Justin Klinger, Jul 30, 2020 7:15:00 AM
Successful projects of nearly every type require accurate cost estimates. You need to know the needed resources and associated costs to properly execute a project within the designated timeline. It’s no different with toll processing projects. Or is it?
When we covered how to evaluate a supplier of micronization services, experience was one of 10 things to look for. Yet, if you think a company with decades of experience could “ballpark” any project with ease, you’d be wrong.
Surely their expertise will add value and make things run smoother. Yet, to create a workable estimate, you need to account for the specific ins and outs of each micronization project: raw materials, deliverables, team members and tasks, necessary equipment, project management processes, and more (some of which remain unknown until the project begins).
Whew! So, there IS a lot to think about when forecasting the cost of completing a project within a defined scope. Let’s quickly cover all the factors involved in micronization projects and, specifically, why the range of variables makes “ballparking” a price impossible even for the most experienced full-service toll processor.
Material and Equipment
These two seemingly different factors are grouped together for a reason: they don’t just closely work hand-in-hand, they rely on each other.
The only way to get a raw material to the finished product stage is by using the exact right equipment in the exact right way, so they must be considered together when estimating.
Full-service toll processors, and their wide range of equipment sizes, have incredible flexibility; many services can be performed on a variety of materials. That’s one of the reasons you’re working with a toll processor to begin with, right?
The key is having an expert staff that can determine that perfect union of materials and equipment. Oftentimes, that can’t be nailed down until after the project begins.
Processes
Speaking of beginning a project, the right process (or processes, if needed) can also make or break a micronization project. The right toll processing partner serves as your guide; a resource that has processed a wide variety of materials under many conditions.
Yet, even with what they’ve experienced and how many challenges they’ve solved, estimating the unique process needed for your project may be tricky.
For example, more complex projects may mean that future work isn’t well defined. A revised cost estimate may be needed as more up-to-date information becomes available.
Size Distribution. Moisture Content.
Here’s another tandem that belongs together. Although they’re different tasks, the ability to determine the correct size distribution and the proper moisture content are linked, even though the latter is usually seen as requiring a drying method, not micronization.
The ability to nail how coarse or fine a material is, along with its moisture content, may require in-depth evaluation and/or testing. Some additional steps may be needed to process the material (drying first followed by milling, for instance).
Familiarity
“Have we done this before?” “Are we designing and implementing a new process?”
The answers to these two questions can significantly impact an estimate. Having any historical data helps with determining what new projects may require, even if the material is slightly different. And any documented processes with analyzed information can help create better estimates.
Running a trial may be a necessary expense to solve an unfamiliar technical challenge. Will there be a separate estimate for a trial?
Human Resources
Accurate estimates for a project are more difficult to create as the number of people involved increases. That’s no surprise. Plus, as more people work on a project, the possibility of inadequately trained or unprepared staff being involved increases, which can be time and cost liabilities.
Some micronization projects are simple as far as the number of people involved. Accounting for costs to manage them is minimal.
Packaging and Shipping
These two factors are related in that neither directly involves the micronization process itself. Yet, they’re huge when it comes to estimating a project.
An expert toll processor guides a customer to selecting the right customized packaging option for that product. Of course, being able to handle a full range — packaging in bulk to packaging finished goods — is needed. Packaging alone can set a product apart, yet also add to a project’s estimate.
Shipping, both the delivery of incoming raw material as well as the outgoing product, can provide cost savings or uncover disadvantages. An estimate that includes large orders moved via rail, truck, ship, etc. will reflect instant processing advantages and cost-savings.
Of course, larger bulk orders may mean longer lead times, too, which could result in lost sales opportunities. A toll processor’s estimate should account for this along with any on-site storage or warehousing needed.
Ready to Estimate Your Next Micronization Project Now?
It’s one thing to think about everything needed to estimate a micronization project. Actually doing it is another story.
Don’t worry! The right toll processing partner will walk you through whatever you may need. Yet, we hope you can now see that, with so many factors in play, a “ballpark” estimate isn’t reliable, nor does it do you any favors.
Before you entrust a toll processing partner with your specialty processing needs, it’s critical to know how they can help you meet quality assurance and process control requirements, and that they’re certified to meet regulatory requirements for your product. That’s why it’s important to understand the differences between toll manufacturers and contract manufacturers. Download our guide, What Are The Differences Between Toll Manufacturing and Contract Manufacturing? Just click the link below.