Your website and service is named for a concept known as “should-cost” modeling. Could you explain?
“Should-cost” estimating, or analysis, was actually developed by the Air Force back in 1960 when it conducted a study involving one of its biggest suppliers in order to determine ways to save money by increasing efficiencies. One of the approaches it developed became known as “should-cost,” which is basically a way of determining what a product should cost based on the price of raw materials, manufacturing, and production overhead, with a reasonable profit margin included.
Our new company, ShouldCost LLC, is a business alliance with Micro Estimating Systems, which is a world leader in engineering-based costing software in order to provide “EAS,” or engineering as a service. It’s a great relationship because Micro Estimating has the software, and ShouldCost has the engineering expertise to produce accurate cost estimates.
What sets you apart from other companies providing should-cost services, and how does yours work?
We are the only should-cost company that works with 3D solid modeling. The way it works is a client visits our Web site and sets up an account, and then they answer a few questions that will help us work on their estimate, with the first one being “what are you making?” They can then upload a solid model in any one of a dozen file formats, which our team of engineers will analyze along with information such as the material to be used, the complexity of the part, the equipment the client has available to do the machining, and other variables such as the type of cutting path you’ll be using and even chuck configurations. If the client can’t answer those questions yet, our estimate is based on optimal conditions that we clearly define.
Our team of engineers are experts, with many years of experience in manufacturing. Mike Holland, our president and CEO, has been involved since he was a die maker for Chrysler in the early seventies, and both his father and grandfather worked in the manufacturing industry as well. Same thing with Bernard Woods, the CEO of Micro Estimating, who grew up working in a machine shop, and Jim Lurtsma, who oversees our team of engineers, is our 3D modeling expert. We call him our tech guru, because he really is the master when it comes to solid modeling design.
And it’s my job to be the point person for our customers, making sure their needs are being met. And the people who make use of our service can be everyone from purchasing agents who need a benchmark to check vendor’s pricing against, to companies who would rather work with us on an as-needed basis than invest a lot of money in software that isn’t quite as versatile and isn’t used often enough to justify the expense.
This is also a great service for smaller or younger companies who simply can’t afford to make a mistake in their quotes, because sometimes even a small cost increase over what they’d predicted can create huge financial problems, or even put them out of business. So ShouldCost is about accuracy and convenience, in many ways.
What does this cost, and how long does it usually take?
It always has to do with the complexity of the part, but our goal is to be able to provide cost estimates in about 48 hours, and it’s the same thing with the market-driven pricing. While we realize this is a valuable service that saves customers a lot of money, we also want to be reasonable in terms of what we charge, especially when you compare it to a software package that doesn’t do as much and can literally cost thousands of dollars. One reason ShouldCost was launched is because so many Micro Estimating customers were asking for this service, so we know there’s a need out there—especially with profit margins being so tight and everyone concerned about increasing their operational efficiency. This is one way they can harness our expertise while they turn their attention to other things, like shipping products to their own customers.