Quote Anatomy: Are you dissecting the quote to determine what you get in that bottom line?

The most recent economic downturn has forced many companies to reduce human resources to an absolute minimum. This dramatic reduction has made massive productivity increases mandatory to maintain the services that every level of the supply chain from OEMs down is accustomed to. Let’s face it; there are only so many hours in the day and the assumption of increased responsibility load means that many employees are now assuming roles that they may not be intimately familiar with. The increase in productivity almost certainly results in less time for investigation of the most efficient and cost effective solutions when identifying the best option for awarding your business.

Typically quotes are reviewed on a “best price / best timing” basis: here is what I need to have manufactured or have tooling manufactured for, here is the timing that I require. Many times when providing opportunities to potential new suppliers, the “bottom line” or the price is the only thing reviewed before filing the quotation in the “round file”. This method is not the most effective for determining the value that a new supplier can bring to the table. To complicate the matter further, the quotation process itself is flawed. Most of the time, and I am as guilty of this practice as anyone, sales teams review and complete scores of quotes in a given week and many times we assume that new and relatively new customers understand what is included in our quotations or sometimes due to the additional responsibilities sales professionals have taken on, simply don’t completely define the value added aspects of the quote. The industry standard for quote conversion tends to hover between 10 and 15%, so the nature of the quotation process is to churn out numbers of quotes and assuming that purchase orders will arrive for approximately 12% of them. Understanding the flaws in the process, what has created them, and the importance of dissecting the true anatomy of the quote is the only way to find the optimum value proposition for your company’s needs.

I often find myself following up with customers to discuss in detail what is “not” defined in the quote and although it is important to follow up on all quotations that are sent out, more descriptive phrases, attention to detail, and clearly defined aspects of our “solutions based” approach would make my time more productive. Our typical quote includes several value added aspects that are not verbalized in our quoting software (but I intend to implement in the very near future): the tool design review, the first sampling of the mold, in most cases a critical dimension layout, the “de-bugging” of the tool until the part is made to print, the transport of the finished product to the customer or the molder of choice, mold book and complete mold design on disk or print form.

To truly obtain the best value for your company’s dollar, the quotations you receive have to be dissected and compared to the anatomy of the other quotations in the stack and consequently we, as suppliers, need to provide more detailed descriptions of the services that we will provide for that dollar.

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Address:Rapid Mold Solutions

4820 Pacific Avenue Erie, PA 16506



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