Author: Ben

The metalworking industry has undergone a number of innovations in recent decades. Many companies knew how to take advantage of this but a few missed the boat and had to close their doors. Its a shame, but there is nothing to do about it. This is typical of an industry that used to consist mainly of pure crafts and has now been under pressure for so long.

Unfortunately for some, the innovation will continue. Others can benefit from this on a large scale. What awaits the metalworking industry in the near future, how can you anticipate this, how do you stay ahead of the competition and how important will the original metalworking craft remain?

From low mix and high volume to high mix and low volume

Long before the advent of the digital age, people often went to the local entrepreneur for metalworking. One entrepreneur was good with sheet metal and the other with welding or pipes. You knew that and if you needed multiple operations, you went to different companies.

The estimation process was simple and fast. The metalworker estimated the required kilograms of metal and calculated the number of man hours, which together gave an estimate of the costs. Often with the announcement that more or less work could be charged.

Price pressure due to competition was often not an issue. Not a fast delivery time either. The work had to be done and the local reputation secured the customer’s favor. It was a time when the metalworking industry delivered a low mix and high volume of operations, but then about 30 years ago that changed quickly.

The combination of digitization and better and more affordable machines resulted in a shift towards a high mix of operations and a low volume. Metalworking companies bought more different machines to offer the customer a total package, which had major consequences for supply and demand in the market.

The diversity in offer results in much more complex quotations

Suddenly it was no longer the local reputation, but the diversity in offer that caused the contract’s awarding factor. Because why would you visit 5 companies, if you could also go to 1 metalworking company? The trend was set and soon the entire market had to follow suit.

Digitization within the metalworking industry caused the next revolution in supply and demand. Although 2D drawings are still used today, a 3D CAD model has become the norm. Metalworking machines are digitally controlled on the basis of these files and knowledge of the operation of these machines is often more important than knowledge of materials and operations.

An additional advantage for the customer is that he can now request a quotation from various parties. Based on price and lead time, the order is awarded to 1 party and the other parties have done a lot of estimations and preparation work for nothing.

The expansion of the metalworking supply was also driven by growing demand. This is usually a positive development, but if on average only 1 in 5 requests leads to an order, this is accompanied by a high workload in the department where quotations are made. If you are unlucky, enough quotations are sent in a week, but there are too few orders, which means that the production line comes to a standstill.

Another disadvantage of the expansion of the metalworking range is that it is quite a challenge to keep all metalworking machines in continuous production. Complex and sometimes expensive ERP implementations help to optimize the production process, but do little to prevent funneling. The bottleneck is and remains the processing of complex requests for quotations and the necessary work preparation.

For most metalworking companies, the difference between making a profit or a loss is how quickly the company is able to prepare a competitive quotation. Then it is about the production efficiency and reliability of delivery. If one of these three is not optimal, red numbers are lurking and the competitor takes off with the profit.

3D models are simultaneously a blessing and a curse

With the advent of 3D CAD models, manufacturers of metalworking machines were forced to control them with CAM systems. This is ideal, because this means that a very large part of the processing takes place fully automatically. But there is also a negative side to this. Each supplier has its own CAM system and if you have a wide variety of products, you are also forced to work with different CAM systems. That should not be a problem, provided the supplied 3D files could be read in full. Unfortunately, this is exactly where the shoe pinches, but there is more to it.

The designer of a 3D file gives all kinds of characteristics to the design. Such as type of material, color, thickness, finish, etc. But once ready, the file is converted to a universal Step format so that any 3D package can read this file. The problem is that with the conversion of this rich file, all the characteristics are lost. A major problem for which the industry still has no solution after decades.

As an estimator and work planner you have to manually enter the characteristics to know what the intention is. This is, of course, very time-consuming and sometimes complex. Sales, which is responsible for processing quotations, sometimes need very specific and often technical knowledge that should actually be used on the production floor.

How do you maintain a competitive advantage within the metal industry

Most of the metalworking companies that still exist have managed to adapt well to the rapid developments of recent decades. But that doesn’t mean they have or can maintain a competitive advantage. Because you cannot simply win the battle for the customer in the future by expanding the machine park.

More machines mean even more complexity in the quotation process and work preparation. In the near future, metalworking companies can only survive if they respond smartly to three crucial aspects.

1. Speed of processing quotation requests
2. Speed and efficiency of production and delivery
3. Investing in platform technology

Speed of processing quotation requests

In the ideal world, as a metalworking company, you would like to be able to read in any 3D file, after which a specified estimation will automatically roll out. If necessary, you as sales make a few manual adjustments and after a final check, you send the quotation, including delivery times, to the customer.

In this way, it is no longer the art to process all quotation requests, but to get enough quotation requests. Because with this you keep the production line running at full speed and you can shift the focus to expanding the range.

