Production Order Cost Calculation
An intelligent way to find discrepancies and correct master data
What is Production Order Cost Calculation?
As a standard in NAV, you can see what an item’s resource cost is at an individual level or accumulated level.
With Abakion’s Production Order Cost Calculation you can follow it right down to the operation level and distinguish between Setup time and Operation time, as well as between direct and indirect costs.
This allows you to quickly compare what the cost should have been according to the Routing and BOM, in relation to what the actual cost was. Thus you can quickly and effectively correct the master data.
For the Financial Manager
- Avoid large stock discrepancies during normal annual inventory counts when master data is gone through by getting warehouse and items-in-assembly values that match all the time.
- Set greater focus on discrepancies along with the ability to improve quality faster.
- Get data to match so that production can deliver more accurate projections to the finance department.
For the Planner
- By comparing the projected cost and time with the registered cost and time, you can see the direct or percentage deviation of material consumption and time registered.
- Quickly find the largest and most important discrepancies in operations or materials so that they can be corrected ad hoc.
- You can see, for example, cost calculations for “all production orders reported complete in the last week,” and get the data corrected while the production employees remember why there were discrepancies.
For the Production Manager
- The organization can get in the habit of correcting data continuously.
- A simple tool to track discrepancies and constantly keep data in order.
- Makes it possible to explain the cause of discrepancies much more effectively.
Core functions in Production Order Cost Calculation
Comparison of master data with records
When a Production order is finished, you can work out its cost calculation.
In doing so, the projected cost of the order is calculated and divided not only into all Materials and all Operations, but it is also broken down into direct and indirect costs
The projected cost is compared with the actual registered costs and discrepancies are given both in terms of money and as a percentage. Discrepancies are shown separately for the total Production order, for all materials on the order’s BOM and for all operations on the order’s Routing.
Focus on the largest discrepancies
From Production Order Cost Calculation you can open a new window where all the lines can be seen.
This allows you to periodically search the lines that have the greatest percentage of discrepancies or those that have the greatest financial impact, and examine those Routings and Bills of materials with a fine-toothed comb. This allows you to find the largest discrepancies with minimal resources.
Assess data over time
The calculated data for cost calculation is stored in a table, so you gradually build up a production history. That way you can look back in time and compare times from the same operations and find significant discrepancies.
When you find an order with discrepancies in any operation or material consumption, you can easily compare it with previous orders and find out whether the discrepancy is a one-off or something symptomatic instead.
Can be accessed from the Item Card or date filter
When Cost Calculation is called from the Item card, you can specify how many of the recent Production orders which are reported complete on the specific item should be calculated and displayed in the window. That way you can delve into a particular item and run Cost Calculation on it.
You can also set the date filter on the calculation, so you can, for example, see all the orders reported complete within the “last week”, and then correct the data while the discrepancies are still “fresh”.
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