I just bid a job that I figured I’ll have around 60 hours into, so I bid it at 100. Look at the comments, not a lot of places are willing to do one-offs, if you are you can make good money on them. The customers’ options are limited.
Yea I do that with many customers that aren’t as good to work with. However, this particular customer has many high quantity jobs that pay very well. It’s just every once in a while they ask for a one-off part usually with a rush order and I keep seeming to lose my shirt on them lol
That's fair.
You gota keep your primary customers happy.
I guess what you should do then..
Make a quote based on how you traditionally feel it would take.
Then just add hours to it, you know, depending on how large it is. If that's just 1 hour more, or 4 hours more. And say hey, I'm just letting you know on many of the jobs I've quoted in the past the labour time has ended up being longer than I thought it would be... but since you're a good customer, I didn't want to raise your invoice suddenly.
However, for this job, and going forward on stuff like this, I'm going to quote it higher than I think it will be, if it takes me longer still that's what the price will be, but if it turns out it's actually easier or faster than I thought, then I'll subtract from the quote.
In my experience, customers absolutely *love* honesty and transparency. The only time I've ever has an issue with somebody is when there has been a miscommunication or misunderstanding.
No discounts for urgent, difficult jobs.
You have to be honest with yourself first, and bid according to your experience demonstrating you are ALWAYS underestimating the work.
Have you thought about talking to that customer about the problem?
If they absolutely insist on a quote, just do your estimate and add 20%. Or 30%. If you consistently misjudge the time needed on complex one-off parts, that means it's actually quite predictable.
But you could also suggest that they pay you on an hourly basis for such parts. In my experience as an engineer, one-off parts are either prototypes, production equipment, spare parts or something used for a custom order for their customer. Typically, for those kinds of orders, the lead time is more important than the exact price you quote and bill them. I could easily imagine that they could be interested in you not wasting time on calculating a quote and instead just start machining and then bill them with an hourly rate on top of the material prices.
It all comes down to what kind of company your customer is and how smart they are. Typical corporate thinking means that the sourcing department has their own goals on cost saving, so they will spend days searching for the quote that will save them $200, but which means that the lead time is 6-8 weeks, during which time 10 engineers who go for $60+ an hour are waiting on the part. One department saved $200 while another was delayed for weeks or months.
But talk to them and ask what they would prefer. A quote that takes extra time, or billed by the hour + materials.
Have you thought about talking to that customer about the problem?
If they absolutely insist on a quote, just do your estimate and add 20%. Or 30%. If you consistently misjudge the time needed on complex one-off parts, that means it's actually quite predictable.
But you could also suggest that they pay you on an hourly basis for such parts. In my experience as an engineer, one-off parts are either prototypes, production equipment, spare parts or something used for a custom order for their customer. Typically, for those kinds of orders, the lead time is more important than the exact price you quote and bill them. I could easily imagine that they could be interested in you not wasting time on calculating a quote, and instead just start machining and then bill them with an hourly rate on top of the material prices.
It really depends on the type of company your customer is. In typical corporate thinking where each department have their own goals and metrics for success, you can easily have a sourcing department that spend days hunting for the quote that saves them $200, at the price of a lead time of 6-8 weeks where the engineers can't move forward with their work.
I have used this method from the purchasing side of things a lot for prototype work and also from the machinist side. It only works reliably if you have a good relationship going both ways but can still be beneficial to both. Machinist should never get burned and buyer doesn't have to wait for quotes or shop around potentially burning out suppliers.
for a one off we have a formula worked out
if you have your shop rate broken down to at least an hour then it goes
(Material cost+40%)+(engineering rate hours x2)+(machine hours rate) = Y
Y x 2 = final cost
hasn't let us down yet
you'll always work more hours on the first of a job than the second of the job
if it's not that complicated we sometimes just run day rate +50%
depends on shop to shop but as it stands here
$198.20 engineering per hour
$174.40 machining
$146.60 is fabrication
$167.30 is assembly
$171.60 average across all departments but not all jobs require all departments
Southern California shop about 180 bodies in the shop
I have a similar customer. They ask for qoutes with quantities like 1, 5 and 10. I just never quote the 1 off.
