I am tasked with measuring the effectiveness of our Quoting Department and what I have come up with is monitoring the number of new jobs in the shop as a percentage of all jobs. This however doesn't tell you much and there is a lot of variation. It can be as high as 80% one week to 4% the next. Also, we can quote several times for the same job i.e. 10 pieces, the 100 pieces then 1000 pieces and the P.O. arrives 6 months later and has to be requoted for 500 pieces.

Any ideas on how to measure something meaningful here?

Thanks

Does anyone have any ideas on this? I've never spent much time around sales to know what measureables they have.

I know that a 6 month response time from a customer is something I have tried to avoid by making qootes good for a limited time. As to their submitting a PO for a quantity you didn't quote, I wonder how they came up with a price for the unquoted quantity.

I am tasked with measuring the effectiveness of our Quoting Department and what I have come up with is monitoring the number of new jobs in the shop as a percentage of all jobs. This however doesn't tell you much and there is a lot of variation. It can be as high as 80% one week to 4% the next. Also, we can quote several times for the same job i.e. 10 pieces, the 100 pieces then 1000 pieces and the P.O. arrives 6 months later and has to be requoted for 500 pieces.

Any ideas on how to measure something meaningful here?

Thanks

A subject near and dear to my heart!

Quotes can only be measured as a function of how quickly and accurately you process them! Clearly a customer wants a quote 'now', so turn around time is important and, what you put in there (price etc) needs to be accurate (for your business). You don't really want to handle the same quote for a client more than once, do you, so getting the information right first time (FTC) is critical.

Win rate is also worth taking a look at, but that's a function of how you compare to the competition and some other factors.

Trust me, I do this every day......

related to the accuracy part.... How does the quote compare with final bill, and what was the profitablity of the job? You could have a very high hit rate, and if you lose money with every job, the quoting process can kill your business. Andy, I wasn't sure if that is what you meant by accurate, or if you meant the numbers are adding up right, and you have the correct quote going to the correct customer, or even all of the above.

The problem with response time and accuracy is the complexity of the quote. Some can cover multiple parts and many operations per part and made of hard to find materials while some are one small part with one operation made of CRS.

While I'm sure you know all this I'm trying to come up with something that is useful beyond satisfying the ISO Auditor (busy work). Creativity is what I need and my own abilities are falling short at the moment.

Thanks Again - I appreciate the responses.

The problem with response time and accuracy is the complexity of the quote. Some can cover multiple parts and many operations per part and made of hard to find materials while some are one small part with one operation made of CRS.

While I'm sure you know all this I'm trying to come up with something that is useful beyond satisfying the ISO Auditor (busy work). Creativity is what I need and my own abilities are falling short at the moment.

Thanks Again - I appreciate the responses.

Who asked you to measure the effectiveness of the quotation process? That's the person to talk to. Although there's been some good guidance so far, you need to know what's expected of the function before you can measure it.

The problem with response time and accuracy is the complexity of the quote. Some can cover multiple parts and many operations per part and made of hard to find materials while some are one small part with one operation made of CRS.

While I'm sure you know all this I'm trying to come up with something that is useful beyond satisfying the ISO Auditor (busy work). Creativity is what I need and my own abilities are falling short at the moment.

Thanks Again - I appreciate the responses.

Well, you can look for something 'different' or you can tackle the problem head on and get creative there!

I understand the challenge. Despite what you might imagine, my quotes have the same challenge. We still measure the same things. But, you can divide and conquer by putting them into 'families' of quotes, on complexity which relates to hours on a machine perhaps?

Jim Wynne - Andy N,
Good thoughts I'll get on it ask the Quoters whats expected of them an then divide and conquer and maybe ask management what would wuseful to them to know about the Quoting process.

Jim Wynne - Andy N,
Good thoughts I'll get on it ask the Quoters whats expected of them an then divide and conquer and maybe ask management what would wuseful to them to know about the Quoting process.

Somehow I doubt that the quoters asked you to measure their efforts. You need to talk to management first.

Try Jim's recommendation first. It is a good one. You study and monitor something because there is an issue and you need to improve then control it. No issue and there is no reason for the rest.

If you determine that you do need to study it, I would suggest starting with a transactional MSA study. Take 10 quote packages and 3 quoters. Run the packages past each quoter three times (allowing sufficient time between that the do not remember the specific quote). You can analyze the variation in quote $s like a normal MSA. It would probably be more informative to review the actual StdDev in $s rather than % Tol or % SV.

You could take this further by adding quote complexity as a factor and analyzing it using a standard ANOVA (rather than an MSA ANOVA routine).

This would be the best measure of effectiveness that I can think of. The next would be timeliness. You cannot control hit rate much unless you start cutting margins.

Miner,
I agree, Jim's approach is the most pragmatic.

A subject near and dear to my heart!

Quotes can only be measured as a function of how quickly and accurately you process them! Clearly a customer wants a quote 'now', so turn around time is important and, what you put in there (price etc) needs to be accurate (for your business). You don't really want to handle the same quote for a client more than once, do you, so getting the information right first time (FTC) is critical.

