While EMS companies compete for manufacturing jobs, they need to generate quotes for several jobs \u2013 while only winning some of them. Offering a competitive quote is tricky: on one hand, manufacturers want to offer an attractive price. But on the other, they need to take into account all possible costs, material and production costs, in order to make sure that the work isn\u2019t underpriced. And since many factors can change between quotation and order, a thorough \u201cre-calculation\u201d needs to happen exactly when time is at a premium and any delays can affect delivery commitments.<\/p>\n\n\n\n
As a rule of thumb, material costs are the lion\u2019s share at around 70%. Production costs account for 30%. Seems simple enough, but what happens if you don\u2019t get production costs right? If the work was underpriced, you\u2019ll run into trust issues with your client as you\u2019re forced to charge a higher sum than originally agreed. If it\u2019s overpriced, it\u2019s likely you won\u2019t get the job at all\u2026<\/p>\n\n\n\n
Finding accurate prices for material is a question of finding a good external resource: a database with real-time component prices and availability<\/a>. But production costing is quite a different matter, relying entirely on internal company knowledge and expertise.<\/p>\n\n\n\n What machines will be used in production? Which line will be used? What is the cost of equipment? What are the labor rates? What are the energy rates, shipping rates? All of these, and more, need to be taken into account when calculating production costs.<\/p>\n\n\n\n Large companies typically have an entire department dedicated to cost calculation, which includes several process experts, a dedicated purchasing group, hardware engineers, and an up-to-date ERP system. But in smaller companies, accurate job quoting will require the input of SMT and THT assembly experts as well as testing engineers. Directing such experts\u2019 time at job quoting, rather than production itself, is disruptive to the manufacturing flow.<\/p>\n\n\n\n In our on-demand webinar<\/a>, Kevin Decker-Weiss of CircuitByte <\/a>and Siemens expert Paul Carpine explore the challenges of accurate PCB quoting, and also explain how the common Excel-based solutions are holding companies back. Watch the webinar to:<\/p>\n\n\n\nAn advanced method for accurate PCB quoting<\/h2>\n\n\n\n
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