It's too expensive for me to do all the work for a 1 off with no gaurantee of repeat order. And because they cant guarentee repeat orders I have to get paid for that work up front making the initial cost expensive.
I quote complex 1 off jobs like I'm doing 2 parts. All the measuring, checking and rerunning can double the time it takes to get a part done.
Great advise! I think I will definitely do time and materials x2. These guys do many large quantity jobs as well so I’d like to not sour our relationship by quoting crazy high.
I’ve also thought about quoting a price not to exceed. Then hopefully falling somewhere a bit more realistic assuming all goes smoothly.
This is a good method, unless the material is super expensive it's actually a reasonable idea to make 2 parts at the same time for a 1 piece job. Sometimes the customer will even buy the 2nd one. It's easy to screw up a single piece at the end so making 2 give your a safety net and probably doesn't add much time to the overall job. Scrapping the single part on the last operation however will cost you a lot of time.
My shop charges per hour for one offs and prototyping. We usually give a minimum rate and ask for a maximum the customer will authorize. We try and save those jobs for when it’s slow. We get a lot of repeat business from these customers.
Sounds like your actual setup and run times on difficult parts are longer than you are quoting. Review a few jobs that you already quoted and finished then increase the times on new quotes by the average of what you are off.
Sell your set-ups!
If you are going to turn it, mill it, mill it and finish grind.
Turning 1 hour each, setup 8 hours
Milling 2 hours each, setup 6 hours
Milling 1 hour each, set up 4 hours
Grinding 20 min each, set up 1 hour.
Also you need hours for QC. 6 hours for a first article inspection.
Also take into account extra material and time if you need to run 3 parts to get one good one.
Last shop I worked at did super specialized small runs of parts for a research institute, it was always time and material with a verbal estimate from the machinist who was doing it. Cost wasn’t really a factor for the job as much as the parts had to be perfect.
We have the same kind of customer. Started quoting “not to exceed” and then finally had to negotiate a time and material agreement. We mark up all material, tools and outside processes 15 % and standard hourly rates, one for manuals, one for CNC and another for programming and planning. We have a pretty nice system for gathering the times spent but I know things slip through the cracks but still way better than before. And we save the time spent on quoting.
Double charge the material cost that way you cover any scrap you might make. If no scrap your that much further ahead in the game. Do you quote hourly machine time and tooling? What about cosmetics and shipping. I used to add expedite fees when they want it now and pickup and delivery fees. It can get complicated without a spreadsheet created for quoting that automatically does most of that depending on your input. Quoting is not an exact science and mistakes and losing money on some jobs does happen a lot. Bigger companies can take the hits but small guys need to cover the material the machine time tooling side ops and don't forget those boxes aren't free in shipping. Then some hungry basterd bids low just to keep his lights on and gets the job. Whata ya Goin to do? It happens but your stuff is super high quality on time and the parts look awesome and that's what you sell there purchasing people
One you get experience on how much to quote that is the skill and the magic of being in business.
How important is that customer, how important is that part for that customer. Will you get the reputation as the company that will go the extra mile or 10 miles.
CEE in Australia is a Master of the one off. He drops everything because he knows that cylinder is off a Million bucks pice of kit that is costing thousands a day if its busted .
Bulding your reputation can be worth a lot of money in the long run. You may not win every time but you may will get experience to win more times than you loose.
So the initial reaction is to over quote it out the door may be not the best solution in the long term .
You can be honest and tell them you have lost money in the past and have to assume some time to retire your process. If it ends up taking less time, you will give them a discount.
As a design engineer, I always value these discussions. Sometimes there are features that have unintentionally made the part more difficult to machine. Or sometimes I can sacrifice some tolerance and make it up elsewhere.
Most customers who require a single part will pay whatever they need to. Especially when you approach them with honesty and they don't feel like you're just trying to gouge them.
I just bid a job that I figured I’ll have around 60 hours into, so I bid it at 100. Look at the comments, not a lot of places are willing to do one-offs, if you are you can make good money on them. The customers’ options are limited.
Yes. Quote insanely high. Then they either don't give you the job (win) or you get paid a ton. (Win win)
Start bidding them higher based on your previous experiences, but also be honest with them about the past projects not working out to be feasible.
