An OEM RFQ Lands: Can Your Shop Actually Take the Volume?
Before you quote an OEM or Tier-1 RFQ, run the capacity check the buyer will run on you later. Start with net available hours, not shift hours. Use the rate your machines really hold, not the cycle-time rate. And subtract everything already promised to other customers on the same machines. On paper, most shops look like they can take the volume. Measured, many can't, and it is much cheaper to find that out before the quote than at run-at-rate.
By the Mama Editorial Team. For the owner of a mid-size auto-component shop in Manesar, Chakan, Hosur or Sriperumbudur with a volume enquiry and a few days to answer. We take the logic OEMs use to verify supplier capacity and work it in rupees on two machines.
Key takeaways
- The buyer will check your number. IATF 16949 requires a feasibility analysis that covers the customer's capacity requirements, and OEM PPAP processes typically end with a run at the quoted rate.
- Use the OEM's formula, not your gut. Net hours = scheduled hours − breaks − planned maintenance − changeovers − hours already sold. Multiply by the real good-parts rate.
- Overtime is not capacity. Ford's capacity-verification form says overtime should not be counted in planning. Under the OSH Code, overtime is paid at twice the wage rate and is capped by state rules.
- In our worked example, "139% headroom" turns into 54%. The machines didn't change. The hours were already spoken for.
- Find the real constraint before you quote. Common ones are a shared VMC, an outsourced heat-treat slot, the CMM queue or your casting supplier, not the machine named in the RFQ.
Why this check matters more now
The volume is real. ACMA's FY2025-26 performance review, as reported by Autocar Pro (the full release was not on ACMA's site at the time of writing), put the Indian auto-component industry at ₹7.60 lakh crore, up 12.7%, with supplies to OEMs up 16.3%. More Tier-2 and Tier-3 shops will see RFQs bigger than anything they have run.
The trap is that quoting is easy and proving capacity is hard. Under IATF 16949 clause 8.2.3.1.3, "Organization manufacturing feasibility", a certified supplier has to judge whether its processes can consistently meet the customer's engineering and capacity requirements, and confirm it can produce at the required rate through production runs or other suitable methods. Your customer's PPAP will then test the promise. The clearest public example is an old one: Ford's US-origin Phased PPAP manual (Edition 1, October 2002). There the final phase is literally called "Capacity Verification". The supplier has to show that its facilities, tooling, machinery, supply chain and people "can support the required Ford volumes (including other business commitments)". It does that by producing at least one day of the customer's daily production volume at production speeds.
Current Ford forms and your Indian OEM's run-at-rate rules will differ in detail, but the logic doesn't. Run the test on yourself first.
The OEM's capacity formula, in plain words
The Ford capacity worksheet (form PP-S-F041 in that 2002 manual) is short, and an Indian owner can fill in every line:
| Line | What it means on your floor |
|---|---|
| A, customer volume per week | From the RFQ. Ask for the capacity-planning volume, not just the average |
| D, scheduled production hours | Shifts × hours × days you actually run, without overtime |
| F, cycle time per part | From the process plan, on the bottleneck operation |
| H, scrap rate | Your real rejection rate on similar parts |
| J, planned downtime | Preventive maintenance, planned stops |
| K, changeover time | Number of changeovers × average changeover hours |
| N, breaks | Lunch and tea breaks per week |
| P, available hours = D − J − K − N | What's left to make parts |
| Q, planned parts = P × (60 ÷ F) × (1 − H) | What you can ship |
| R, potential capacity = Q ÷ A × 100 | Below 100% means "not ready" |
Two more lines matter most. The Shared Capacity Analysis asks you to add up the hours all customers' parts need on the same equipment and say whether capacity or time is "oversold". The readiness questionnaire asks whether you have "cascaded Capacity Verification methods to your sub-tier suppliers": has your forging, casting or plating vendor checked their capacity too?
One line on the verification sheet says it all: "Overtime hours should not be included in the capacity verification planning." The buyer expects you to make the volume inside the normal pattern, with overtime left as your safety margin.
