# Quote vs Actual: Why Aerospace Machine Shop Jobs Lose Money > Source: https://netray.co/resources/aerospace-machine-shop-quote-vs-actual-job-profitability > Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems. > Section: Knowledge Base ## Short answer How aerospace machine shops compare quoted and actual cost by job, find the leaks (setup, rework, FAI, outside processing) and feed them back to quoting. ## Category erp-general ## Content **Intro:** To find why aerospace jobs lose money, compare quoted and actual cost for each completed job by element: material, setup, run time, outside processing, inspection and FAI, rework and freight. Most shops discover that a handful of causes repeat: setup underestimated on small lots, rework and scrap on hard alloys, outside processing minimums, and unpaid documentation time. This guide explains the report you need, the data discipline it demands, and how to use the results in your next quote. **Sections:** #### The Report: Variance by Cost Element **Body:** A useful job profitability report has quoted and actual values side by side for each element, by job, part number, customer and part family. Total variance tells you little; element variance tells you what to fix. For example, a job that quoted 3 hours setup and took 7 is an estimating or program-proofing issue, while a job with correct hours but extra scrap points to process capability or material. Roll results up by customer, material and process mix, and by estimator, to see patterns without blame. Shops on Global Shop, JobBOSS, E2, Epicor and SyteLine can all produce this if estimates are stored by element and labor is collected by operation. Spreadsheet shops can start with the top 20 jobs of the last quarter. #### The Usual Leaks in Aerospace Work **Body:** Review these first when margins disappoint. **Bullets:** - Setup and proving time on lots under 25 pieces, often double the quote on first runs - Scrap, rework and nonconformance on titanium, Inconel and thin-walled parts - FAI and CMM programming charged to the job but never quoted - Outside processing minimum charges, expedites, and reprocessing after rejects - Engineering changes and revisions mid-job with no change order or price adjustment - Material price changes between quote and purchase, and cut waste above the estimate - Documentation, portal uploads and source inspection waiting time #### Data Discipline: What Makes the Numbers Trustworthy **Body:** Variance analysis fails when floor data is poor. Require operators to log time against the actual operation, including setup separate from run, and have rework recorded as a distinct operation or reason code rather than hidden in the original op. Allocate inspection and FAI time to the job. Capture purchase cost of material and outside processing actuals against the job. Without these, the report shows noise and people argue about it. Start with the five largest customers or the top 50 jobs by revenue rather than everything, and show the shop floor how the data is used so logging improves. #### Turning Findings Into Quoting Rules **Body:** Convert the findings into changes: adjust setup standards by machine and part family, add scrap factors by alloy and feature type, raise minimum lot charges or add an NRE line for FAI and programming, and set a policy for change orders so a revision triggers a re-quote. Review again each quarter. Also look at the customers and part types where margin is consistently poor and decide whether to reprice, qualify better or decline them. Pricing power is rarely uniform and the data lets you choose where to push. #### Asking the ERP Instead of Building Reports **Body:** Much of this work is data pulling. A private natural-language layer over ERP tables lets an owner or controller ask which jobs for this customer ran below quoted margin, or what the average setup overrun was on titanium last year, and see the query used. It is read-only, respects ERP roles and does not alter records. It will not fix bad labor data, and if your shop completes a few jobs a month, a spreadsheet review is enough. **Cta:** Ask Netray how a private, read-only question layer over your ERP can show quote versus actual by element without building new reports. **Faq:** #### How do I know if my machine shop is making money on each job? **Answer:** Compare actual cost to price per completed job, including material, labor by operation, outside processing and rework, using a true shop rate. If labor is not collected by operation, start there. Then review margin by customer and part family, not only the shop total. #### What is a good gross margin for an aerospace machine shop? **Answer:** It varies by shop size, mix and capital intensity, so compare against your own history and cost of capital rather than a single benchmark. What matters is whether margin is stable across jobs and whether you understand where it is lost. #### How often should I review quote vs actual? **Answer:** Monthly for jobs completed, with a deeper quarterly review by part family and customer. Large or risky jobs deserve a post-mortem when they close, while the data is fresh. #### Should rework be included in job cost? **Answer:** Yes, record it against the job with a reason code, because hiding rework inflates apparent margin and prevents corrective action. Where a customer pays for a change, treat that as a separate order or change line. ## Related Slugs - gross-margin-analysis-manufacturing - syteline-costing-variance-investigation - syteline-job-costing-configuration-guide - manufacturing-costing-methods-comparison ## Search terms job profitability machine shop, quote vs actual cost analysis job shop, why machine shop jobs lose money, estimating accuracy machine shop, aerospace job costing variance, setup time overrun small lots --- Talk to an engineer: https://netray.co/contact?intent=erp_ai | Machine catalog: https://netray.co/agent/catalog.json