Updated – Tuesday, 4/13/21
Finding material is becoming even more difficult! Many requoting efforts are being held up due to a no-quote from our material suppliers. When we do receive one and generate a requote for you, many customers have begun asking for details supporting the pricing change. As these requests are resulting in missed material opportunities, we want to prevent that, as much as possible, by providing the additional information below on the price change drivers impacting your cost.
When we initiate a requote, we use the cost calculated from our router (the “recipe”) for your part. The router includes:
- the current work instructions (also known as operations) from our ERP system
- time estimates (also known as run rates) for each operation based on actual data
- our cost for raw materials such as metal, components, and packaging
- our cost for outside services such as painting and plating
- hourly costs for labor and manufacturing overhead
Raw material cost is currently the largest driver in price changes, however, it is not the only one. We’ve had some increases to the minimum charge and piece rate for outside services, and we’ve implemented both increases and decreases to our internal run rate*. Overall, these run rate changes do result in slightly better to neutral price adjustments, but individually, some increases result. When we provide a requote, it’s based on the current and best data available in the router.
We do want to help you understand your pricing changes but are often unable to provide information beyond the general statements here applied to the material and operations for your part. However, if you remain uncomfortable with your pricing beyond these explanations, our quality department will review your part’s work instructions and our CFO the applied rates. We want you to have as much confidence in our pricing as we do. And if we find an issue, we want to thank you for the opportunity to fix it.
Thank you for your patience and understanding through this period of higher-than-average volumes and service disruption. You are very important to us and we are thankful for your business.
Your Trusted Partner,
The Winco Stamping Team
*Over the past 6 months we have seen many run rates change. The majority of the run rates have improved resulting in a lower cost to the customer but some have also increased. For example, the blanking run rate has improved 33% based on the addition of new presses, automated features, and innovative tooling. On the flip side the run rate on machining and PEMS have seen decreases – especially those parts with multiple machining or PEMs requirements. This is not due to the loss of efficiency but rather the awareness of the actual time these operations are taking.
P.S. In the spirit of excellence and relationship building, below are our FAQs (and an A). We have received many questions and want to share them with you.
A. Yes, we’re requoting it!
- Due to the volatility in the metals market, we will be evaluating all PO’s and each stocking program build for requote.
- 95% of our latest requotes are resulting in higher pricing. We have seen drops in the remaining 5%.
- If you’re unhappy with your requote, you’re welcome to try again. Just email your account manager and ask for a re-requote. We are more than happy to shop it around upon your request.
Q. When can I expect to receive a new quote?
- We are scheduling requotes 3 weeks prior to the date we would normally be required to order material. When you receive this quote, you will see your scheduled job date and estimated ship date indicated.
- However, we may requote you earlier. We have started to requote future PO’s at the same time as a current quote when they use the same material. If you receive a quote earlier than expected, this just means you have more time to request a new quote at a later date or grab the current one when you’re satisfied with the price.
Q. How do you determine our new quote?
- The initial quote you receive is based on a material quote from the vendor we received the best pricing from last time. It is entered into our quoting system and calculated from the current job instructions.
Q. Do you shop it around?
- Sometimes we do, however, this is more often driven by lack of material availability than price. Because material is getting harder to find, we will likely shoot you a new quote immediately – when we’re lucky enough to find one. The difficulty with price shopping, is by the time we get an additional quote, the first one has likely expired. If it was lower, we now missed that opportunity. Only you know what your urgency and what your flexibility are. The decision to try your luck with a new quote should reside with you and we’re here to support that.
Q. Why is the quote expiration so soon?
- Our metal suppliers are shifting to “while it lasts” pricing. We will hear verbally, “a quote is good for 24 hours”, but with the caveat “unless we run out”. We will state 24 hours on most quotes. However, we too must make this contingent on our vendor’s supply.
- Just because your quote expired, however, doesn’t mean we will not try. Submit your new PO and if we can still get that price – we’re golden. If we cannot, your account manager will let you know and re-submit your order for another quote.
Q. When will my job be scheduled?
- For PO’s in our system, these jobs are in line to begin 4 to 10 weeks out. Once scheduled, we’re estimating the lead time to manufacture will be approximately 20% higher than normal. An estimated ship date will be included with the requote for your planning purposes and new PO submission.
- If you have a Stocking Program with us, there may be slight delays required to requote your parts but these will be scheduled approximately 1 week following approval.
- For new orders, if you wish to hold your place in line, please submit a PO as usual and we will enter it in our system and schedule your quote and job start in the order we receive them. Anticipated start dates for these PO’s are about 11 weeks out.
Q. I’m not receiving acknowledgments, how do I know if you entered my PO?
- Fridays we send out a “2-Week Sales Orders Entered” report. This is your opportunity to receive acknowledgement of your orders entered in our system and officially “in line” to be processed for requote and production. Just send your account manager a request, and you will be added to the list!
Q. What if I need my parts sooner?
- Expediting is becoming more complicated when material availability ebbs and flows and we need to focus our efforts within these waves. Expediting one part has the unfortunate consequence of holding up others and acts like a dam in this environment.
- To be fair to all our customers, expediting is not an option at this time. We are, however, evaluating your requests each Thursday to see what we can do. At present we’ve been able to move up some start dates but have been unable to guarantee an expedited delivery date.
- If you need to make a special request, please let your account manager know. Every Thursday we evaluate requests received by 3PM on Wednesday to see what we can do. We will get back to you on Friday.4