How Can Manufacturers Improve the Quoting Process to Optimize Profitability?

Industrial equipment manufacturers face similar market challenges—almost all of the products that they produce are made-to-order. As manufacturers know, from cranes to elevators, from tractors to work platforms, from electrical switch gear to safety equipment, the majority of this equipment has to be specially designed and built to accommodate constantly shifting business requirements. Though customers require unique functionality, they want these complex, ever-changing machines commoditized so that they cost less and are rapidly available. Competition is fierce for manufacturers and quality is a given, so what provides a competitive edge? In other words, while speeding up the production cycle, while more effectively containing the rising costs of raw materials, and while adhering to ever-changing regulatory standards, what can better influence customer buying decisions and increase manufacturer profitability?

According to Brett Anderson, Regional Manager for I.B.I.S. , a Norcross, GA-based Microsoft® consultancy, “what gives manufacturers the edge in such a competitive, specialized market where costs are on the rise and quality is a level playing field, is to provide exemplary customer service.”  Anderson, who spent a decade in the engineering field prior to his work in software solution sales, says that “this begins with the customer quote.” As Anderson puts it, “the manufacturer is ahead of the curve if it can  provide accurate cost up front to start to clearly communicate with customers, while simultaneously crafting a dynamic, ‘living’ demo of what the product will look like—all of this long before the point of sale.”

Unfortunately, to-date, a great burden has been the ability, in Anderson’s words, to “deliver rapid but accurate, product quotes and initial designs with all information present throughout the planning, design and build cycles.” This is because, as manufacturers are well aware, “a lot of hands are on the process.” Anderson says, “of course, different departments supply the costs for the quote for parts, engineering, building and post-support, disparate systems model the numbers for the forecast.” In addition, “appending all of this complex information to the now-required 2D and 3D designs which illustrate the end product is typically a disconnected process.” Not to mention the fact that offering, in such a competitive landscape, according to Microsoft , “unique or flexible billing processes to (the manufacturer’s) best customers, and being able to deliver after-sales services that ensure that installed products continue to perform” is also a must. This is a lot for the manufacturer to encompass but, in Brett Anderson’s words, “it now must be there—one major price or design miscalculation, an inflexible billing process, or one lost customer can cost the manufacturer hundreds of thousands to even millions of dollars.”

Agile, integrated computing solutions have emerged which are able to better facilitate customer quotes. As Microsoft puts it, “Effective software tools can help you create a virtual enterprise for a smarter exchange of information and resources between design, manufacturing, suppliers, and partners.” Brett Anderson elaborates, “If this can be achieved within one system, with RFQ tools, product lifecycle management (PLM) models, CAD design systems and customer relationship management (CRM) built in, the process is essentially revolutionized.” Microsoft is “aggressively supporting the requirements to this market with the Microsoft® Dynamics® AX (formerly Axapta) business management suite,” According to Anderson, “where I have seen a great advantage for manufacturers in Dynamics AX is that, while all industry-specific functionality is built in, the tool set is Microsoft; therefore, it looks and feels familiar to all business teams, and the system is flexible so it fits the manufacturers unique processes and does not make the company fit the software.” This, he says, “makes all stakeholders feel more comfortable with the tool and less likely to make errors.” Adding data to one fully-accountable system, and familiarity with the tool set, is the key to accuracy. “The customer is best served by receiving precise information quickly at each interval so that they can commit earlier.” According to Microsoft, “Enhanced communication enhances the overall buying experience.” In turn, Anderson says, “Profitability comes through the strengthening of the customer relationship through more timely and effective communication—it results in faster purchasing decisions and loyalty.”

1  I.B.I.S., Inc. is a multidisciplinary Microsoft® solution provider which has twice been honored as Microsoft U.S. Partner of the Year, and in 2007 as Worldwide Microsoft Partner of the Year (for Microsoft® Dynamics® GP). 2  From “Industrial Equipment Manufacturing: Optimizing processes for building complex products.” Copyright © 2008 Microsoft. All rights reserved.

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