Rooster's Revenge

The quoting methods in the stamping industry are a blend of black magic and bullshit.

You have your good old fashioned Sight Method. That is where someone looks at the part and says, “That is a $250,000 die right there.” How the fuck do they know that? “Experience.”

Then, there is the Length-of-Line Method. You know that one. Measure some trim lines, a few form break lines, then multiply some random number to the length to get your quote. Now, if only you were selling line measurement services instead of stamping dies …

Next up on the list of fancy quoting tools is The Matrix. This works alot like an Ouiji Board. Find the row that has your blank area dimension, then find the column that has the number of stations. It points you to the price. You can almost hear some dead estimator whisper the price to you from the die graveyard.

My favorite is the BOM Method. This is the Bill-of-Materials-thing-a-ma-jig that bases the quote on a standard stocklist of items found in a tool. A guide pin here. A spring there. Keep in mind that the component prices are someone’s best guess and not real numbers. The theory is if you know the component costs, you can creatively guess at the cost of the tool. Somehow.

Here is where all these methods suck: The customer says your price is 30% too high. How could they know that? Using the above methods, you don’t even know if you are high, low, or somewhere in between.

Wouldn’t it be nice to go back to the customer with a rational breakdown to show them that your price is 5% above cost and there is no room to take out another 25% if they buy it at cost?

I would really like to see companies that are looking for a quote to build a die to stop asking for dollars and cents and start asking for hours and pounds.

Why?

Because the cost drivers in any die are machine hours and material pounds. It is that simple. Everything else has a direct relationship to machine time and material weight.

Estimate the 2D and 3D machine time (including wire and sink EDM, of course) and the amount of material required to get the job done, and you will be able to determine the real cost and prove that cost to the folks that think they can put the “your prices are too high” gun to your head.

My pal Eric Kam has an excellent post about estimating dies.

He is correct in that most shops do not know their actual costs to build a one-off stamping die.

Eric is also correct that the estimate of costs by these shops has a high degree of variation.

I think the intellectual argument he suggests is valid, but the culture of the die business will get hung up on the actual results. The problem is the die business estimates by essentially trial and error guesswork.

Two estimators five steps away from each other in the same shop cannot agree on the estimate, yet these die shops like to argue the validity of the cost from software.

My approach would be much simpler.

I would challenge the estimating department to a challenge. I would call it the “Faster than You” challenge.

Here is how it works:

Let’s say the die shop has five estimators. Give everyone in the estimating department the same product / press / process data to quote to their way.

Show up with five users of the estimating software. Give them the same product / press / process data.

Have everyone start estimating at the same time and clock the results. Without even being there, I know what the result will be:

• Each of the die shop estimators will finish at different times with the slowest taking 50 – 100% longer than the fastest.
• Each of the die shop estimators will arrive at a different cost. The difference between the high and low estimates will be at least 30%.
• Each of the software guys will finish at roughly the same time with the slowest taking 5 – 10% longer than the fastest.
• Each of the software guys will arrive at exactly the same cost. There is no variation in cost given the same product / press / process input.

My argument is two-fold:

1. The die shop’s own estimators cannot agree on the cost using what amounts to trial and error guesswork as quoting method;
2. Since the die shop lacks a structured process, the estimating times are as unpredictable and random as the cost estimate.

The focus should be on eliminating variation in cost and process time. Solve that problem and the software sales will follow.