Win rate is also worth taking a look at, but that's a function of how you compare to the competition and some other factors.

Trust me, I do this every day......

It all depends on what your company thinks is important. Of these two, I would think the win rate would usually be more important, but it would vary with the company especially if there are new people in the sales force.

Two more to consider would be On-time Delivery and Customer Satisfaction. Sales must be able to properly forecast lead times and ultimately if the sales force doesn't properly understand customer requirements it doesn't matter how well everyone else does their job, the customer will be unhappy.

It all depends on what your company thinks is important. Of these two, I would think the win rate would usually be more important, but it would vary with the company especially if there are new people in the sales force.

Two more to consider would be On-time Delivery and Customer Satisfaction. Sales must be able to properly forecast lead times and ultimately if the sales force doesn't properly understand customer requirements it doesn't matter how well everyone else does their job, the customer will be unhappy.

Can't agree Jim! Win rate is somewhat affected by the quote, but not entirely! There are other factors at play. Also, I don't forecast lead times. Not my job! I know where to find out what the lead times are, however....

I also have nothing to do with 'on-time delivery'. Not my job! Quoting doesn't always deal with delivery dates.......

Try Jim's recommendation first. It is a good one. You study and monitor something because there is an issue and you need to improve then control it. No issue and there is no reason for the rest.

Thanks, Miner, but I think this might be an instance where the overkill of Six Sigma might be at work. There might not be a problem; it might be that someone drank the Kool-Aid and now believes that everything has to be measured, even if there's no rational way do it. Or perhaps the problem is in the expectations; someone on high wants to know what the quotation people are doing all day, or has heard from an unreasonable customer that his quote took too long. Of course it could also be that the quote people are surfing the interwebs when they should be doing actual work. In any case, it's important to establish the requirements (explicit or otherwise) before doing any measuring, if measuring is even possible.

If you determine that you do need to study it, I would suggest starting with a transactional MSA study. Take 10 quote packages and 3 quoters. Run the packages past each quoter three times (allowing sufficient time between that the do not remember the specific quote). You can analyze the variation in quote $s like a normal MSA. It would probably be more informative to review the actual StdDev in $s rather than % Tol or % SV.

You could take this further by adding quote complexity as a factor and analyzing it using a standard ANOVA (rather than an MSA ANOVA routine).

This would be the best measure of effectiveness that I can think of. The next would be timeliness. You cannot control hit rate much unless you start cutting margins.

I can't see the utility in running the same ten packages past the same people multiple times. It creates an awful lot of work for one thing and doesn't take into account variables such as ringing telephones and urgent e-mail messages and countless other distractions that might contribute to getting work done promptly. I think there must be easier ways to establish competence or effectiveness. Like I said, some things can't be measured, and other things that can be measured shouldn't be.

Thanks, Miner, but I think this might be an instance where the overkill of Six Sigma might be at work. There might not be a problem; it might be that someone drank the Kool-Aid and now believes that everything has to be measured, even if there's no rational way to measure them. Or perhaps the problem is in the expectations; someone on high wants to know what the quotation people are doing all day, or has heard from an unreasonable customer that his quote took too long. Of course it could also be that the quote people are surfing the interwebs when they should be doing actual work. In any case, it's important to establish the requirements (explicit or otherwise) before doing any measuring, if measuring is even possible.

Actually, I thought that this was the result of an ISO 9001 implementation (or auditor) gone wrong. There could be many reasons. Six Sigma is only one among many. A good SS program should only tackle projects with a defined benefit. If the company is trying a blanket approach, they are going about it wrong.

I can't see the utility in running the same ten packages past the same people multiple times. It creates an awful lot of work for one thing and doesn't take into account variables such as ringing telephones and urgent e-mail messages and countless other distractions that might contribute to getting work done promptly. I think there must be easier ways to establish competence or effectiveness. Like I said, some things can't be measured, and other things that can be measured shouldn't be.It may seem pointless, but I have seen it done where it showed that there were very large differences between quoters and even within the same quoter. Once you know that, you can take action to improve it. You may be able to achieve this using other approaches if you can find different quotes that were very similar in the key aspects.

I agree ten quotes run multiple time through the same people would create moral problems and potentially the "paralysis of analysis." What is important to the customer is turn-around time. If they are asked up front how soon they need it you can put a target date for the quote and see how well you hit the date.

However, we know that customers will have a tendency to say the need it yesterday if not sooner but that goes with the territory. If a promise date can be negotiated perhaps that is a preferable way to get at turnaround time.

This doesn't address the companies issues of profitability and win rate but it is a start.

I will use the following attributes to measure effectiveness:
1. Abilities
2. Timeline
3. Use of resource (based on cost, time, etc)

Taking into consideration the following:
- Project background (simplicity or complexity)
- Set objectives (internal)
- Be more precise – complete tasks on time and under budget

Ultimately, I will involve the management in planning activities and my customer in setting target. :2cents:

I agree ten quotes run multiple time through the same people would create moral problems and potentially the "paralysis of analysis." What is important to the customer is turn-around time. If they are asked up front how soon they need it you can put a target date for the quote and see how well you hit the date.

