Feasibility review prior to quoting - Requirements Review - 7.2.2 Feasibility Help

T

tim banic

#1
Hello All

I have a question...we are deep in debate (sometimes very loudly) over the need for feasibility review prior to quoting.

I am saying that we need to look at all quotes to determine if we have the capability and will not run into problems.

Sales Manager is saying we should quote, then do the feasibility closer to landing the job.

My response "Once we have quoted we have committed & it is too late to change things after the customer has decided that our quote was the one. All we will do is **** off the customer by changing everything down the road closer to landing the job, or when the P/O arrives. Ultimately messing up future business, with them & the rest of the other potential customers...because you know sure as God made little green apples at the next trade show they will say " Boy this company said they could do it & when I gave them the P/O they changed everything".

He came back to me and said 90% of the quotes do not have a defined date for the project to land, so we are looking at "Pie in The Sky information anyways".

I tell him at least everyone has looked at it & said yes my dept. can handle this job when it arrives.

Then the discussion starts all over again...kinda like two dogs chasing their tails. This can go on for hours at intense levels of discussion (not fighting but discussion).

We are looking at a mini Feasibility review, handled by the major departments (production, Engineering, SCheduling, Shipping) as a solution.

Any help, discussion, samples of your own adventures & solutions would help me.

thank you folks, if you would like to email me [email protected].

Thanks
Tim Banic
Quality
 
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H

HFowler

#2
Tim,

Since all quotes don't produce orders, I can understand your Sales Manager not wanting to add cost to the process unnecessarily. It sounds like you've already worked out a solution with the mini-feasiblity review following up with a more in-depth review closer to landing the order. It might be wise to take a supportive position in this situation. :)

Best Regards,
Hank Fowler
 
A

Al Dyer

#3
Let's talk the real world,

How many quotes do you produce daily, weekly, or monthly?

How long does it take to do a feasibility study? Maybe 1/2 hour?

I've never seen a company that quotes new product daily. If they are that large they can afford to do feasibility.

In my humble opinion feasibility has to be part of quoting and contract review.

Go to a Production Manager and tell him/her that there is a new product that starts next week and will need a new machine and personnel.
 

SteelMaiden

Super Moderator
Super Moderator
#4
I also think you need to do some sort of feasibility. It may not be real sophisticated, but if you (sales) sells it and production can't make it, somebody is going to be really hot. And the first one you'll PO is the customer...that's not the guy you want mad in today's economy. And, you know as well as I do that if sales promises somebody something and it can't be done, you will end up getting blamed for it somehow. The motto of a "Quality Person" whatever your title may be is: I am a responsible person. Every time something goes wrong, I'm responsible.;)
 

Marc

Hunkered Down for the Duration
Staff member
Admin
#5
I think Al started what I would say. Look at your business. Let's say you make machines that staple boxes. A sales person starts a sale. That sales person should already have some idea what plant capacity is, pending orders and be ready - in his/her own head to know whether the terms and conditions within the request for quote are doable. If not, there is a serious communications problem. That said, the first actual review is one which will be mental. As an extreme example, if an RFQ came in for 1,000 machines in 2 months the sales person should have some idea whether they're capable of that. The company may only currently make 500 machines a year. (let me see here.... 1000 in 2 months and we never made mor than 500 in a whiole year before. I wonder if we could just....) So - some of it is gonna be basic.

Some companies have a form a sales person completes and returns to 'the home office' for a review by a manager (or other appointed person) to 'take a looksie' at the preliminary info prior to replying to the customer. This is more ormal - many smaller companies may not need such a review.

Feasibility studies have been pushed because many compnies (particularly in the high volume manufacturing industries) have had a tendancy to bid based on hopes and prayers (poor internal communication or management stupidity and greed {we'll think about whether we can do it after we get the contract}).

This is an oldie but goodie from my early 'training in quality' days. Those of you old enough to remember when the first little portable AM radios that you could put in your shirt pocket and ran on 9V cells came out (what - the late 1950s?), may remember they were a hit. And they were cheap - what - 10 to 20 bucks or something? As I remember, Zenith introduced them in the US. But - Sony Japan was making them for Zenith. The demand was so great that Zenith came back to Sony and said we want 5X of the quantity we purchased last year. Sony came back with a bid which was almost twice what they charged previously. Zenith accused Sony of trying to screw them. Sony justified their costs to Zenith and Zenith went with it. Why?

