Why Cost Estimation in
Manufacturing Demands
Urgency and Innovation

Trusted by leaders in the industry:

Executive Summary

Manufacturers are running into the same wall again and again: rising costs, slipping timelines, and tools that no longer do the job. While production teams move faster and customer demands grow louder, cost estimation is stuck in the past.

This report is built on a foundation of carefully screened participants and thoroughly vetted data. Every response was subject to rigorous quality checks to ensure both reliability and relevance. The result is a set of insights that support critical business decisions with accuracy, authority, and practical value. The numbers show widespread frustration, low confidence, and growing urgency to modernize. Spreadsheets are still the default. Automation is rare. Many teams are being asked to hit targets without real-time data, integrated tools, or adequate training.

Expectations are rising faster than most manufacturers can keep up. Those that invest in better systems, stronger data, and internal expertise will be positioned to lead. Those that don’t will continue to lose ground.

Findings from the 2025 Manufacturing Estimation Report:

of manufacturers say their initial cost estimates miss the mark

of respondents still rely on Excel for cost estimation.

How Confident Are Teams in Their Estimates

Somewhat confident

Very confident

Integration Levels in
Estimation Systems

say their cost estimation tools are fully integrated

remain siloed

Automation is
Underutilized

say they’ve automated more than 75%.

Nearly half cite economic volatility and limited data access as ongoing challenges.

Galorath’s 2025 Industry Report on Cost, Schedule, and Risk was conducted in partnership with NewtonX, an independent research firm specializing in verified professional insights.

The survey gathered perspectives from 180 senior and mid-level professionals across industries where cost, schedule, and risk estimation are mission critical. Participants were recruited through a custom process and verified through multi-layer identity authentication to ensure subject matter expertise. Each respondent completed the survey via a unique, single-use link with strict quality controls, fraud detection, and response validation protocols. This approach provides a reliable, third-party–verified view of how organizations are approaching project planning in today’s volatile environment.

Manufacturing Estimation Can’t Wait

Manufacturing has always demanded speed, accuracy, and adaptability. But in 2025, those demands are rising faster than most teams can keep up. Material prices fluctuate without warning, supply chains shift mid-cycle, and customers expect transparency in cost and delivery. Despite these conditions, many cost estimation processes rely on spreadsheets, delayed inputs, and informal workarounds, leaving teams vulnerable to change.

The data is clear: 96% of manufacturers still rely on Excel to manage cost estimation. Only 4% have automated more than three-quarters of their process. The result is avoidable errors, manual rework, and slower decisions. Estimation is no longer just a financial exercise, it directly impacts delivery timelines, profit margins, and customer satisfaction. To stay competitive, manufacturers need to modernize.

Five Warning Signs Every Manufacturer Should Watch

These five patterns point to internal friction that slows delivery, weakens planning, and increases project risk.

1. Estimates Miss the Mark

Fifty-two percent of manufacturers say their initial cost estimates are inaccurate. That means almost half of projects begin with flawed assumptions. These inaccuracies are not caused by lack of effort or ability. Instead, they are symptoms of outdated tools and limited access to real-time data.

Inaccurate estimates have cascading effects. When costs rise or timelines shift mid-project, teams scramble to adjust. Budgets must be reapproved, suppliers must be renegotiated, and schedules must be reworked. With better systems and inputs, many of these disruptions could be avoided.

What are the internal and external challenges most affecting your organization’s project and cost estimation?

Inaccurate Initial Estimates

How often do your projects exceed their original timelines?

Frequently

Occasionally

How often do your projects exceed their original budget?

Occasionally

Frequently

Very confident

2. Spreadsheets Still Dominate

Despite better tools being available, 96% of manufacturers still rely on Excel to manage estimation workflows. Spreadsheets are familiar but are not built for speed, collaboration, or integration. Version control problems, inconsistent formatting, and manual data entry all slow teams down.

Only 4% of manufacturers have automated more than 75% of their estimation process. Another 65% have partially automated between one quarter and one half of their workflows. That leaves most teams stuck with semi-manual processes that limit productivity and increase exposure to error.

3. Confidence Is Weak

Only 17% of respondents say they are very confident in the accuracy of their estimates. More than half are only somewhat confident. When teams don’t fully trust the numbers, they hesitate to act. That hesitation slows procurement, delays approvals, and weakens collaboration between departments.

Low confidence is not a people problem. It is a systems problem. Without reliable inputs and validated methods, teams cannot forecast accurately or explain their assumptions. Improving confidence requires better tools, clearer feedback loops, and support from leadership.

4. External Pressures Are Raising the Stakes

Estimation challenges are not just internal. Manufacturers are under pressure from unpredictable supply chains, economic volatility, and shrinking access to quality data.

In the survey, 52% of respondents pointed to supply chain disruptions and inaccurate initial estimates as top challenges. Another 43% cited economic volatility. Poor integration with project management tools was noted by 39%, while 35% highlighted limited access to quality data and inconsistent stakeholder inputs.

5. AI Adoption Is Lagging

Manufacturing shows the lowest current adoption of AI for estimation though pilot activity is increasing. Another 39% say it is somewhat important. That suggests growing curiosity, but slow movement. Most teams see the potential but have not yet acted.

Concerns include transparency, implementation effort, and uncertain returns. But AI already supports common needs like scenario modeling and predictive risk analysis. Teams that start small with clear use cases can reduce effort, improve accuracy, and build momentum for broader change.

What Manufacturers Want from Their Tools

Manufacturers are clear about what would help. Eighty-seven percent want to automate repetitive tasks. Seventy-eight percent want real-time data integration. Seventy-four percent want improved reporting and visualization. Forty-six percent want tools to benchmark against past projects.

These are not just preferences. They are the foundations of modern estimation. Better tools would reduce rework, help teams communicate more effectively, and speed up decision-making across departments. In a fast-moving market, that capability matters.

Action Steps for Manufacturing Leaders

To make measurable progress this quarter:

Audit your estimation workflow

Identify where manual entry, version control problems, or delays are slowing your team. Focus on handoffs between systems and rework loops that repeat each cycle.

Benchmark confidence across teams

Survey teams to understand how much they trust current estimates. Use this insight to prioritize training, improve visibility, or explore better tools.

Automate one high-friction task

Choose a process that consumes significant time and repeat it with automation. For example, use a tool to auto-fill inputs from past projects or run “what-if” scenarios based on commodity pricing.

This report is part of a deeper look at how cost, schedule, and risk planning are evolving. Access the full 2025 Industry Report on Cost, Schedule, and Risk to see where the biggest gaps and opportunities exist.

Access The Report

Why Cost Estimation in Manufacturing Demands Urgency and Innovation