This ideal world already exists in the form of the Quotation Factory. This smart metalworking estimation software has exactly the right intelligence under the hood to almost completely automate the quotation process. Including delivery times and prices from suppliers.

Speed and efficiency of production and delivery

The speed and reliability of delivery and the efficiency of production and logistics will be crucial in the near future. Expensive metalworking machines must run at a minimum of 90% capacity, but must also not be overloaded, which jeopardizes the delivery time. In addition, smarter logistics can make the difference between a competitive quote or a quote that you price out of the market yourself.

This is a logistical challenge to which many metalworking companies are not yet responding sufficiently. Not in the last record because they are still playing around with the preliminary phase. What is needed here is smarter and automated work preparation and planning tools. The complexity due to the number of machines and operations will only increase and that means that work preparation and planning can no longer be done by people.

Although smart ERP systems sometimes take advantage of this, they unfortunately still fall short. That’s because they are essentially not designed to work with 3D files, specific CAM systems and suppliers. Something that is crucial to estimate processing time, capacity and total lead time.

The Quotation Factory software can also offer a solution here. The link with the ERP system and the various CAM systems gives the metalworking company insight and control over the entire process. Including the required processing time, capacity and the total lead time of the entire production.

Investing in platform technology

Digitization has resulted in sleepless nights for many metalworking companies and has not only yielded benefits. But this may be the case in the near future.

Within the metalworking industry there has been talk for some time about the factory where the lights are out. The work floor is automated in such a way that almost no human hands are involved anymore. But the next step is that the lights can also be switched off in the sales department by using platform technology. This paints the following picture of the future:

Customers request their quote online and receive their quotation, including lead times and delivery date, without human intervention. All metalworking machines are connected to the Internet and have become IOT (Internet Of Things) devices. With all the associated benefits.

As a result, metalworking can be accommodated with machines that still have capacity somewhere in the country. The entire chain is connected, making delivery problems a thing of the past. Even if one machine is defective, another machine effortlessly takes over, so that just-in-time delivery can be 100% guaranteed.

The front door of the metalworking company is no longer a physical door, but the platform on which the customer makes his request. The employees will focus on supporting the customer and can use their specific expertise for innovations instead of routine work. This shifts the distinguishing power and competitive advantage from having the largest supply, to offering craftsmanship and artisanal skills. The rest is due to the platform technology and perhaps that is exactly what the metal industry needs.

The Quotation Factory believes that it is not a question of whether these developments will take place, but when they will take place. For that reason, it has developed a platform that is already taking the first steps in this direction. Namely a customer portal where customers can already request their own quotations, which are prepared for most standard operations without human intervention.

This is just the beginning and intelligence of this portal is getting smarter every day. Ultimately, this will lead to a new revolution within the metal industry. But until then, it is up to the current players in the market to anticipate this.

Quotations and estimations consume time for many metalworking companies. A lot of time, and valuable time, at the expense of commercial agility. But also time that you would like to save and have spent differently. Recognizable? A fast, smart and easily accessible estimating and quotation tool can help. Although this solution must meet several characteristics.

You know the success stories of the large enterprises within the metalworking industry. Digitalization transforms them into smart factories; implementation of new, digital technologies brings and keeps them ahead of the curve. And while hearing and reading about it, you wonder: what benefits can we gain from it? Obviously, you don’t want to miss the boat. Certainly not now, in a time when also in the metal industry the customer increasingly expects faster lead times from its suppliers.

Your ideal quotation tool

So imagine getting started with a well thought out online sales tool. With a solution that makes your entire estimating and quotation process faster and smarter. What should such a tool do?

1. You get to do what you’re really good at

The quotation process almost always starts with complex, digital 3D drawings. In addition, new, “richer” files are being added, such as JT Open and STEP 242. Sales representatives or work planners quickly spend hours reviewing, figuring out and estimating inquiries. All the while, those same valuable employees, usually with backgrounds as engineers, can pick up other important work within the organization. A good sales tool saves time and lets people do what they are really good at. Advising and assisting clients, for example! It thus contributes substantially to the success of an organization.

2. Self-learning and growing smarter

The metal industry today has a number of successful online sales portals. A lot is also happening in the area of managing local CAM systems via IoT technology. If an (independent) quotation tool can analyze exactly what operations are required, then it is also clear what the workflow will look like. Combined with IoT technology, a factory then has a high accuracy of manufacturability and estimations when requests are made. Combine these insights and precision, and a factory has at its disposal a smart closed-loop system that keeps making itself smarter thanks to the constant feedback of data.

