You diligently worked up the proposal. You were conservative in estimating material and labor, and you won the job. What could possibly go wrong? Twenty weeks later, a profit and loss report, dripping in red ink, lands on your desk, and your boss wants to see you in his office. Where did the profits go?
Profit leaks spring from many sources. Any time material is ordered incorrectly and needs to be returned, unplanned expenses are obviously added. Similarly, mistakes in machining or assemblies that require rework diminish the bottom line. Another glaring leak source is extra time spent on-site during installation and startup, either spent waiting for a customer to allow line access or to modify a system to accommodate overlooked details or needs that should have be addressed in the beginning of the project.