Job quotes inspire DfM
Looking at how machinists quote jobs inspires thoughts of how Design For Manufacturing can save money for all products.
As an electronics designer, it’s interesting encountering other parts of the manufacturing industry and how they operate. One of my favorite ways of doing this is via YouTube. Sure, I get a flavor of different industries via meetups (including our own HDDG meetups…which we also happen to post on YouTube). But seeing people make things on channels like Jimmy DiResta, Clickspring and AvE gives insight into the modern machine shop. Each has their own style and ultimate purpose, be it doing custom contract work or focusing more on hobbyist work.
The one I watch most frequently is NYC CNC, primarily because this is how I began learning Fusion360. John, the founder of the channel, covers all manner of content around running a contract machine shop. A recent video was about pricing parts and John asked (almost quizzed) his audience on how they would charge for components:
In the video, they cover the various operations required to make the part. There are different tool heads, work holding methods and feeds/speeds that will produce a high quality part finish without taking an excessive amount of time on a machine.
A view from the other side
The discussion in the video felt weird to me. Of course there isn’t a set price; they are quoting for a custom part with many unknowns! But I am not used to this practice.
It makes sense that machine shop owners have to take on estimating job costs before actually completing the job. Too low of a price and they would lose money on the job. Too high and they might never get the job in the first place.
So even though we talk about quoting on the Supplyframe Hardware blog, it’s from a different perspective.
For EEs, quoting feels a bit more fixed
As an engineer, I’ve never had to deal directly with quoting for customers. I’m always in the middle of the machine, not on the outer edges that deal with entities outside of the business.
On the selling side, I was working on (designing/manufacturing) a finished goods product. There was no variable pricing. If there was, it was at the discretion of the salesperson trying to gain extra margin or win a quote against a competitor. They were selling something finished that was in a box, ready to ship out to the world. The internal price was set, based on overhead, material costs and perceived value. Even still, the products normally competed in inefficient markets. This meant there was not sufficient competition to drive a “standard” price.
On the buying side, I’ve gotten quotes from CMs and OEMs on many occasions. This is a standard process; I submit a Bill of Material (BOM) and build instructions and then get back a quote at some point in the future. I rarely, if ever, have knowledge of the inner workings of the company doing the quoting. I know there is an aspect of variability in their pricing, but I have no visibility into the details. The best case scenario is if they estimate assembly times and I can audit their assumptions. At the end of the day, most quotes are “take it or leave it”. I have to assume their estimates are true and that they are attempting to get me the best price, simply because I will go with another vendor if the price is too high.
The process matters
Although I don’t have control over how things are quoted to me or external customers, I do have some control. The primary one is understanding manufacturing processes and assembly methods and then using that knowledge to change my designs.
In the example video above, John talks about the various processes that were required to machine the part. If there had been a bunch of other 3D shapes (like curved surfaces), it would have required finishing passes that would have taken a much longer amount time. The person who designed the part understood the range of operations needed and optimized for as few passes as possible. This keeps costs down.
For things like assembling circuitboards, it can be useful to understand the constraints of the assembly process. For example, if you understand a particular Pick and Place can place 38 individual components and your design has 40 components, there is going to be an additional setup stage, increasing the overhead costs for a board. This matters less for super high volume products (which might also have multiple PnP machines in line in order to serve the job), but it can affect lower volume jobs.
I read the comments
You did what??
Yeah, I read the comments on that YouTube video. Sometimes reading other peoples’ ignorance helps to offset my own.
There was pushback on the numbers quoted, specifically the total cost of the job. That is similar to resistance I’ve had to quotes in the past. The final price (for the job or even cost per piece) is different when there is no understanding of the work involved.
Viewing each variable, such as overhead costs, time per operation, total number of operations required and raw material costs means that there are some hard numbers involved. Unless you lower overhead (a long term process), use lower cost materials (which lowers quality) or reduce the labor costs involved (by hiring cheaper labor or reducing setup times), the real costs start to add up to a realistic estimate.
In past articles I’ve written about a quote being a way that a vendor is pushing you off because they don’t want your business. So maybe they’re not telling you to “scram” after all. Maybe you just don’t understand what they’re really quoting you on.
Developing partnerships with a manufacturer will increase the efficiency of moving a product from the design stage to the manufacturing stage. Having in-house manufacturing will allow for the maximum amount of design for a particular practices. This is not realistic for most product design operations. Simply having a conversation with your manufacturer about ways to optimize their processes will bear fruit for future designs.
The more you understand about how your product will be manufactured, the more you will understand about the costs go into the manufacturing. Using generally accepted Design For Manufacturing (DfM) best practices will also reduct your overhead. We think about this concept as “Hardware Vocabulary”. Understanding the various ways a thing can be manufactured helps to understand how a particular thing should be manufacturer. We’ll talk about that more in future articles.
Do you quote externally? Do you deal with vendors directly quoting to you on a regular basis? How does it go? Let us know in the comments!