3. Ease of use across any screen

Regardless of the advanced, underlying technology, a sales tool must also work flawlessly for the user on screen. The importance of a clear “user interface” cannot be underestimated. A user should see only what they really need and be able to zoom in on details when they want more depth. In an era where everyone is used to the user-friendly functionality of apps on smartphones and tablets, the user interface of a quotation tool must match accordingly. This calls for a single interactive entity, where the user receives constant feedback. It is a condition for successful use and therefore a must for your solution.

4. Alternative to expensive customization

Digitalization of processes can help metal companies offer a smooth and fast quotation process, that much is certain. So several well-known parties are already making it work. Although, for now, it seems only big players can afford it. After all, customized solutions require high investments that are out of reach for smaller metal companies. Yet this does not have to imply that they cannot be at the forefront of the market. A standard estimation tool in the cloud makes state-of-the-art technology readily available to a large group of metal processing companies. This tool can also be implemented very quickly and, in any case, works just as well with as without an ERP system.

5. No worries on IT management and security

Choosing new technology consequently often requires a high, initial investment. And yet, it is not necessarily required when you can use a solution in the cloud on a subscription basis. As a result, you only pay for usage and no longer have to worry about things like your own servers, security, IT management and updates. Simple and easy to use: with such characteristics, there is little stopping you from discovering what a subscription-based quotation tool can bring you. Especially if you can try it out on a trial basis beforehand!

Quotation Factory: The sales tool for every metal company

With the online quoting tool the Quotation Factory, estimating becomes a breeze. The tool with customer portal will be available to any metalworking company starting this spring and includes all the features described above. Thanks to smart recognition of used raw materials and required processing, the solution estimates directly based on supplied geometries. And all based on the facility’s own factory capabilities and variables.

Curious about the Quotation Factory? Contact us. We’d be happy to show you the opportunities and tell you more about a trial subscription.

More than 600 million euros a year are spent by metalworking companies in Europe on quotation-related software. Yet the more than 30,000 metalworking companies (small and large) struggle to respond to quotation requests quickly and consistently.

This is according to research, which has also uncovered that the quotation burden is greatest at workplaces with more than 20 FTEs. The main reason is that these companies usually employ at least 2 highly skilled and experienced FTEs, who are unable to convert the large quantity and wide variety of incoming CAD drawings into outgoing quotations.

Why is quoting so difficult within the metalworking industry?

Actually, quoting is a difficult job within many industries. Dealing with variables, price pressure from competitors, and dealing with manpower are just a small part of the challenge. But within the metalworking industry, it is especially difficult because many applications consist of assembled products made from different materials, some of which are also not all manufactured in-house. This requires craftsmanship in some cases and that is in short supply.

Here are the top three quotation challenges within the metalworking industry:

1. Quotations are time-consuming and labor-intensive
   It is time consuming to manually figure out which components, parts and labor are to be quoted. This results in a very long and costly lead time for each production, with no assurance that the order will be obtained.

• Simple quotations already require more than 1 hour of intensive work;
• Most of the time is spent on determining technical details, thereby losing focus on commercial changes;
• Manual data entry in ERP systems is labor intensive and error prone.

2. A lot of expertise is needed because of the complexity
   Estimating complex quotations requires salespeople with extensive technical experience and considerable knowledge of materials and production. They are hard to find and expensive to hire.

• The experience required to make quotations is not always present in the workplace.
• The necessary skills in CAD software, Excel formulas and ERP systems are now and in the future will be scarce.

3. Inefficient use of capacity
   Undercapacity of the quotation department can lead to overcapacity in the manufacturing floor. It can even lead to the complete production process grinding to a halt.

• Customers don’t receive a quotation for days or even weeks (or not at all);
• Conversion rate of much less than 50% is common;
• The sales process is the bottleneck to a better utilization of manufacturing equipment and capacity.

How can you make quoting easier and faster within the metalworking industry?

Most companies operating within the metalworking industry spend a lot of money on expensive software subscriptions each year. By doing so, they try to support the quotation process, but this is often not sufficient. Creating quotations is a profession and requires very specific software and knowledge.

“Companies that do invest in the revolution of digitizing their quotation process will have a huge competitive advantage.”

Within the metalworking industry it is necessary to have software that meets the following 3 criteria:

1. The quotation process must be fast and consistent
   You want instant insight into materials, machines, manufacturing stages and price estimates to shorten the lead time of a quotation. This also contributes to more accurate planning, consistency and efficiency throughout the entire production process.

2. Automatic recognition
   You also want (fully) automated recognition of parts, assemblies, and features from CAD files to save time of highly skilled and high-cost employees who create quotations. In addition, you want to store that data in the cloud to interact with various ERP and CAM systems.

3. A customer portal
   Allow quotation requests to be generated by customers themselves in a customer portal. This also generates sales leads and again saves time for those employees creating quotes.

