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TAAG Advisory · AM Diagnostic
Your business wants production contracts. Is it built for them?
Most AM businesses run on a commercial model designed for prototyping — then wonder why production customers don't stay, margins compress, and growth stalls. This diagnostic tests six structural gaps between where you are and where production volume requires you to be.
6 questions Under 3 minutes No login required Result before email
How would you describe the majority of your current revenue?
Think about your top 10 customers and how those relationships actually work, not how you'd like them to work.
A
Contracted, recurring revenue with long-term agreements, nominated capacity, agreed pricing frameworks, and forward volume visibility.
B
Strong repeat customers who come back regularly, but each contract starts with a new quote.
C
A mix of some reliable repeat orders, a lot of one-off project and prototype work, and regular new enquiries from customers we've not seen before.
D
Primarily transactional where customers send enquiries, we quote, and we sometimes win. We don't know what next month looks like until the enquiries arrive.
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When you quote a job, what does your hourly machine rate actually include?
A production customer will eventually ask you to justify your pricing from base models. What can you show them?
A
A fully-loaded, bottom-up rate with machine depreciation, energy, gas, maintenance provision, overhead allocation per cost centre, and a defined target margin. Built from our actual numbers.
B
A rate we've built ourselves, but we know it's incomplete where some cost drivers aren't captured properly and post-processing is probably absorbed rather than costed separately.
C
We use industry benchmarks and competitor pricing as our reference. We add a margin on top and adjust based on how competitive we want to be.
D
Honestly, it's experience and gut feel. We've been doing this long enough to know roughly what to charge, but we couldn't defend the number from base models.
When you respond to a production RFQ, who builds the cost estimate?
Production contracts are won or lost on cost engineering, not sales instinct. Who in your business owns that number?
A
Manufacturing engineers are directly involved in building every production quote, they validate build parameters, post-processing time, yield assumptions, and scrap risk before a price goes out.
B
We involve engineering for complex jobs, but most quotes are built by sales or management using an established template. Engineering reviews it if there's risk.
C
Sales own the quote. Engineering are informed once the order is won, and they flag if something is undeliverable. Cost is rarely revisited at that point.
D
One or two senior people build all quotes from experience. There's no formal process and engineering isn't systematically part of the commercial conversation.
If a customer or investor asked to see how your business performs today, what could you show them?
Production customers and investors both conduct assessments. The question is whether your business is legible to an outsider.
A
A live dashboard of operational KPIs, auditable quality records, QMS aligned processes, and a clear P&L by customer segment, ready to share without preparation.
B
Financials are solid, but operational documentation and process consistency have gaps that would take time to present cleanly.
C
We could pull data together but it would take time and the picture wouldn't be clean. We know where the gaps are.
D
We're not ready for that conversation. The business runs well but it's not documented in a way an outsider could interrogate without our help.
If your largest customer doubled their volume tomorrow, what would break first?
Production customers want to grow with you. Before they commit, they assess whether your operations can absorb volume without quality or margin degradation.
A
We've modelled our capacity constraints and know exactly where the bottlenecks are in people, machine utilisation, post-processing, inspection. We have a clear investment plan to remove them in sequence.
B
We have a general sense of our constraints but haven't formally mapped them. We'd probably cope, but it would put pressure on quality and delivery in ways we haven't fully quantified.
C
Post-processing and inspection would be the problem as we rely on subcontractors for much of this and volume peaks create cost and lead time uncertainty we can't control.
D
Honestly, we'd figure it out. We've always found a way. But we don't have a structured capacity model and we'd be making decisions on the fly.
As your production volumes increase, what happens to your margin per part?
This is the question most AM businesses answer wrong, because they haven't done the cost engineering to actually know the answer.
A
We know our cost-down curve, how margin per part evolves as volume increases, where fixed cost absorption improves, and what NRC recovery looks like across the programme life.
B
We assume margin improves with volume because fixed costs spread across more parts. We haven't modelled this precisely but the logic feels right.
C
We're not sure, but we've noticed that larger contracts sometimes feel less profitable than smaller ones, but we haven't traced why. It might be post-processing or how we quoted the NRC.
D
We don't track margin by contract or volume level. We know overall gross margin but we can't tell you whether production jobs are more or less profitable than prototype work.
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