Estimating large projects requires an exploded bill of materials in order to get a good understanding of the requirements. The larger the project you have to estimate the more in depth the bill of materials will be. If you are estimating you want to make sure all the bills of materials are entered correctly into the estimate but also you want to enter the bill of materials efficiently. Your estimating system should allow you to enter a proper bill of materials in order to allow creation of the requirements in order to calculate minimums, setups and quantity discounts properly.
If a bill of material list is available as shown below you can merge items together
Part Number Name Quantity
Widget A 16 GAGE CRS 48×120 10
Widget B 16 GAGE CRS 48X120 3
Widget C 14 GAGE CRS 48X36 5
When you are estimating you generally would price each of these components separately and then roll the costs up for a grand total. By creating an exploded bill of material which merges these items together you can actually get a more accurate cost because buying 13 if an item may be less expensive then purchasing 10 and 3. The other advantage is if you are using raw materials like sheet stock, tubing, wood, etc. you may have the opportunity to nest the bill of material together to arrive at a quantity required which was 13 and would now be 9 through nesting. Setup and minimums can also be reduced by aggregating the bills of material together.
You can see how beneficial an exploded bom is for quoting and estimating. Job costing starts at the estimating and quoting area and extends throughout the ERP package. Job cost estimating software can save you a lot of time, money and energy and help you to win new work.
Next we will be talking about an indented or exploded bill of material which includes labor. Most bills of materials do not include a roll up of labor which can be very good for seeing an aggregated view of the labor required to manufacture the job.
MIE Solutions provides software products to make your business process more efficient so please take a look at our product line below. MIE Trak and QuoteIt are two products which provide an efficient way to do job shop cost estimating.