The best solution to simplify quoting and make it more efficient.

The Quotation Factory only does 1 thing and it does it well. Even better than anyone else. Namely: quotations within the metalworking industry simplify and make it more efficient by offering a cloud-based native software solution. A quotation solution developed in-house and improved every day.

Imagine:

• Less than 5 minutes work to list 40 entries;
• ZERO time spent determining geometric cost drivers;
• ZERO time spent on data entry in ERP system;
• The quotation process almost 100% automated, manual intervention still possible;
• A system that learns from production floor data and improves itself along the way;
• No one needs to learn additional systems (such as CAD software, Excel, ERP system);
• Customers always receive instant quotes, within minutes;
• A sales conversion rate that rises to more than 70%.

This and much more is possible. Meanwhile, your competitor is already ahead of you. The only question is when are you going to catch up with that competitor. Even if you are not afraid of any competition, you at least want your – potential – customers to benefit from this technological revolution.

The Quotation Factory (then operating under the name Metal Heaven) was the winner of the Technishow Smart Potential Award. We received this incentive award on Wednesday, March 4 during the third edition of the Evening of the Manufacturing Industry in the Jaarbeurs Utrecht (NL). The jury of the TechniShow Innovation Awards found the Rhodium24 platform of the Quotation Factory so promising that it had specially initiated an additional award.

The TechniShow Innovation Awards are an initiative of industry association FPT-VIMAG, Koninklijke Metaalunie and Rabobank in cooperation with the Jaarbeurs Utrecht. Traditionally, the awards ceremony takes place during the Evening of the Manufacturing Industry, where everything revolves around smart, technological innovations within manufacturing technology. This year, fourteen nominations had a chance to win an award, divided between the categories Dutch Tech and New Tech.

Efficient estimations and quotations for metal processing

With Rhodium24, The Quotation Factory offers online estimation software with a web-based portal functionality that allows companies in the metal processing industry to efficiently make estimates and quotations. With the Rhodium24 platform as its entry, The Quotation Factory was nominated for the New Tech Award. While the company did not win this prize, it did receive the Smart Potential Award at the Jaarbeurs Utrecht in the presence of some 200 guests.

‘Applicable to all manufacturing companies’

“The innovation of the Quotation Factory is not yet fully market-ready and still under development,” the jury report stated. “But because everyone on the jury found the entry so promising, we created a Smart Potential Award. Think of it as a kind of incentive award. The beauty of Rhodium24 is that it is applicable to all manufacturing companies. Even small companies can keep their competitive edge. It is an interesting tool to enable the step towards chain integration because the (commercial) first part of the total order process is strongly digitized.”

Smart Industry for everyone within the metalworking industry

Ed Klijsen, commercial manager of The Quotation Factory, is naturally proud of the incentive prize he has won. “We want to cater to the market in the best possible way and make Smart Industry accessible to the sales component of every metal processing company. This award underlines that we are on the right track with this. The award is meant to be an encouragement and that’s how it feels; as a widely supported endorsement by the entire industry.”

In September at TechniShow
The Quotation Factory will showcase Rhodium24, along with partner and software specialist AESC, at the upcoming edition of TechniShow. Because of the coronavirus, the exhibition for the manufacturing industry has been moved from March to September 1 till 4 in the Jaarbeurs Utrecht, the Netherlands.

For more information, see also the FPT-VIMAG and MetaalNieuws (in Dutch only).

The Quotation Factory has a chance of winning a TechniShow Innovation Award. Together with nine other companies we are among the nominees for the New Tech Award 2020, as the jury announced on Monday 27 January. The Quotation Factory earned the nomination to its platform, which helps metalworking companies with a fast and efficient quotation and estimation process.

The TechniShow Innovation Awards are about more than just handing out a prestigious prize. The event brings together the latest innovations as a guide for the manufacturing industry. “Anyone who is nominated has confirmation that they are on the right track,” says Ed Klijsen, commercial manager of the Quotation Factory. “That fact alone makes us particularly proud of this nomination. We see it as a valuable encouragement to continue with our development for the metal industry. “

The Quotation Factory at TechniShow

The presentation of the TechniShow Innovation Awards – including the New Tech Award – will take place during the Evening of the Manufacturing Industry on March 4 in the Jaarbeurs Utrecht, the Netherlands. The Quotation Factory already gave a pitch to the jury at the beginning of February. Of course the Quotation Factory will also be exhibiting at the TechniShow tradeshow, together with its partner AESC. This year TechniShow will be held from 17 to 20 March in Jaarbeurs Utrecht (NL). Visitors can visit the AESC and the Quotation Factory at stand C0024 in hall 10.

Also published on MetaalNieuws and MetaalMagazine (in Dutch only).