How much money can mold quoting software save you?How much money can mold quoting software save you?

Quoting molds is that thankless—often profitless—chore that every mold manufacturer must perform if they ever expect to get another job. So, is there an easier way? Maybe, but do moldmakers trust it?

There are a number of ways to quote mold jobs. You can stare at a design for a couple of hours with two of your best engineers and then guess at a price. Or there’s the accounting approach, in which one engineer says, “It looks like the mold we built last August,” which results in a price guessed from previous work. No one really knows just how much time and, more importantly, cost they invest in mold quoting each month. One thing is generally agreed upon, and that is that mold companies spend a huge amount of time each month quoting molds that will never become actual jobs.

A fair estimate of the percentage of quotes that turn into jobs is less than 5%. Most moldmakers say that if they got 10% of the jobs they quoted, they’d be ecstatic. Over the years, only a handful of moldmakers have said they have a 25% hit rate, but those were mold manufacturers with molding facilities that had very specific niches, and averaged only about 25-30 RFQs a month.

One advantage to mold manufacturers that also have production molding is that should they miss the numbers on the mold, they can make it up on the piece part price. That’s at least part of the reason many moldmaking businesses have expanded into injection molding. “On the mold, you’ve got one chance to get the price right,” a moldmaker once said. “If you also do molding, you got a lot of chances to get the price right.”

Quoting software
There are several types of mold quoting software on the market of which moldmakers could avail themselves. However, according to one quoting software sales engineer, moldmakers are the most difficult to sell on the advantages. Jeff Lambing of JDL Technical Services, who sells Perfect CalCard Mold & Part Quoting Software, says many improvements have been made to this quoting software, including options for ball-parking a quote for a customer (no data).

Perfect CalCard is more detailed in the data that can be input with respect to the geometry elements,” says Lambing. “You can input 3D data, use the quick method that allows you to profile the part with the number of ribs, undercuts, bosses, etc., or you can use a detailed method and call-out dimensions for ribs, undercuts, bosses, etc.“

In addition, Perfect CalCard allows for quoting family molds, three-plate, stack, and multishot molds because there are a lot of different profiles built into the program, Lambing explains. “And you’re not limited to the number of cavities, either,” he says, adding that a new feature for future releases will include the ability to enter hot runner data.

Moldmakers shy away from quoting software
When asked if they use quoting software programs and if they don’t, why not, several moldmakers said that they basically don’t trust the numbers in a software program. Most like to do it from their heads, where years of experience, knowledge of nuances, and creativity come into play. Andy Baker of Byrne Tool & Die Inc. in Rockford, MI notes that he had a custom software program developed just for his shop so that it could include everything he wanted in the program.

“We wanted something that we could integrate into our daily life,” says Baker. “We have a work order request portal integrated into our e-mail, we can save part data, customers can log in and see every job they have, pull off progress reports, and it saves time. It’s all done in Lotus.”

Many moldmakers believe 80% of the quote has to come from the quoter’s own knowledge—that simply putting in data won’t give you an accurate cost. “The nice thing about Perfect CalCard is that you can use your knowledge to tweak the program,” says Lambing. “Because of the profiles set at the beginning, the program produces numbers you can trust.”

Part of quoting a mold accurately and profitably is knowing the various machine rates and labor rates for your company. Lambing says that many mold companies he speaks with have one burden rate for the whole shop, such as $65/hr. When asked why they don’t break out the hourly rate for each machine, many say they just don’t have time to do that, or do not know what the going rate is for a wire EDM or an EDM operator, so they lump it into one rate. While convenient, it probably produces a less accurate quote in terms of knowing your true costs.
Lambing notes that Perfect CalCard has a burden rate calculator for machinery built into its software that makes it easy for moldmakers to input their rates and understand their costs.

Black hole of cost-of-quoting
Most midsized mold companies quote an average of 50-70 molds a month, and some do upwards of 100 RFQs a month. That’s a lot of quoting, which means it takes the time of high-paid employees to do these quotes. One company owner said he spends at least one entire day a week just quoting, sometimes more than that. He typically uses one or two of his engineering guys to help him. That’s some high-powered brains working on something that may or may not become a profitable job.
 
“People don’t realize how much it costs to quote, and how much time it takes,” Lambing notes. “And 95% of that time will be spent quoting jobs they’ll never win.”

Some moldmakers admit that they have certain customers that use them as “cost estimators” because their own (OEM) company has eliminated those positions. One moldmaker admitted that he was afraid to crunch the numbers to find out just how much quoting was costing him. Sounds like the ostrich method of job costing!

Lack of employees available to do cost estimating has driven many OEMs and Tier One companies to implement quoting software, says Lambing, which is why those companies—not molders or moldmakers—are his biggest customers.

That could explain why one moldmaker commented that his customers already seemed to know the cost of the mold even before he quoted it. Perhaps more are using quoting software to ballpark the numbers for themselves before taking it to a moldmaker for the final numbers.

Lambing says that he demonstrated the software to one mold company that had four guys whose sole job was quoting. They did more than 4000 quotes a year. “What does quoting cost that shop?” Lambing asks rhetorically.

Another mold company Lambing called on had one guy quoting, and he was doing 7000 quotes a year using an Excel software program that he’d developed himself. The owner of the company admitted that this one guy was the only person in the company who knew how to use the program. “If something happens to his quoting guy, they’re dead in the water,” adds Lambing.