Where Indian shops usually fool themselves
Cycle time treated as rate. A 2.4-minute cycle does not mean 25 good parts every hour. Loading, gauging, tool changes, micro-stops and waiting for blanks all come out of that hour. The verification run measures OEE from real production, and that is where a gut-feel rate gets caught out.
"40% free" that isn't free. Owners tend to judge load by what the schedule board says. The existing jobs on those machines also run below their ideal rate and need setups, so they use more hours than the board shows. This is the same gap that inflates your machine hour rate and the reason spindle utilisation is usually lower than people think.
Wrong bottleneck. You look at the machine that cuts the part, but the volume may stall at the washer, the heat-treat vendor's furnace slot, the single CMM or the one crane on the bay.
Overtime as a plan. Under the OSH Code, 2020, which has been in force since 21 November 2025, section 25 limits a worker to eight hours of work a day. Section 27 says overtime is paid at twice the wage rate, can only be worked with the worker's consent, and is limited by what the state prescribes. Overtime can cover a peak month, not an annual contract.
Worked ₹ example: two VMCs, one RFQ
A Tier-2 machine shop near Manesar gets an RFQ from a Tier-1 for a machined bracket at 6,000 parts a month. The bottleneck operation runs on two VMCs that already do work for other customers. Every figure below is an assumption for illustration. Replace each one with your own.
Assumed inputs: two shifts of 8 hours, 26 days a month, so 416 scheduled hours per machine and 832 for both. Cycle time is 2.4 minutes, so the ideal rate is 25 parts/hour. Breaks are 30 minutes a shift. Planned maintenance is 2 hours per machine per week. The new part needs 3 changeovers per machine per week at 1.5 hours each. Scrap is 2%.
The paper check. The schedule board says the VMCs are about 60% loaded, so: 832 h × 40% free = 332.8 h × 25 parts/h = 8,320 parts. Against 6,000 that is 139%, and the answer is "yes, quote".
The OEM-style check, with measured inputs:
| Line | Hours / rate | Basis |
|---|---|---|
| Scheduled hours (D) | 832 h | 2 machines × 416 h |
| − Breaks (N) | −52 h | 0.5 h × 2 shifts × 26 days × 2 machines |
| − Planned maintenance (J) | −17 h | 2 h × 2 machines × 4.33 weeks |
| − Hours already committed to existing customers | −560 h | Assume two weeks of measurement show ~67% of scheduled time going to existing jobs, including their setups and waits |
| − Changeovers for the new part (K) | −39 h | 3 × 1.5 h × 2 machines × 4.33 weeks |
| = Net available (P) | 164 h | |
| Real good-parts rate | 19.6 parts/h | 25 ideal × 80% assumed run efficiency × 98% yield |
| Planned parts (Q) | ~3,210/month | 164 × 19.6 |
| Potential capacity (R) | ~54% | 3,210 ÷ 6,000 |
So 139% on paper is about 54% in reality. The shortfall is around 2,790 parts a month, or ~142 more machine-hours at the real rate. Quote without closing that gap and you find out at capacity verification or in the third month of supply.