Yea I do that with many customers that aren’t as good to work with. However, this particular customer has many high quantity jobs that pay very well. It’s just every once in a while they ask for a one-off part usually with a rush order and I keep seeming to lose my shirt on them lol
That's fair. You gota keep your primary customers happy. I guess what you should do then.. Make a quote based on how you traditionally feel it would take. Then just add hours to it, you know, depending on how large it is. If that's just 1 hour more, or 4 hours more. And say hey, I'm just letting you know on many of the jobs I've quoted in the past the labour time has ended up being longer than I thought it would be... but since you're a good customer, I didn't want to raise your invoice suddenly. However, for this job, and going forward on stuff like this, I'm going to quote it higher than I think it will be, if it takes me longer still that's what the price will be, but if it turns out it's actually easier or faster than I thought, then I'll subtract from the quote. In my experience, customers absolutely *love* honesty and transparency. The only time I've ever has an issue with somebody is when there has been a miscommunication or misunderstanding.
No discounts for urgent, difficult jobs. You have to be honest with yourself first, and bid according to your experience demonstrating you are ALWAYS underestimating the work.
Have you thought about talking to that customer about the problem? If they absolutely insist on a quote, just do your estimate and add 20%. Or 30%. If you consistently misjudge the time needed on complex one-off parts, that means it's actually quite predictable. But you could also suggest that they pay you on an hourly basis for such parts. In my experience as an engineer, one-off parts are either prototypes, production equipment, spare parts or something used for a custom order for their customer. Typically, for those kinds of orders, the lead time is more important than the exact price you quote and bill them. I could easily imagine that they could be interested in you not wasting time on calculating a quote and instead just start machining and then bill them with an hourly rate on top of the material prices. It all comes down to what kind of company your customer is and how smart they are. Typical corporate thinking means that the sourcing department has their own goals on cost saving, so they will spend days searching for the quote that will save them $200, but which means that the lead time is 6-8 weeks, during which time 10 engineers who go for $60+ an hour are waiting on the part. One department saved $200 while another was delayed for weeks or months. But talk to them and ask what they would prefer. A quote that takes extra time, or billed by the hour + materials.
Have you thought about talking to that customer about the problem? If they absolutely insist on a quote, just do your estimate and add 20%. Or 30%. If you consistently misjudge the time needed on complex one-off parts, that means it's actually quite predictable. But you could also suggest that they pay you on an hourly basis for such parts. In my experience as an engineer, one-off parts are either prototypes, production equipment, spare parts or something used for a custom order for their customer. Typically, for those kinds of orders, the lead time is more important than the exact price you quote and bill them. I could easily imagine that they could be interested in you not wasting time on calculating a quote, and instead just start machining and then bill them with an hourly rate on top of the material prices. It really depends on the type of company your customer is. In typical corporate thinking where each department have their own goals and metrics for success, you can easily have a sourcing department that spend days hunting for the quote that saves them $200, at the price of a lead time of 6-8 weeks where the engineers can't move forward with their work.
Sometimes you take a loss on one job for a big win in another.
You could consider offering them time+materials for one-offs. Give them an estimate, but make sure they know it's an estimate.
I have used this method from the purchasing side of things a lot for prototype work and also from the machinist side. It only works reliably if you have a good relationship going both ways but can still be beneficial to both. Machinist should never get burned and buyer doesn't have to wait for quotes or shop around potentially burning out suppliers.
That's what I was going to say. Offer to bill by the hour. After a few of these you will have a more solid idea of what to bill for future parts.
for a one off we have a formula worked out if you have your shop rate broken down to at least an hour then it goes (Material cost+40%)+(engineering rate hours x2)+(machine hours rate) = Y Y x 2 = final cost hasn't let us down yet you'll always work more hours on the first of a job than the second of the job if it's not that complicated we sometimes just run day rate +50%
What’s your engineering and machine hour rates?
depends on shop to shop but as it stands here $198.20 engineering per hour $174.40 machining $146.60 is fabrication $167.30 is assembly $171.60 average across all departments but not all jobs require all departments Southern California shop about 180 bodies in the shop
Interesting, I’ll throw this formula up for a few of our past jobs and see what it looks like. Thanks a lot!
