Estimating material consumption within the metalworking industry: from a tough job to smart estimations

Estimating material consumption and determining purchase costs, go figure as an estimator within the metalworking industry. It is an increasingly complex and time-consuming challenge. But it can also be different. Smart digital solutions make it possible to simplify and speed up the quotation and estimation process. How? We outline the latest developments in this blog.

Why has estimating within the metalworking industry become complex?

Estimating in the old-fashioned way? Today is a big deal. Just consider estimating material consumption at the beginning of the process. The steps you have to go through have only become more complex.

This is primarily due to the fact that metalworking OEMs are increasingly demanding more from their suppliers. Manufacturers are responding to this, increasing the amount of different operations and types of materials. And that means more thinking and calculation for the estimator, because he has to take into account more details.

To prepare a quote, the estimator must take into account at least 3 factors:

Fluctuating material prices have a major influence on the quotation

The processor of the request is continuously confronted with fluctuating material prices. And not just a little. Prices have risen sharply in recent years. So hard, in fact, that the calculations in a quotation that has been open for two weeks may already be outdated by the time the requesting party agrees.

The days when an estimator knew a kilogram price by heart are over. It has everything to do with what is happening in the world right now. Scarcity, the pandemic, supply chain congestion and rising transport costs are just a few of the causes.

A lot of buying parts means a lot of searching

Another development that ensures that an estimator has its hands full is the changing demand. Because factories can handle more and more operations, it is becoming more interesting for the OEM to leave the entire assemblies or sub-assemblies with the manufacturer.

This can involve many purchase parts, from bolts to nuts and from hinges to wheels. Bring on the price, reads the question. This also takes extra time away from the estimator, because they have to do more and more research: who can deliver what at what price?

Order via a user-friendly customer portal

Once that’s all done, it’s time to order. That has also become a more intensive process. Suppliers of raw materials and purchased parts have been allowing their customers to order through customer portals for several years now. Self-service sounds convenient, but in practice it means a lot more work for the metalworker’s estimator. After all, he now has to find his complete order himself, working his way through the forest of article numbers and prices.

Apis provide a big part of the solution

APIs provide a big part of the solution

Fortunately, further digitization offers a solution. Suppliers deploy an Application Program Interface (API). This means that as a manufacturer you do not have to go through all those customer portals, because by ‘talking’ to APIs you are connected to the systems of various suppliers. That is a big advantage: it offers a total view of the various suppliers and their prices and delivery times.

Thanks to this development, the concept of preferred supplier is also changing, because you can easily do business with a wide range of suppliers. And that is great in times of scarcity and changing prices. Because who can supply at all and what is the best price?

Automatically manage item files from different suppliers

Thanks to artificial intelligence, it is even possible to automate the ‘matching’ of article numbers. The computer does the work for you; it understands which articles belong together and can also take the management of article files off your hands. It makes it even easier for you to do business with a multitude of suppliers. This creates a more dynamic supply chain.

Exchanging data via SCSN

The developments continue. Increasing digitization of this process is taking place at a rapid pace. A facilitator of that progress is the Smart Connect Supplier Network (SCSN), a data standard that makes the exchange of information in the supply chain more efficient. This allows companies to share data more easily, faster and more reliably, without the intervention of an API. You simply communicate via your own ERP system.

This fastest growing data network for data exchange is a Dutch initiative; it is expected that by 2030 there will be a European standard for digital communication for the manufacturing industry. Anyone who does not go along with the increasingly digitizing supply chain has been seen. It’s digitize or die.

The real solution is fast estimating with smart quotation software

The real solution is fast estimating with smart quotation software

If you, as a metal worker, have all this done, your purchasing process will be extensively digitized. You have a range of options for smart ordering. In real-time you can see who can deliver what, who has what in stock and what the prices and delivery times are.

There is one but: supplying the input for a search, and prior to that estimating your material consumption, is still human work. You still have to manually enter the characteristics into the ERP system, based on the digital drawing, which you must therefore carefully ‘read’.

Forget this intensive and time-consuming task. Because also in this case there is a smart digital solution. There is now software that enables the estimator to automatically derive all geometric features from digital drawings. Simply upload 3D and 2D CAD drawings of parts and assemblies, specify material and quantities and the rest will be recognized and organized automatically by this tool. This way you know exactly which materials and parts you need, complete with all the detailed features.

Estimating has never been so quick and easy.

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