Ways to close the gap, costed:
| Option | What it adds | Rough ₹ cost | Catch |
|---|---|---|---|
| Overtime on both VMCs | ~142 h/month, or ~71 h per operator | At Haryana's basic skilled minimum (from 1 April 2026, CPI-linked; Labour Department notification No. 2/25/26-2 Lab of 9 April 2026) of ₹711.56/day (≈₹89/h), twice the rate is ≈₹178/h, so about ₹25,000/month in operator wages as a floor. Your actual pay will be higher | The OEM won't accept it as planned capacity. Check ~71 h a month per operator against your state's overtime cap; needs worker consent. Fatigue and scrap go up |
| Third shift on both VMCs | ~390 h after breaks (before maintenance and changeovers), or up to ~7,600 parts | Two operators at the skilled minimum of ₹18,500.81/month = ₹37,000/month as a floor, plus a night setter or supervisor and power | You need people you can hire and keep, and time for maintenance. See the third-shift ₹ case |
| Recover hours on existing work | Assume existing-job hours drop 560 → 480 and new-part changeovers halve, giving ~100 h or ~1,950 parts | Mostly fixtures, tool presetting and material staging. Little capex | Needs measured changeover and wait data to know where the hours are |
| Quote a phased ramp | Commit to what you can prove now and step up on a dated plan | Nil | Some buyers won't accept it. Being honest early protects the relationship |
Say each bracket earns ₹40 of contribution (an assumption). At 6,000 parts that is ₹2.4 lakh a month, so the third shift fits inside it. But if you quote 6,000 and ship 3,200, the real loss isn't the missing contribution. It is premium freight, line-stoppage debits and your supplier rating with that customer. And if R stays well below 100% even after you recover hours, the gap is structural: a third shift or another machine is the honest answer, and the buy-or-recover test tells you which.
Run the check in five steps
- Get the right volume. Ask the buyer for the planning or peak volume and the ramp profile, not just the annual figure divided by twelve.
- Name the true bottleneck. List every operation the part goes through, including outsourced heat treatment, plating and inspection, and find the one with the least spare time.
- Measure existing load for two weeks. Track hours actually used on that machine by current jobs, setups included, not what the schedule board says. A rough log works. Timestamps work better (see ways to track old CNCs).
- Fill in the formula with real numbers. Use measured rate, measured changeover time and no overtime. If R comes out below 100%, you have your answer, or your list of conditions.
- Cascade the check. Ask your casting, forging or bar-stock supplier to run the same check for their share of the volume, in writing.
What cameras can and cannot tell you here
Cameras pointed at your machines can give you step 3 without anyone keeping a log. Over a couple of weeks they show when each machine was actually running, how long changeovers really took, and how often a machine sat waiting for material, the crane or a first-off approval. That is the "hours already committed" line and the changeover line, measured instead of guessed.
What video can't do: give a cycle time to the second on an enclosed machine, see dimensional scrap or tool wear, or tell you whether a new part's tolerances are achievable (that needs gauging and SPC). It can't see your sub-supplier's furnace, your power or compressed-air headroom, or whether your setters can handle a new part family. Treat camera data as the honest hours; the feasibility judgement stays with your engineers.
If cameras cover the floor, workers are in the frame even when you're watching machines. Under DPDP, put up a clear worker CCTV notice and keep the purpose limited to production.
Where Mama fits
Mama reads your existing cameras over RTSP/ONVIF, or cameras we add, and every morning sends the owner a plain-language WhatsApp note: which machines sat idle yesterday, for how long, and why. Over a few weeks that becomes the measured load you need before you quote. It watches machines and flows, never ranks operators. Send a short phone video of your floor and you get back where the hours go and a camera plan for the blind spots, so the next RFQ's capacity number is already on your phone.
FAQ
How do I check capacity before quoting an OEM RFQ? Take scheduled hours on the bottleneck operation and subtract breaks, planned maintenance, changeovers and hours already committed to other customers. Multiply what's left by your real good-parts rate, not the cycle-time rate. Compare that with the customer's volume. Below 100% means you can't quote the full volume as-is.
What is run-at-rate or capacity verification? A production run on the actual line with production tooling, operators and speeds, showing the customer you can make good parts at the quoted rate. In Ford's 2002 Phased PPAP it meant producing at least one day of the customer's daily volume over the intended shift pattern, without counting overtime.
Can I plan on overtime to meet the volume? Not as base capacity. OEM verification usually excludes overtime. Under the OSH Code, overtime needs the worker's consent, is paid at twice the wage rate and is capped by state rules. Keep it as a buffer for peaks.
What if the check says I can only do half the volume? Recover hours on existing work, add a shift or a machine, or quote a dated ramp. Any of them beats accepting the full volume and failing verification.