How integrated nesting solutions benefit metals businesses

A metals sales team can use nesting to create competitive but realistic pricing. With a true nesting solution, a sales team member can quote a price with an accurate understanding of material consumption based on the exact sizes of on-hand supply materials.

Without using a nest at the quoting stage of the sales process, teams are left to assign prices based on estimates of material consumption. Many companies take a “faux-nest” approach in which they price material consumption by using an assumption-heavy, in-house spreadsheet tool. Workarounds of this nature likely won’t have the real-time inventory data access that is required to create a truly accurate nest.

If a metals company isn’t using nesting to quote realistic prices for customers but its competitors are, the competitors could be undercutting that company even if they’re charging the same price per pound. That company could also be unintentionally undercutting competitors and winning orders but not making margins on each order due to unrealistically low material consumption estimates. With a nesting solution integrated in the quoting workflow, metals companies can avoid day-to-day pricing mistakes and cut through noise in their data that might be hiding an optimal pricing strategy.

Production planning is often where the greatest benefits of nesting are seen, which is why most metals leaders are familiar with this application of nesting. When a customer accepts a quote and a production order needs to be created, grouping and nesting demand from similar customers against on-hand supply can identify further material savings.

If a planner must manually determine the most efficient use of materials before finalizing a production order, planning takes longer and creates more scrap. As calculations become increasingly complex, planning is done (and often redone) manually using estimates to simplify data. Manual planning of cut patterns is less efficient in many ways: Material use and lead times to delivery increase when an operation cannot use nesting tools in an integrated way.

As the sales team and production planners use nesting solutions to win bids and create orders more efficiently, companies can more easily and accurately track material consumption within the system. With data to prove how much material is needed for a particular product, the purchasing team is equipped with better information to inform order placements in the future.

If a metals company doesn’t have integrated nesting solutions, transaction histories will make it seem like more material is required for future orders than is needed. Purchasing teams, still in defensive mindsets from COVID-19 pandemic supply chain disruptions, treat operational efficiency as a constant in most situations. Inevitably, this approach leads to money spent on excess supply material, locking in lower margins until the next purchasing cycle.

An integrated nesting solution can give employees and sales teams greater insight into available materials or products, which also offers customers more options. For example, if a service center’s system says that it has a 60-foot beam on hand, an experienced salesperson knows this could quickly be cut into three 20-foot beams or two 30-foot beams. Without nesting features, alternative options wouldn’t be reflected in the system’s view of available 20-foot or 30-foot lengths, which would require an experienced resource to accurately interpret system data and coordinate with customers.

Nesting solutions integrated with inventory management functionality can give sales teams a more accurate view of inventory and alternative ways to see available options when a customer is searching for a specific item. This insight is particularly critical for metals companies that want to market their inventories through e-commerce or help clients save money by combining or reconfiguring orders.