I am looking for information on the Bill of Materials and cost roll up. We have an issue and I know very little and currently have little info to help me even know where to start.
What is your issue?
Brad
I have two parts, that I know for sure, that in Part Tracker, the STD. Material is off. Off in that the more expensive part is reading cheaper than the cheap part. This is also messing with our quoting. According to what I have read, this is directly affected by Part Maintenance and indirectly by BOM. If so, Iâd rather not use Part Maintenance directly as the price of our raw materials may change over time. So, indirect is best. But Iâm trying to narrow down what would cause this to happen. So, BOM came up and wanted to run it down.
Okay, so the only influence Part Maintenance has is what costing method you are using to cost the manufactured part. Look at the Part > Sites tab to find the Costing Method. If the Costing Method is Standard, then you will want to look at the material in your Method of Manufacture. Do you have scrap on the material? When we were working through costing, our material costs were high because of the scrap. We use resin and set the purge up as scrap. We didnât set up a costing lot size, so it took all the purge cost and added it the cost to make one part. Had we set up a costing lot size, it would have spread that material cost over the number of piece set up in the costing lot size. There are other reasons why the costing can be off. You also need to look at each material and make sure it has the proper cost as well as the proper quantity in the method.
As for pricing of raw material, it is not added through Part Maintenance. The cost of the raw material is added when the raw material is purchased or when a cost adjustment has been done to the part. You will also need to look at the costing method for each raw material.
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William,
It sounds like you are talking about a manufactured part.
Have you run a BOM cost report? If so are there materials that show up with zero cost there?
If you find this then you may need to go into the Cost Adjustment screen and add the standard cost(s) for that part. Then re-run the BOM cost report again.
Hope this helps.
Brad Boes
bradboes@boosterpconsulting.com
231-845-1090
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Before I run down everything I wanted to post these pics to make sure I am understanding correctly.
The 1st pic, at the STD Material is .175 and the 2nd pic has it at .17251. The top one is correct, but the 2nd pic is off. Should be an Std material of .21667
The parent parts are set up as Avg, and these are Std. Scrap is set to zero.
So, I ran the BOM and came up with these numbers.
For the part in the first picture, the BOM cost report shows (no zeroâs anywhere)
Material costs: .161
Labor Cost: .05238
Total Cost: .21338
As you can see they are different than what is in the part tracker.
Kinda lost on how the BOM is one number and Part tracker is completely different.
Standard cost can only be changed one of two ways:
- Someone puts in the costs with cost adjust (manually or DMT)
- the part is cost-rolled and posted
Average cost is changed when the part is manufactured and taken to stock. The average cost will not change if the part is shipped from the job. The average cost can be changed by using Cost Adjust (manually or DMT).
It appears to me that someone put these costs in originally. Is this part a non-stock part?
The BOM Cost report simulates a cost roll as of now.
For Material Cost Changes:
if the Components that go into the bom was changed or their cost changed, then the rollup will be different in BOM Cost Report. Also, check if the Qty per Assembly for the component is different between both parts or have been changed.
For labor cost changes:
was Hrs in the Bill of Operation (Routing) changed?
Was Resource grp/resource Rate changed?
Basically we get material in that is 48 x 150, then we cut this down into âsheetsâ sizes of either 7.5x16.5 or 8.5x17.5. The part above is the âsheet.â So these parts are stock and quantity bearing.
Qty/Parent are the same. and Resource rate is still the same.
Your part is standard costing. I see it at the bottom of the Part Tracker snips you posted. I would bet that this part has not been cost rolled. You can do a cost roll for the part without posting it. Do that and see; it should give you what the cost should be. It should match the BOM cost report. Once you have done a cost roll and post it, then it would equal the BOM cost report. If the costs are not right in the cost roll (before you post it), you need to look at the method of manufacture to find what needs to be changed.
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I was going to say the same 
I suspect the part was not cost rolled before. If you look at part transaction history and look at âADJ-CSTâ transaction with Reference " Standard Cost roll-up", i would suspect there would be none. The cost couldâve intially been loaded via Cost Adjustment or DMT mass upload. (just a guess) rather than Cost Roll via Costing Workbench.
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The last time a cost roll up was done was 3/29/2016. How often should this be done? And yes, we migrated back in 2015, before I was around, and everything was imported over.
It was recommended to us that the cost roll should be done at a minimum, annually. If you know that there has been significant changes to costs, such as raw materials, you will probably want to perform a cost roll.
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We do the cost roll once a year.
(My recommendation based on my experience)
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Make sure all your Purchase component costs are up to date since they roll up into component material cost of the mfg part. i usually take the most recent PO or AP invoice cost and load it into standard material cost for purchased parts via a BAQ Query. if not familiar with query then can take âLastâ Cost and load that into standard cost field for the purchase parts. Last cost is the PO cost of the latest PO receipt for that part.
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Update Resouce grp rates close to employee rates who usually work on that operation to make the mfg part so there would be less variances. Variance from job is calculated partially based on Std labor cost (Resource grp/resource rate x Routing hrs for operation) vs Actual Cost on job (Employee Rate x Actual Hrs reported against job)
Once these are taken care of, then you could run Cost roll via Costing Workbench en mass.
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So I can do a cost roll-up for specific parts? In other words, I do not have to do all the parts, I can do only select parts.
You can do a cost roll for specific parts. I would suggest doing that first.
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@Beth @althomas Just for educational purposes, I noticed that the labor cost on these parts are higher than they should be as well. Will the cost rollup take care of this as well, or does this have to be handled differently?
It should update the labor cost but whether it goes up or down depends on how much time you have for each operation on the routing (Bill of Operations) file for the part.
You could run the cost roll to see what the labor cost is before posting it. If you feel like the labor cost is too high then go into Engineering workbench and lower the routing hrs (standard labor cost = Routing hrs x Resource grp Rate / Resource rate depending what rate youâre using).
The cost roll is not saved (ex. loaded to part tracker ) till you actually post it.
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@althomas said exactly what I was going to say! Just donât post the cost roll until you think you have the costs right! HTH!
STD-COST changes should be determined by differences in the PDR (Production Detail Report) as to Estimate and Actual Costs. Most companies will run a complete std-cost-roll once a year, UNLESS:
- Noticeable or anticipated cost changes in procurement (or sub-contracting)
- Changes to the Engineered MOM due to different machinery/process
- Labor rate changes
- Burden rate changes
Usually 3 & 4 are bundled into consideration close-to year end and rates are projected per the entire year!
There are many places to âscrew-upâ std-cost updates.
- Was the MOM (engineering Workbench) appropriately updated per rev-level? ie: Is there anyone reviewing JOB performance (PDR report EST-vs-Actual), which results in the necessity for ECN, MOM changes.
- Sub-contract costs are not on the OP⌠or inaccurate
- raw-matl parts have no costs, since they may not have been procured/received yet (new product has been developed needed new procured part)
- there is no process to confirm NEW PART has accurate costing (especially if no cost-accountant exists) Engineering should audit new-part creation via costed-BOM report, inclusive of Accounting audit/approval
- Jobâs are not reviewed/audited based on delta to Raw-mat usage/cost, or production (labor reporting)
- std-cost roll is executed, but not audited to ensure EPICOR processed as expected
In your case: Audit the mOM, evaluate the Engineering (MOM = BOm + BOO) run a BOM Cost report, ensure the Engineered Rev is accurate⌠then process std-cost roll.
THe std-cost roll WILL USE THE PARTS approved revision (hope there is only ONE!!! and you do not have rev-c and rev-d approved, as rev c will be used [lowest alpha-betical entry~
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