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At SMTAI recently, I met with Chintan Sutaria of CalcuQuote, a young company serving EMS companies through the development of a fresh spin on quotation software. Chintan walked me through the creation of CalcuQuote, from what inspired him, to this novel software’s current status and offerings.
Judy Warner: Chintan, you have a long history in EMS. Why don't you tell us a little bit about your background in the industry, how you began CalcuQuote, and what you're doing now.
Chintan Sutaria: My background in the EMS industry began at 11 years old, helping my dad with his business. I was fortunate to wear many different hats, gaining exposure to most roles, both big and small, at an EMS company. I went into consulting for a while, and then after a couple years, rejoined the family business full time. After my father’s retirement, I realized that quoting was something that I really hated doing, and because it was so painful, I decided to do something about it. That’s how CalcuQuote got started. We have since evolved that idea into a comprehensive RFQ management system. CalcuQuote’s end-to-end process supports capturing customers' requirements to coming up with labor and material costs, allocating overhead, markups, and following up with the customer.
Warner: That's for sure, and I know from being in the EMS business, that's one of the most painful and tedious parts of the job, managing a huge BOM and all those parts, and it always takes a long time to get a quote. Everybody's in a hurry, but it seems like it's still a five- to seven-day turn on a good day to turn a quote, right?
Sutaria: Yeah, that's standard. It's been the standard for a long time. Everyone wants things faster these days, and customers aren’t willing to wait five days to get a quote any more. That's what we are trying to solve.
Warner: How long have you been in business now?
Sutaria: Almost two years, we announced our product at the SMTAI show last year, and now we're in our second year. The product and company have come a long way since the beginning.
Warner: Do you license the product? What is the cost structure?
Sutaria: CalcuQuote is a software as a subscription model. All of our customers end up with their own instance of the application, and they pay a monthly subscription fee for using the product. Our customers don’t need to set up any servers or install anything on their computer.
Warner: So it's cloud based. Tell us how you address security issues related to ITAR.
Sutaria: We have many different protocols to securely limit access to data. We use Amazon’s GovCloud infrastructure to ensure regulated data is safe. The data is encrypted. Backups are also taken onto ITAR compliant servers. We include layers of security to easily block malicious attempts to access information.
We understand that security is very important to our customers, and we do our best to protect them.
Warner: Give us a little deeper insight to how the software works and the value it adds for your customers.
Sutaria: Every part of the application has been designed with two principles in mind: We want to speed up the RFQ process and we want to apply guardrails to increase precision. When a salesperson initiates an RFQ, we say, “Okay, let's ask all the relevant questions up front so that we can actually prepare an accurate quote.” From there, there's a workflow built into CalcuQuote that gets triggered so the appropriate people, depending on what kind of quote it is, will get a notification to go on to next steps.
Once you load a bill of material, we do an instant supplier query to bring back datasheets, part descriptions, images, lifecycle and mounting information, so you can actually get a lot of information about that BOM right away. If you have an incorrect part number, you could figure that out quickly rather than having to wait until you're sending the quote back to the customer five days later.
On the materials side, we have integrated with some of the biggest suppliers in the industry to make sure we get accurate, real-time information about what they have available in stock and at what price. For labor, we have a model where we prompt the user with questions as they're creating routing for that board. For example, if SMT setup is involved, our software can already read how many SMT line items there are on the bill of material, but it also asks leading questions where necessary. For example, if touch-up or QC are involved, then it will prompt “Based on the assembly drawing how much time do you estimate per board?”
Once we complete materials and labor, we have an overhead module to allocate additional costs and a summary view to mark up the quote. CalcuQuote prepares a finished, professional quote that can immediately be sent to the customer. We also provide functionality to communicate additional reports to your customer. For example, a materials exception report can be included to outline all the things that are out of the ordinary on that quote: customer-supplied parts, do-not-install parts, materials that are at risk, parts that are not being bid, and alternate parts that were approved or rejected. Not every customer focuses solely on price; providing additional information can help the customer make a good decision about their next partner.
Warner: And that part of the process would take into consideration parts that are obsolete and plug in substitutions that have been made, if allowed, and so forth?
Sutaria: Exactly. You can identify the materials at risk as you're going through material costing, and one of the risks would be end-of-life/obsolete. There's even an approval workflow on alternate parts, so the EMS buyer can go in and say, “We can't find this part; let me suggest an alternate part.” The customer can actually go into a portal and approve that alternate or reject it depending on what they think it should be.
Warner: Within your software, I imagine that if an EMS has set up a certain cost structure with a distributor or a supplier that they could key that in. Do I understand that right?
Sutaria: Yes. For example, if you have preferred pricing with a particular supplier, one of the things that's unique about us is we're not a generic search engine for parts. We actually configure this for each particular company, so they'll get their own unique API key that provides their own pricing and availability of parts. If you have a bonded inventory program where you get discounted pricing with a particular supplier, you can see that appearing inside the software. So again, it goes back to accuracy and it goes back to how fast you're going to get that information.
Warner: Every EMS seems a little bit different, even though many activities are in common. Is there some sort of customizable features within your software?
Sutaria: There's a lot of things about the way that we've architected the software that makes it configurable to individual EMS companies. It's not like we have to have one-size-fits-all, because there is no such thing in RFQ world. Everybody does it differently.
Warner: I was trying to say that gingerly! (laughs).
Sutaria: It's something that we recognize, and accommodate very well. For example, if you have custom metrics that you need to track, like revenue by salesperson or win ratio, we can build those types of reports for you. We can also do integrations with ERP systems. We have customers that, as part of the quoting process, want to know whether they have the parts sitting in stock on their shelf. CalcuQuote allows them to view this information alongside other sourcing options, so they don't have to wait to order the parts when they can build it right away.