The work that this refers to is for govenment RFQ's. There is a set
delivery time and the lowest bid gets it assuming certain
qualifications. We have been working on expanding their market to
limit gov. contracts but this work offers a certain amount
of "filler" throughput when the shop has excess capacity. Any
throughput is better than none.

The strategy you refer to is one which they have been employing with
a different market (the walk in off the street jobs) and it seems to
be working. This in combination with the idea of keeping the
constraint working - even with lower throughput has meant sales are
up 30% over last year.

The big win here is that they have dropped the "cost plus" costing
method. Traditionally they have calculated the hours required and
the material needed with a mark up. They then refused to bill at
less than a certain hourly rate explaining that they would "lose
money" on the job. After going through the P's and Q's exersize they
realized the importance of maintaining throughput. Now they simply
quote according to what they feel the market price is.
Saves a lot of their engineers estimating time as well.

Bryan

=|JRM: Good news! The fact that many managers refer to estimating as 'costing',
indicates the seriousness of this problem.|=