Large companies often require that procurement departments get three quotes for every purchase as a strategy to save money and drive competition with their suppliers. What often goes left unsaid is that procurement is under more time pressure than price pressure. What does that mean to your label converting business? The first quote in greatly increases your chances of winning the business. We have heard buyers from big brands say that they require three quotes to be accepted but they often don’t wait for the other two quotes when making time-sensitive purchases.
The brand needs the quote now. Realistically, procurement departments are influenced by whose quote arrives first. Quoting is a race (from the customer/brand owners’ perspective). The customer’s language is “quote” or RFQ (request for quote) while the label converter's term is “estimate”, which is the critical object in a label converting business.
We all now know that supply chain challenges have put pressure on the entire estimating function in the labels and flexible packaging space. Initially label converters simply couldn’t get roll stock, then when they could get it, the cost fluctuations caused another layer of pain. The customer doesn’t care about supply chain challenges, their demands didn’t adjust due to the label converter’s challenges.
The estimate is arguably the most important object in the overall process of label converting. The estimate encapsulates the manufacturing plan (raw materials, tooling, press, and finishing), the estimated cost, and the sale price(s). This is the critical object in your Print MIS database in determining the outcomes of your production process. When raw material costs are in a constant flux, your estimators are even busier than normal. The lifespan of an estimate has been declining and during the peak of the roll stock challenges, most estimates lifespan moved to zero – meaning they were only good for one order and any reorder needed to be re-estimated even if it was only a week later. When your estimates have a very short lifespan and the industry is a >70% reorder industry, it makes for a logjam in estimating.
So, quoting is a race to the customer and estimating can be a logjam for the printer. These two realities are in conflict. Often the most important aspect of improving your business is to be able to view it from the perspective of your customers. We are so embedded in our own business challenges that we don’t step back and assess the situation from the perspective of the customer often enough – the most important participant in our value chain.
The customer’s perspective about quoting is: faster is better. Quoting is a race. Hence, your quoting process should be optimized for speed.
Step 1: Document Your Current Process
The brand needs the quote now. Realistically, procurement departments are influenced by whose quote arrives first. Quoting is a race (from the customer/brand owners’ perspective). The customer’s language is “quote” or RFQ (request for quote) while the label converter's term is “estimate”, which is the critical object in a label converting business.
Write down your current quoting process. Be precise. Here are some questions to draw out all the fun and crazy steps that might be involved in your current quoting process.
- What are all the ways quote requests land at your estimator(s)?
- How complete is the information provided?
- How much back and forth happens between the estimator and the Sales/CSR to get to the final agreement on the estimating specifications?
- Is there an approval process for estimates?
- How are quotes delivered to your customers?
- How do you deliver revisions to quotes?
- How do you manage/monitor your win/loss on quotes?
- How does your sales team know when quotes will be done?
- How do you track how long quotes take?
- How do you know how busy your Estimating team is?
Step 2: Optimize Your Quoting Process for Speed
The Top 3 Changes You Can Make to Optimize Your Quoting for Speed
Recommendation #1: Streamline the quoting process
Yes, we are suggesting that you ask your salespeople to follow a process. You may encounter complaints, but this change management is necessary. Your Sales Reps are likely craving the structure required to remove friction from the process.
At Label Traxx, we built the Siteline Sales Portal/CRM to facilitate a standardized request for estimate process because we believe estimating is a race and we want your salespeople to win more deals because they turn quotes around faster than their competitors.
A “request for quote” RFQ should not be initiated by an email to the estimator, only to be re-keyed into the Print MIS. A RFQ should result in the start of an estimate that the estimator simply reviews, updates, and finishes. Stop the time-wasting tasks of your estimators cutting and pasting data from emails into Label Traxx – it is demoralizing for your employees and slows everything down.
With the Siteline Sales Portal/CRM, Estimators will…
- only have to monitor a single input channel for quote requests.
- receive the basic information for a quote required consistently.
- be able to collaborate across functional areas (sales, customer service, and management) about a quote via a conversation that is accessible across all functions without sending any internal emails.
- be able to manage their queue of estimates in a way that is visible to all the people waiting on them (sales, customer service, management) so they are no longer distracted by constant status update requests.
Recommendation #2: Be More Strategic with Estimating Quantities
Many label converters estimate the precise quantity that the customer requests. This is a ~70% reorder business segment, the chances you’ll produce this product again (RRNC) or a variation of this product (RRWC) are very high. Why not take a few extra minutes and quote a range of quantities? Ask you salespeople to learn a bit more about the demand for this label moving forward. A little extra thought initially can save you the labor of estimating over and over for the same product.
Here is something things to consider:
- For this product, manufactured according to this recipe (e.g., digital, flexo, etc.), what is the minimum order quantity you’ll produce?
- For this product, manufactured according to this recipe (e.g., digital, flexo, etc.), what is the maximum order quantity you’ll produce?
- What is the most common quantity the customer will order?
- If you get this information, you could easily create the initial estimate for 6 quantities vs. 1 so that future reorders can bypass the estimating process altogether
- Remember estimating costs money and time.
Often, we make all or nothing rules because they are easier to manage. Rules like re-estimating every order has an impact on your entire process. If you could strategically estimate quantities so that future order pricing can be interpolated from the range of quantities, that would drive a lot of efficiency.
Recommendation #3: Give Estimators a Tool for Managing Their Workload
The order in which estimates get processed is important. There are high value customers and orders that warrant preferential treatment. There are a whole host of exception workflows that warrant an estimate being shuttled to the front of the line. This happens all day, every day in label converting businesses. Currently there is no visibility into the estimating function. By visibility we mean visibility by the internal resources who are communicating with the customers (sales, management, customer service). So, an estimator is working away in a prioritized order that nobody else in the organization has access to.
In the Siteline Sales Portal/CRM, we built a process pipeline for your estimators. Your sales team is driving prospects through a sales funnel, your estimators should be able to move estimates through a pipeline that is visible to the various stakeholders who are reliant on their output. This is the proactive way to reduce the interruptions experienced by estimating when the stakeholders are inquiring about the status of their estimate.
Getting quotes out faster is not just about pushing estimators harder. It is a process that requires some strategic thinking about how you process quotes and how you can quote strategically so that you don’t have to re-quote everything. Customers want pricing now. A large part of the success of pure online ordering portals for simple digital labels is their instant pricing. Our continued insistence on a custom estimate for every job is outdated. The customer needs pricing now – not in two hours or two days. We need to evolve our approach to estimating to better match the timing priority of the customer. Re-quoting an order that was printed last month at a similar quantity is a good example of how labor is consumed, and the customer is asked to wait unnecessarily.
