliers, following up, compiling large amounts of data and synthesizing all the information needed for the offer.
And quite often, the conclusion is: “It’s too expensive”, “we’re running late” or even “we need to cost another quantity”.
Human resources management
For the manager in charge of this activity, the management of human resources is a delicate problem. Producing a good quote requires rigorous and organized resources, with sound technical skills and a good knowledge of the supplier market. Buyers are of course the most appropriate resources, but they generally prefer the negotiation activities with procurement markets and processing orders. Significant costing activities might lead to demotivation and a higher turnover rate.
Furthermore, there is also the cost issue of the resources employed in this activity. Of all the quotes prepared, the conversion rate can be as low as 15%. The result is a significant sales cost.
End of Part One: The Differentiated Approach to Increasing Commercial Efficiency
After this glance of the current situation of Quote Leat Time for the EMS, we will discuss about the expectations of the clients in a second part.