In this guide 6 sections
The quote assumes a clean run. The floor adds longer cycle times, repeat setups, worn tooling, rework and outside processing that nobody priced. A job costing record that captures actual spindle hours, setup minutes, scrap and vendor charges per work order shows which assumption failed.
The quote prices a perfect job
An estimator builds a quote from a drawing. Material comes from the bar or plate size, and cycle time comes from a program estimate or from memory of a similar part. Setup is a round number. Tooling is a small allowance.
Each of those inputs is reasonable. Together they describe a job where the first piece passes, the tool lasts and the vendor delivers on time. Few jobs behave like that.
The gap between that picture and the floor is where margin goes, and finding it needs numbers from the shop, not from the quote.
Cycle time and setup against what the machine did
Quoted cycle time usually assumes the CAM figure. The machine runs slower because of feed overrides, tool changes, probing routines and an operator who is careful with a new program. Proven programs on a repeat order tend to run faster, so the first batch carries the cost.
Setup is the larger surprise. A five axis part with two fixtures may need a prove-out, a first article inspection and a second setup for the back side. Record setup minutes separately from run minutes on every work order.
Spindle hours from the controller beat hours written on a card by an operator who rounds up, rounds down and forgets the twenty minutes spent hunting for a gauge.
- Quoted and actual cycle time per operation
- Setup and prove-out minutes, split by machine
- First article inspection time
- Idle time waiting for a gauge or program
Tooling, rework and outside processing
Tooling hides in overhead. A job in Inconel or hardened steel eats carbide inserts and end mills that a quote priced like aluminium. Log tool life by job, even roughly. The next estimate then starts from fact.
Rework comes in two kinds. Scrap is a lost part. Rework is a part that returns to the machine after the CMM report fails a bore or a flatness callout. Both cost spindle time that no one invoices.
Outside processing is the third leak. Heat treatment, anodising, plating and grinding are quoted at one rate and invoiced at another. Delays push the final delivery and add expediting. Attach each vendor purchase order to the work order it serves, so costs land on the job and not in a general ledger line.
What a job costing record has to capture
Keep the record small. Operators will fill it only if it asks for material issued, setup and run minutes per operation, scrap count, rework minutes, tooling consumed and outside charges.
Each field needs an owner. The operator logs time and stores issue the material. Quality records scrap. Purchasing links the vendor invoice. A record with no owner stays empty.
At close, put quoted and actual side by side for each cost line, and within a month a pattern appears that no single quote would have shown. One shop finds its setups are always underpriced, while another finds that one customer’s parts always need rework after the CMM report.
- Material issued against the work order
- Time by operation and machine
- Scrap and rework with a reason code
- Tooling and vendor charges tied to the job
Feed the findings back into the estimate
Update the estimating sheet from the last twenty closed jobs, not from instinct, and adjust setup times by part family with a tooling factor by material.
Then review the quotes you lost on price. If actuals show your numbers were right, you have a reason to hold the line.
Start with one machine and one month of work orders. That is enough to expose the biggest leak.
Quoted versus actual job cost sheet
One page, with a row for every cost line of a closed work order and columns for quoted value, actual value, variance and cause. Rows run through material, setup minutes, cycle time, tooling, scrap, rework, outside processing and inspection. A footer names the single largest variance and who will act on it.
Open a blank worksheet to printQuestions owners ask
How many closed jobs do we need before the data is useful?
Ten to twenty jobs in one part family usually show a pattern in setup and cycle time. Start there before trying to cover the whole shop.
Should operators enter time by hand or from the machine?
Controller data is more honest for spindle hours. Operators still need to log setup, rework and waiting time, because the controller cannot tell why a machine stood idle.
Why do repeat orders still miss the quote?
Tool wear, a changed material lot or a new fixture can undo what the first run taught, so file the last run’s actuals under the part number.
Where does outside processing usually go wrong?
Lead time and rework at the vendor. Link each vendor order to the work order so late returns and failed finishes are visible on the job.