Sony did a feasibility study. Sony found that to produce the volume Zenith wanted Sony would have to build a new plant, etc., etc. So - the cost factor was based upon what contract Zenith would agree to - part of which became length and a guaranteed minimum buy over X years.

The more complex the item, and the higher the mix of products and processes, the more important feasibility studies become. This is not to mention - especially in 'high tech' - does the technology exist to even make what this design calls out for?

The bottom line is look at your company and ask yourself where feasibility really becomes critical. Does your sales force REALLY know enough to be able to discuss an RFQ? Is your company a BIG company where - for example - one machine is used on several products and scheduling is an issue? Does anyone now have access to information (this is more high volume) which lays out % of current and planned utilization of each of the necessary machines?

What if you're a 10 person machine shop and get an RFQ? In these cases feasibility is usually done by one person in their head - the owner. In such small a shop, the owner typically knows what s/he can and can't do and has some idea of current and predicted machine utilization.

I was in one extreme case where, while at Cincinnati Electronics, we were bidding on a contract. We didn't call it a feasibility review, but every department got a copy of the RFQ and had to submit a formal report, by a certain date, with all the shit - manpower projections, new equiment projections, current equipment utilization with respect to other planned (or potential) projects - you name it. My part was to give projections of costs for certain environmental testing stated in the requirement including writing the environmental design criteria test plan (EDCTP for those in the govt) with considration to the mission profile. We also wrote the Product Quality Assurance Program Plan - the QAPP - (which some may mentally link here to the discussion in the thread on Quality Manuals and rquirements for 'Quality Plans) which was program (read produt) specific. When I talk 'environmental' testing here, I'm talking vibration, shock, altitude, explosive atmosphere, Mil-S-901 Shock, thermal cycling, etc., etc. Will it survive it's 'mission', not whether the product would pollute something (like the earth). As far as it went for the company as a whole, the project of even doing this was a project costing in the millions. But it had to be done for submission to the government as evidence that we had considered every potential factor and could fulfill the contract and that we knoew what it would cost (please - no discussions here on how everyone lowballed whenever possible...). Of course, there were several companies involved in the competition. CE lost that contract, but I can't remember who to. Now THAT was a feasibility study and then some... And cost several million bucks.

As a last comment and aspect. Let's say you make rubber bands (rubber or whatever compound) and someone comes to you and submits an RFQ for thumb tacks (metal) which you currently do not make (you only make rubber bands). What will you do? At what point will you do a 'feasibility study'? Will it be mental or documented?

Use common sense when defining one or more formal 'feasibility' study points. Most are done in peoples heads first. And from then on - in larger companies, every design reiew has (should have) a feasibility review.

For me - nothing really officially starts until the formal RFQ arrives.
 
T

tim banic

#6
Thanks

Thank you all for your comments & ideas...I will be thinking deeply on this topic.

thans again for all your help.

tim
 
N
#7
Efficient Feasibility Reviews

The intent of ISO9001 and QS9000 is clearly that feasibility reviews must be conducted prior to formal quote. But if you have a lot of customers fishing for prices and preliminary look sees then I have some ideas to make the process more efficient. One is to issue a preliminary ballpark quotes that are subject to full feasibilty review or successful mill trials. The second idea is too sit down with a cross functional team and document a capability study that clearly defines a window of specifications and volumes that are pre-approved with maybe a check on current volume capacity required. This gives the Sales personnel freedom to quote "standard items" immediately and efficiently. Any request for quote that falls outside of this window requires a full cross functional team feasibility review and timely sign-off. We have used such a system that uses three feasibilty streams :i) standard quickie, ii) team feasibilty for non-standard and finally iii) full APQP feasibilty review for major new automotive quotes or high risk ventures. This worked fine with the auditors and it leaves the Sales staff able to quote 90%+ of the requests within 1/2 hour. Kind of like a pre-approved mortgage.
 
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