However, we know that customers will have a tendency to say the need it yesterday if not sooner but that goes with the territory. If a promise date can be negotiated perhaps that is a preferable way to get at turnaround time.

This doesn't address the companies issues of profitability and win rate but it is a start.
There is nothing immoral about measuring how consistently someone can repeat a task. If this is immoral, all MSA studies are immoral. It would only become immoral if you took immoral actions based on the results. For that, I refer you to Deming's 8th point: “Drive out fear, so that everyone may work effectively for the company.” However, since you have reservations about it, another approach may work.

Select a number of realized quotes from randomly selected quoters. Compare the actual detailed costs to the estimated detailed costs. This will still provide insight into repeatability and reproducibility as well as into the specific areas where they may have issues. You will also have information on the accuracy of the quoting process.

There is nothing immoral about measuring how consistently someone can repeat a task. If this is immoral, all MSA studies are immoral.

I think (hope) he meant "morale."

Following up on AndyN's earlier comment, ultimately you want to know whether or not you actually quoted the job correctly. In other words, I said I was going to need 4 parts type X, 6 parts type Y etc.

What did I ultimately make on the project, and how accurately did my quote represent the actual finished product? DId I make any money? If not, there's a breakdown SOMEWHERE and it all started with the quote.

Quote process is an interesting one to map. WHere do you get your information for forumlating the quote? How confident are you it is correct?

Can't agree Jim! Win rate is somewhat affected by the quote, but not entirely! There are other factors at play. Also, I don't forecast lead times. Not my job! I know where to find out what the lead times are, however....

I also have nothing to do with 'on-time delivery'. Not my job! Quoting doesn't always deal with delivery dates.......

Andy,

It would vary with the company. These are suggestions to consider. Because it would not work for you doesn't mean that it would not work for anyone.

Those that quote in most companies, at least the ones that I'm familiar with are responsible for reviewing the quote before sending it on to the customer. Element 7.2.2 requires that the review include not only that they gathered and considered all requirements, but that they confirmed that they have the ABILITY TO MEET THE ORDER. To me, that certainly means that they are fully cognizant of of delivery dates, as that is part of confirming they have the ABILITY TO MEET THE ORDER.

And you would not want to know if you had a salesperson that couldn't win the bids? The win rate can be EXTREMELY informative. Maybe you don't care if someone is "burning up the ups" but most sales management certainly is.

So disagree if you want, but don't blow it off for everyone else because you don't think it works for you.

I'll be happy to agree to disagree if you can't keep your mind open.

Excellent discussion on this topic. I don't recall who wrote it, but asking, "What problem are we trying to solve?" pr "What is important to the customer?" is a great place to start when deciding what to measure. True whether you are talking quoting process or any other for that matter. We must also consider what is important to the business. Our quotes could be fast, but if they give away the farm and don't allow for an adequate profit margin, the business will be in trouble. Have a great weekend. :bigwave:

It would vary with the company. These are suggestions to consider. Because it would not work for you doesn't mean that it would not work for anyone.

Those that quote in most companies, at least the ones that I'm familiar with are responsible for reviewing the quote before sending it on to the customer. Element 7.2.2 requires that the review include not only that they gathered and considered all requirements, but that they confirmed that they have the ABILITY TO MEET THE ORDER. To me, that certainly means that they are fully cognizant of of delivery dates, as that is part of confirming they have the ABILITY TO MEET THE ORDER.

And you would not want to know if you had a salesperson that couldn't win the bids? The win rate can be EXTREMELY informative. Maybe you don't care if someone is "burning up the ups" but most sales management certainly is.
I'll be happy to agree to disagree if you can't keep your mind open.

Jim: I'm very open minded actually, didn't blow off anything - you made some broad generalizations that aren't applicable in all cases - I gave a contrary position, to allow people to get different perspectives......not trying to say 'mine's better than yours', just a different situation.......

I'm not sure how much time you spend in 'pure' sales capacity, but I can confidently tell you that 'win's are driven from all sorts of decisions, most of which I have little to no control/influence over! As you know, I'm fully aware of 'what ISO says' so I'm not sure what quoting it here does for the discussion! My marketplace doesn't require that I know about dates, that's all I'm saying.......

Having said that, we do 'monitor' wins, but we don't lose sleep at night, when people are convinced to buy only on lowest price (I can't 'win' that) or because they know a supplier 'in town' (What? Do I move my office there?) to name but two reasons.......

Having said that, we do 'monitor' wins, but we don't lose sleep at night, when people are convinced to buy only on lowest price (I can't 'win' that) or because they know a supplier 'in town' (What? Do I move my office there?) to name but two reasons.......

It looks like we agree more than we disagree. The things I mentioned were for consideration, and their application would vary from company to company.

When brainstorming (and isn't that what a forum like this is about), I believe that there are no bad ideas. Any reasonable idea should be throw onto the table for consideration. For some those seeds will land on furtle soil. For others they will lie on hard-pack and die.

I am not actively in a sales position now, but have spent time there in the past, both as a salesman and in sales management capacities.