The hidden costs of your quoting process — and the 3 KPIs that change everything

In most mid-sized manufacturing companies, quoting is treated as administrative overhead. Something that just has to get done. Something the experienced colleagues "somehow handle." What hardly anyone realises: this invisible process ties up highly qualified engineers full-time for several weeks every year — and easily costs a typical company more than €50,000 per year.

The problem isn't the effort itself. The problem is that the effort is not visible. No one records it separately. No one can put a number on what quoting really costs. And that is precisely why it never gets optimised.

We see the pattern in almost every consulting project: the managing director has a vague sense that "a lot of time goes into it." But the question of how much exactly — no one can answer it.

Why the real effort stays invisible

As long as the two or three experienced colleagues handle the process routinely, nothing stands out. Enquiries come in, quotes go out, day-to-day business runs. Only when one of them is unavailable — through holiday, illness or retirement — does the bottleneck become visible. Enquiries pile up. Deadlines slip. Orders go to the competitor who answered faster.

There is a second, often overlooked effect: when calculations vary from person to person, the company inevitably also sends out uneconomic quotes. Sometimes priced too low — squeezing margin. Sometimes priced too high — losing orders. Either way the company loses money — and no one notices.

The first step out of this bottleneck is therefore not new software, not a new tool, not expensive consulting. It is transparency.

"We know a lot of time goes into it. But how much exactly? No one can tell us."

Three KPIs that change everything

To make the real cost of your quoting visible, you don't need an extensive data analysis. Three KPIs are enough — and you can capture them essentially through a sample of 20 quotes.

1. Time spent per quote

How many minutes does an employee spend on a quote on average — from enquiry to dispatch? Most managing directors estimate 30 to 45 minutes. In our projects, the reality is frequently 75 minutes and more — especially for small-batch or special orders that aren't standardised.

Do the maths: 500 enquiries per year × 75 minutes = 625 working hours. At a fully-loaded rate of €80/hour, that's €50,000 — for calculation alone. Money that isn't flowing into project work, customer care or sales.

2. Win rate (quote → order)

How many of your quotes actually become orders? Very few mid-sized companies know this number precisely. Yet it is the most direct indicator of quote quality.

If the win rate is low, an honest question is worth asking: are the quotes not accurate enough? Are they sent too late? Or are they not convincing in substance? Without this KPI, any discussion about "better quotes" stays a matter of opinion.

3. Revenue share from the most labour-intensive segment

What share of your annual revenue comes from the quotes that cause the highest effort? Among many of our clients, a remarkable ratio emerges: small-batch and special enquiries account for 80 % of calculation effort but only 14 % of annual revenue.

This is the KPI that triggers the most reactions in management meetings. Because it shows in black and white: the company's top engineers are tying up their most valuable time in an area that plays only a minor commercial role.

The aha moment

Companies that honestly capture these three KPIs once tend to report the same aha moment: this supposedly small admin task is tying up exactly the people the company needs most elsewhere — in project work, in customer care, in innovation.

Only this transparency enables informed decisions. Not "Should we maybe optimise the process at some point?" but: "We now know manual quoting costs us €50,000 a year — and we know where to start the optimisation."

What you can do this week

You don't need software, a consultant or a project to get started. Three simple steps are enough:

1. Time 20 quotes. Have your employees track the time per quote over two weeks — not estimated, but timed.
2. Pull the last 12 months from your ERP. How many quotes went out, how many became orders, what revenue share comes from the most labour-intensive segment?
3. Multiply honestly. Hours × fully-loaded rate. The number that comes out is the first solid figure for a strategic discussion.

You will be surprised by what becomes visible.

Go deeper: the full whitepaper

This article is an excerpt from our whitepaper "Quoting in the Mittelstand: From the 75-minute chaos to the 15-minute standard" (in German). The full whitepaper covers the next steps: how to make your specialists' tacit knowledge visible, how to build a system rather than relying on individuals — and how to make your results measurable. Including a real-world example: how a southern German plastics manufacturer reduced their quoting time from 75 to under 15 minutes.

Download the whitepaper for free

About the author: Oliver Bührer is managing director at SimplifieD Solutions GmbH. With his team he supports mid-sized companies in mechanical engineering, construction and manufacturing in adopting AI and automation solutions — with more than 30 successfully delivered projects.