As one of the most important areas of print, estimating can be a complicated process. It involves the gathering and consolidation of variable data across the organization, from the cost of materials to equipment usage, to generate the projected price of a print job. The quote delivered to the customer needs to reflect the total cost of the print job and the specific profit margin that you want to achieve.
The trouble is that every print company has its own set of people, processes, and systems that impact the production cost of a job, and the price can vary significantly from one operation to another. Calculating costs and managing pricing should also be unique to each business; otherwise, potential clients won’t end up with accurate estimates.
Real-Life Examples of Estimating Mistakes
Back in the day, one or more estimators would be responsible for creating estimates or quotes for print jobs that could take a week or more to produce. Today, no matter how busy a shop is, that kind of delay costs you the sale. The first estimate received by the customer is usually the one that is accepted— provided the cost included for the job are within reason.
Inefficiencies in the estimating process have an impact on the accuracy and timeliness of every single quote that leaves your print shop. In a recent post by print software expert Jennifer Matt, she writes about the importance of accurate estimating. She cited some real-life examples that she has come across in her role as a print software consultant. Here’s one example:
“After creating the estimate in our Print MIS, we print it out and give it to our salespeople to review. They have their sales assistants’ re-type it in Word, who then print it out and scan that back into our Print MIS as an attachment.”
This case of duplicate data entry is a huge waste of time and drain on resources when it comes to estimating. The more manual interaction your people have with estimates, the more opportunity for errors, mistakes, and bottlenecks. Although it might seem small, this redundancy will mess with your scheduling and confuse production, resulting in duplicate (or missed) orders, production delays, and unhappy customers. Another example that illustrates a current problem with estimating and quoting is this one:
“We haven’t added our new machines into our Print MIS yet, so we estimate everything on a single press—we figure it’s close enough.”
According to Printing Impressions, industry studies have consistently shown the average printer’s net profit is between 1-3%. “Close enough” is not going to help you increase those very thin margins. In this example, the printer is clearly taking on projects that result in less than average profits because they simply want to keep production flowing. But the reality is, this is costing you more and more in the long run. If you aren’t factoring in the cost of new machines, what else are you not calculating?
Analyzing Your Current Estimating Processes
If you see yourself or your current estimating processes in these examples, it’s time to take a step back and assess your operations. Throwing more people at the estimating backlog is never the best way to proceed. Instead, what you should be evaluating is the technology and systems you have in place to build and manage estimates.
- Do you have bottlenecks in your estimating department?
- Do you need a professional estimator to build a simple quote, or can your salespeople do it?
- How easy is it to navigate and access data in your estimating solution?
- Are the costs and information you use in quotes and estimates pulled from real-time data?
- How long does it take to build and send a quote to a customer?
- How are changes to order specifications handled in your current system?
- Are you able to run any reports to evaluate your estimating efficiency?
- Is your current solution JDF compliant?
- Can your estimates be easily converted into a work order for production?
To increase the speed and efficiency of your estimates, you need an integrated print MIS/ERP system with estimating capabilities. Depending on the level of sophistication, accessibility, and ease of use, an estimating solution can speed up the process, increase accuracy, and minimize the need for professional estimators. They can even allow sales reps to produce an estimate for a typical job in real-time with a customer.
How Your Estimating Process Can Help – or Hurt – Your Business
The purpose of using a specific print estimating tool, as opposed to a standalone estimating system or a series of Excel spreadsheets, is to:
- Reduce time-consuming duplicate data entry and manual processes
- Automate key components of the estimating process
- Easily access up-to-date pricing and customer data
- Create standardized templates for repetitive orders
- Improve the flow of jobs from estimate to production to delivery
- Deliver fast, accurate estimates and quotes
By using a single platform to manage your entire business, you will save time, reduce the potential for error, increase production efficiency, and make life easier on your estimators and sales team. To learn more about the importance of integrated estimating software and its impact on your bottom line, our experts have shared their knowledge and insights on the technology in an informative whitepaper.
More Efficient Estimates — More Profit
We’ve included an overview of why standalone estimating is not effective and how integrated print MIS/ERP software provides a platform to produce faster, more accurate estimates and quotes, which increases your bottom line. If you decide that print MIS/ERP is the best option for your business, we have also outlined what specific estimating functionality to look for in an integrated print management system.