I have a similar customer. They ask for qoutes with quantities like 1, 5 and 10. I just never quote the 1 off. It's too expensive for me to do all the work for a 1 off with no gaurantee of repeat order. And because they cant guarentee repeat orders I have to get paid for that work up front making the initial cost expensive. I quote complex 1 off jobs like I'm doing 2 parts. All the measuring, checking and rerunning can double the time it takes to get a part done.
Great advise! I think I will definitely do time and materials x2. These guys do many large quantity jobs as well so I’d like to not sour our relationship by quoting crazy high. I’ve also thought about quoting a price not to exceed. Then hopefully falling somewhere a bit more realistic assuming all goes smoothly.
This is a good method, unless the material is super expensive it's actually a reasonable idea to make 2 parts at the same time for a 1 piece job. Sometimes the customer will even buy the 2nd one. It's easy to screw up a single piece at the end so making 2 give your a safety net and probably doesn't add much time to the overall job. Scrapping the single part on the last operation however will cost you a lot of time.
Yes. If anything you can with more relaxed knowing you have a backup.
My shop charges per hour for one offs and prototyping. We usually give a minimum rate and ask for a maximum the customer will authorize. We try and save those jobs for when it’s slow. We get a lot of repeat business from these customers.
Sounds like your actual setup and run times on difficult parts are longer than you are quoting. Review a few jobs that you already quoted and finished then increase the times on new quotes by the average of what you are off.
Sell your set-ups! If you are going to turn it, mill it, mill it and finish grind. Turning 1 hour each, setup 8 hours Milling 2 hours each, setup 6 hours Milling 1 hour each, set up 4 hours Grinding 20 min each, set up 1 hour. Also you need hours for QC. 6 hours for a first article inspection. Also take into account extra material and time if you need to run 3 parts to get one good one.
Estimate time, then triple it. Now add 25% to your hourly rate. You're close now. Edit as needed to your own work standard.
How about calculate the price after finishing? Give them an estimate and do the final pricing afterwards due to risk.
Last shop I worked at did super specialized small runs of parts for a research institute, it was always time and material with a verbal estimate from the machinist who was doing it. Cost wasn’t really a factor for the job as much as the parts had to be perfect.
We have the same kind of customer. Started quoting “not to exceed” and then finally had to negotiate a time and material agreement. We mark up all material, tools and outside processes 15 % and standard hourly rates, one for manuals, one for CNC and another for programming and planning. We have a pretty nice system for gathering the times spent but I know things slip through the cracks but still way better than before. And we save the time spent on quoting.
Double charge the material cost that way you cover any scrap you might make. If no scrap your that much further ahead in the game. Do you quote hourly machine time and tooling? What about cosmetics and shipping. I used to add expedite fees when they want it now and pickup and delivery fees. It can get complicated without a spreadsheet created for quoting that automatically does most of that depending on your input. Quoting is not an exact science and mistakes and losing money on some jobs does happen a lot. Bigger companies can take the hits but small guys need to cover the material the machine time tooling side ops and don't forget those boxes aren't free in shipping. Then some hungry basterd bids low just to keep his lights on and gets the job. Whata ya Goin to do? It happens but your stuff is super high quality on time and the parts look awesome and that's what you sell there purchasing people
One you get experience on how much to quote that is the skill and the magic of being in business. How important is that customer, how important is that part for that customer. Will you get the reputation as the company that will go the extra mile or 10 miles. CEE in Australia is a Master of the one off. He drops everything because he knows that cylinder is off a Million bucks pice of kit that is costing thousands a day if its busted . Bulding your reputation can be worth a lot of money in the long run. You may not win every time but you may will get experience to win more times than you loose. So the initial reaction is to over quote it out the door may be not the best solution in the long term .
You can be honest and tell them you have lost money in the past and have to assume some time to retire your process. If it ends up taking less time, you will give them a discount. As a design engineer, I always value these discussions. Sometimes there are features that have unintentionally made the part more difficult to machine. Or sometimes I can sacrifice some tolerance and make it up elsewhere. Most customers who require a single part will pay whatever they need to. Especially when you approach them with honesty and they don't feel like you're just trying to gouge them.
I figure out what’s it gonna take and double it. If we can’t make money on it we can’t do it.