Manufacturing knowledge base

Operations in manufacturing

This knowledge base covers the operational basics in machine building, metalworking and contract manufacturing: how a price comes about, how to get items and bills of materials in order, how to see afterwards whether an order earned what was estimated, and how to use the ERP you already have. Each page answers one question that owners and CFOs of manufacturers actually ask, with a calculator and an Excel template you can use yourself. Without selling software.

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Seven questions, seven answers

  1. 1Estimating

    When estimating sits with one person: how to capture it

    When estimating sits with one person, you don't write down everything that person knows. You capture the costing rules: how a request turns into an amount of material, a number of hours and a price. You do it in four steps next to the daily work: two interviews based on recent quotes, putting the rules in a register, letting a second person estimate with only those rules, and embedding the rules in your costing layout or ERP. You are done when a second person lands within 10% of the estimator on five quotes in a row.

    Shadow estimate Template
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  2. 2Estimating

    Cost build-up of a quote in machine building

    The cost price of a quote in machine building has four parts: material from the bill of materials including saw and cutting loss, operations (hours per work centre times the hourly rate of that work centre), outsourced work, and mark-ups for overheads and risk. Only then comes the profit mark-up. Calculate an hourly rate per work centre, not one rate for the whole workshop. And note: a 30% profit mark-up on cost is a 23% margin on the selling price.

    Cost build-up calculator Hourly rate per work centre Template
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  3. 3Items

    Setting up part numbering for a machine builder

    Set up part numbering with a short code for the main group and a sequence number, for example HY-0012. Put all other attributes, such as type, size, material and supplier, in separate fields and not in the number. Use a fixed order for the description (what – type – size), give the supplier part number its own field, never reuse a number, and start with the items that move most often. Assigning a number is then a fixed rule: the next free number in the group. You need no AI for that.

    Part number generator Template
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  4. 4Post-calculation

    Why post-calculation doesn't happen, and how to make it happen

    Post-calculation usually doesn't happen because the basics are missing, not because nobody wants it. The estimate has no cost lines to compare against, hours are not booked to the order or operation, material is not issued to the order, and nobody owns it. Fix it in that order: the same cost lines in estimate and actuals, hours per operation on the order, material on the order, and a fixed 30-minute monthly review of the three largest deviations.

    Post-calculation: estimated vs actual Template
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  5. 5ERP

    Getting more out of Ridder iQ: what the package already does

    Many manufacturers mainly use Ridder iQ for quotes, orders and invoices. According to vendor ECI, the package also includes relationship management, bill-of-materials management, purchasing, inventory, work preparation, production planning, time tracking per project, document management and reporting, and there is a separate module to run the shop floor on a tablet. First check what your licence contains and what you use of it. Start with items and bills of materials, then hours on the order, then post-calculation. Only then integrate or buy more.

    ERP utilisation check Template
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  6. 6Acquisition

    Just acquired a company: the first 90 days in operations

    In the first 90 days after acquiring a manufacturing company you change little and learn a lot. Day 1 to 30: watch and learn. Talk to every employee, follow one order from request to invoice and find out who knows what. Day 31 to 60: get the basics right. Appoint an owner per process, capture knowledge that sits with one person and make sure you have figures you can trust. Day 61 to 90: pick one measurable improvement and make a plan for the year. Don't buy big software in this period.

    Knowledge risk check Template
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  7. 7Sale

    Getting your company ready for sale: less dependent on you

    A buyer wants a company that also runs without you. The Dutch Chamber of Commerce (KVK) advises owners who want to sell to transfer tasks and responsibilities and make the company less dependent on themselves. First make visible where the company leans on you: customers, quotes and prices, daily operations, figures and leadership. Then move that step by step to people, processes and systems. Start in time: according to the KVK, improving results can take three to five years.

    Owner dependency scan Template
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Tools you can use right away

How these pages are made

  • Written by Safouan Bolbaroud of Agentfabriek, based on conversations with manufacturers and what we see when we build automations on top of their ERP.
  • Other people's figures have a source. Calculation examples are fictional and marked as such.
  • We are not a partner or reseller of any ERP vendor. Where a package is mentioned, we rely on what the vendor itself publishes.
  • Something wrong, or a topic missing? Email [email protected].

Basics in order, and then?

Once items, bills of materials and hours are right, automation can save a lot of retyping: reading customer purchase orders, matching invoices to orders, flagging deviations. That is what we build, on top of the ERP you already have. Want to talk about where you stand? Call or email. No strings attached.

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