A manufacturing project can have accurate cost entries, properly applied rates, and a carefully reconciled report - and even so it may be heading for a serious overrun. Accounting records what has been booked. It cannot, by itself, establish whether the original technical assumptions remain valid or whether the remaining work can be completed within the budget.

The discrepancy often begins before the first cost is posted. A quantity is omitted, a production sequence is assumed to be simpler than it is, or an installation requirement is not fully understood. Later, the accounts may faithfully report every transaction without revealing the full financial consequences of those assumptions.

Therefore, the practical challenge is to connect engineering, estimating and project execution before the price is fixed - and to maintain that connection while the work is being performed. Better accounting is valuable, but it is not a substitute for better technical decisions and forward-looking project control.

A technically correct estimate needs a reliable technical basis

The starting point is a distinction that is easy to overlook. Engineering defines the technical solution and derives the quantities and requirements associated with it. Estimating assigns costs to that technical basis. Purchasing contributes supplier conditions and lead times. Production and assembly specialists evaluate the feasibility of the planned work. Project execution brings experience from delivery, installation, and commissioning.

These responsibilities are related, but they are not interchangeable. An estimator should challenge an assumption that appears inconsistent; however, the estimator cannot independently determine the correct number of components or machining steps for an evolving design. That judgment belongs with the people who understand the design and the manufacturing process.

Problems arise when a quotation travels through the departments as a series of files rather than as a shared decision. A change in the design may reach purchasing but not the cost model. An installation constraint may be known to project execution but absent from the tender assumptions. The individual files can each be internally consistent while the overall quotation is incomplete.

Review assumptions before they become commitments

In my professional work I have learned the value of a structured, cross-functional review of the technical quantity framework. I refer to this as the Mengengerüst-Durchsprache, or MGD: a focused discussion of the quantities and assumptions that determine the estimate.

A meeting of approximately two hours can be a useful operating format when the scope is prepared in advance and the relevant decision-makers participate. The exact duration of such a meeting is not the point. Rather, the value comes from concentrating expertise on the assumptions that matter before they become contractual commitments.

The discussion should follow the structure of the product or project, not than the organizational chart. For each significant assembly, work package, or cost driver, participants ask whether the technical scope is complete, whether the quantities are plausible, whether the proposed manufacturing route is realistic and whether execution requirements have been included.

Five questions worth asking before the price is fixed

A question such as “Have we estimated the installation?” is too broad. Better questions are: What equipment must be moved or lifted? What site access is assumed? Who supplies temporary fixtures? How many installation shifts are planned? Which tasks depend on the customer’s readiness? These questions reveal what the estimate actually assumes.

Second, are the quantities and work content complete? The team should examine not only major purchased parts but also tooling, test runs, set-up time, quality inspections, handling, assembly, packaging and commissioning where relevant. Small omissions across many work packages can become a material commercial issue.

Third, do the production assumptions match the available capability? A cycle time calculated for ideal conditions may not reflect machine availability, material variation, rework risk, or the actual production sequence. The people closest to the operation should test those assumptions.

Fourth, are uncertainties visible? Where the design is immature, the team should record the assumption, its possible consequence and who will resolve it. A range or a clearly stated contingency may be more responsible than a precise-looking figure unsupported by the available information.

Fifth, will the assumptions survive the handover? The project team needs more than the final quoted price. It needs the underlying commitments, exclusions, unresolved risks and the reasoning behind critical quantities. Otherwise, the same questions must be rediscovered after the order is won.

From booked costs to the cost of completion

The benefits of this review should not end when the quotation is submitted. Once an order is received, the technical and commercial baseline should become a reference for project execution. Then, changes in scope, material quantities, production methods, or delivery conditions can be assessed against the assumptions used to establish the price.

This is where estimating, risk management, and project control should operate as a connected process. I describe that broader approach as Intelligent Estimating Management, or IKM. It does not mean that software automatically creates a correct estimate. It means that the organization treats estimating as an ongoing management responsibility rather than an isolated activity before contract award.

A forward-looking cost assessment is especially important. A review of costs already incurred explains the past. A current estimate of the remaining work helps the team decide what can still be changed. If a production plan becomes unrealistic, managers need to know the expected cost to complete and the available corrective options - not merely the variance recorded at month-end.

This requires discipline in updating quantities, documenting changes and identifying who is authorized to make decisions. It also requires a culture in which technical concerns can be raised early, before a problem has become expensive to correct.

A practical starting point for machine builders

The output should be short and usable: an agreed technical baseline, a list of corrected quantities or work assumptions, a register of unresolved issues, named owners, and a record of what must be transferred to project execution. The meeting should result in decisions, not another presentation.

Over time, the organization can learn which assumptions repeatedly create problems. Those lessons can improve estimating templates, design reviews, production planning, and handover procedures. The aim is not to eliminate uncertainty from custom manufacturing. It is to prevent avoidable uncertainty from remaining invisible until the work is underway.

The numbers in a cost report can be correct while the project is not. The way to close that gap is to challenge the technical assumptions before contract award, preserve them through handover, and continually estimate the cost of the work still to be done. The objective is not simply to explain an overrun more precisely after it happens, but to recognize the warning signs early enough to act.