Downsides to quoting software
Bill Tobin, plastics industry consultant of Tobin & Assoc., says the one problem with mold-quoting programs is “they do not take into account market conditions, and right now that’s a big deal.” That said, Tobin believes that quoting programs can be tested by moldmakers to prove them out. “It will give them a good way to look at prior jobs, and quote them in the software program to see if the program provides comparable numbers,” says Tobin. “Once moldmakers can gain faith in these programs, they’ll use them. But they have to get warm and fuzzy with it first. Still, they have to ask, when I quoted that job two years ago, what were my real costs and what were market conditions then?”

Lambing believes Tobin is right, and that generally, there has to be a different view on costing and pricing. “Certainly what Perfect CalCard [or quoting software in general] can do is the costing, which means to judge the effort for the tooling on a technical and economic basis [burden rates, material prices, manufacturing times, profits, etc.],” explains Lambing. “Pricing on the other side is more of the political aspect that Bill speaks of [market price, etc.]. As we know, of course, the market tells you the price it will pay for a mold up to a certain degree. With a proper costing solution you are able to judge on a financial basis whether you are able to build the mold for that price and not lose money on it. Knowing the cost to build allows you to turn down work if you wish, if market prices are below your comfort level of profitability.”

Moldmaker likes his software
Quashnick Tool Inc. in Lodi, CA is a mold manufacturing company that also specializes in molding medical disposables in an ISO 8 cleanroom facility. Derek Beattie, Quashnick’s engineering and tooling business manager, has been using Perfect CalCard software for about eight months. Quashnick purchased the software after Beattie tested a trial version first.

What led to Quashnick’s purchase of Perfect CalCard was the receipt of an RFQ from a new potential customer for a medical product that involved 25 different plastic components. That represented a huge quoting job. “As a moldmaker, I’ve done mold quoting for a number of years and have different tools I use for that, but we’ve had some changes in personnel and responsibilities so now I do all the mold quoting and plastic part pricing,” explains Beattie.

Quashnick was one of two suppliers chosen to quote the job, as the customer wanted to divide the tooling and molding between two companies. “I had to quote all molds as both single-cavity and two-cavity, and all the parts in two-cavity molds in quantities of 250, 500, 1000, etc. I thought there had to be a better way to do this.”

Beattie took what the plant manager had developed for quoting, which involved Excel spread sheets, and plugged in the variations. “There was no standard way of doing the quoting, and now it was my responsibility,” he says. “I’ve been in programming, computer logic, and CAD design, so I try to lay things out and standardize them to have a way to do it that’s repeatable, consistent, and in a way that I don’t have to reinvent the wheel every time I quote.”

As Beattie went through the quoting process for these RFQs, setting up his own spreadsheets manually, he created a list of the things he wanted in a quoting program. “I wanted a materials database with the current pricing for both mold materials and components, and plastic resins, so I can select it and do my quote from that and have the system do the quote automatically using the variables such as volumes of parts,” says Beattie. “Then I wanted it to figure out the amount of material that will be used to mold each part, stored in a place that I can recall easily for requoting down the road. I wanted a system that could bring everything into one database.”

When he was ready to begin a search for quoting software, Beattie used trial versions of several different software systems. He found that with some, you can’t do multiple quantities at one time, and he didn’t like that. “I wanted something that I could put in all the data for everything—all the variables—and have the software calculate the costs based on a certain number of parts per lot. By laying it out in a spreadsheet, it gives you your cost and what you should charge at each quantity level,” says Beattie, who found all of that with the Perfect CalCard quoting system, which Quashnick purchased.

Has the Perfect CalCard system saved Beattie time? “It has saved me time because one of the keys is standardizing the database, which allows me to input the same information—such as materials for building the mold—and once they’re in there with pricing, I don’t have to go looking for that,” says Beattie. “One of the biggest time consumers in quoting is looking up pricing on materials, mold bases, plastic, etc. By having it in the database, you can go in and select what you need—that’s real time saver.”

No matter how good a software quoting system is, however, Beattie says the person quoting the mold still has to understand moldmaking and quoting methods, and take the time to become familiar and comfortable with the software. “Like any other quoting  software, if you’ve never quoted a mold before, you’ll have no idea whether your quote is right,” he adds. “You have to understand the quoting process, and reflect how your company quotes in your final numbers.”

Additionally, Beattie says that users need to take the time to establish machine rates, labor rates, and understand how the software works in order to calculate an accurate cost of the mold for your shop. “Having the experience and understanding ahead of time of what you think the cost will be based on years of experience is still key. I can see how it might be difficult for some moldmakers to trust the software’s output. But it’s like any other tool—you don’t just get on a machine tool and begin cutting cavities in one day. Understanding how to make it apply to your business and how you do things is critical to getting good output from the software.”

Beattie notes that one thing that really drove him to use quoting software is the fact that he’s very concerned with keeping business in the U.S. and at Quashnick Tool. “To me, one of the things that is important is to become more competitive, and to do that means understanding what our costs really are—what it actually costs to run certain machines in the shop—and then making improvements to become more efficient. If you just use cookie-cutter pricing and you’re overcharging for certain machines, you’ll lose customers because you can’t be competitive. I try to be more scientific in all of this and understand our true costs to build a mold. That’s why I wanted this software.” —Clare Goldsberry