Try our FAQ search!
- Accounting code?
- Override code?
- Average order
quantity?
- Product field?
- Safety stock plan
flag?
- Physical inventory
tags?
- Price breaks?
- Minimum and
multiple?
- Repetitive scrap?
- Material pull?
- FTP file transfer?
- Kanban labels?
- Pallet sheets?
-
Receiving label?
- Shop order traveler?
- Labor tracking
break and lunch adjustments?
- Floor stock?
- Knowing where the cost
comes from?
- What are Low Level Codes
(LLC)?
- Total selling cost?
- Stocking time?
Accounting
code?
The default accounting code is "A" but can be changed in System
Manager/Configuration Editor/Shipping Address. The accounting code
associated with each part number can be set to different values
(i.e. B, C, D etc) then assign different GL #'s based on the
accounting code. Example: In FG (user defined) stockroom you can
have three different product lines and desire to keep each product
line associated with different GL #'s. Assume we have 25 parts in
product line 1, 25 parts for line 2 and 25 for line 3. All 25 parts
in product line 1 could have an accounting type of "A", all 25 parts
in line 2 could have accounting code "B" and line 3 could be "C".
In the Financial module/Maintain GL Accounts/Stockrooms -- You would
set up three entries for:
"FG" stockroom with accounting type "A" associated with the desired
GL# for line 1 products.
"FG" stockroom with accounting type "B" for another GL# for line 2
products.
"FG" stockroom with accounting type "C" for another GL# for line 3
products.
The Maintain Default GL Acct Tables must also be setup for for each
different accounting code even if the GL #'s are the same. i.e. If
you are using 3 different accounting codes then each default code
must have 3 entries. One for "A", one for "B" and one for "C". In
the same Financial module/Maintain GL Accounts/Default - For
Accounts Payable you would set up three entries for:
ACCTPAY with accounting type "A" associated with the desired GL# for
each part with an accounting code of "A"
ACCTPAY with accounting type "B"
ACCTPAY with accounting type "C"
The from-to charge report and FIM module will generate errors if
every accounting type code is not represented in the default table
or stockroom associated with the part!
Another way to handle the different GL#'s is to have all parts as
accounting type "A" and have different "FG" stockrooms. i.e. "FG001"
for one product line and "FG002" for another. That way there is only
1 entry (for the "A" code) in the stockroom and default tables.
The override GL account table provides the user the ability to
specify a special GL account number be used when receiving or
issuing material. The 3-digit override codes are set up in the
Financial module/Maintain GL Accounts/Overrides. When receiving or
issuing material the system offers the ability to specify an
override code. If no code is entered the system will automatically
apply the transaction to the GL number assigned to the default code.
This capability permits the user to track material usage for a
special project. i.e. If a special development project is launched
the accounting department can assign a special GL # to track all
cost associated with the project. The MRP coordinator simply assign
a 3-digit GL Acct. override code with the special GL
#. When issuing or receiving material the operator simply enters the
override code in the GL Reference field when processing the
transaction. The system does have a switch to force override codes for
unplanned receipts.
The average order quantity is used for manufactured parts that have
setup time to spread
the setup cost over the "Average order size". If you have a minimum
order quantity then the "average" should be set to at lease the
minimum quantity. I.e. If the average order size is 30 pieces and
the setup time is 30 minutes, the system will apply 1 minute's setup
cost to each piece. The "audit part master" report in the Crystal
Reports off-the-shelf audit group will check for average quantities.
This is a 4 digit field in part/sales that can be used to further
sort category fields. This can be useful with generating a sales
price list and additional sorting is desired on the category field.
In System Manager - Activity - System Configuration - Max Switches -
MRP Plan Safety Stock. This is an option to plan safety stock orders
if there is no demand for the part. If the inventory level is below
safety stock and the flag is "N" the system will not generate a
planned order to cover the shortage until there is a customer order
or higher level demand for the part. If the flag is "Y" the system
will generate a planned order anytime the inventory level is below
the safety stock level.
This option permits the user to build the Physical Inventory tag
file ahead of time, pre-print the tags during daylight hours then just before starting the
counting process automatically load the current on-hand quantities into the tag
file.
Additional sort -- If Crystal Report Writer is used to print the
old style physical tags there is advantages over printing in MAX. The primary
advantage is providing additional sorting capability. I.e. If you
have a lot of parts in a stockroom and the location field is not
used then specific items in the part master (commodity code) or
other fields could be used to further sort the tags.
You should have at least one price break even if the vendor does not
give breaks. i.e. If the part is always $10.00 then enter a quantity
of 1 with a cost of $10.00. If there is a price break then the
minimum quantity should be reviewed.
If the vendor does give a price break then consider setting
the minimum order quantity to match one of the quantity breaks. i.e.
If the vendor gives a break for 25 then consider setting the minimum
order quantity to at least 25. Also, if you must purchase items in
multiples then setup the multiple order quantity. i.e. If eggs are
purchased, the minimum order quantity would be at least 12 and the multiple
order quantity would also be 12. If the system needs 14 eggs the
system would generate an order signal for 24 eggs! The Safety Stock and Inventory
Evaluation report in the off-the-shelf Inventory Group can help
determine average monthly usage based on history.
We have set up a work-around in MAX to provide shift and reason code
information along with actual manufacturing date for items
that are good or scrapped. The repetitive scrap reports are not
available in the off-the-shelf section because the reason code is
different for each user. We have done extensive work in generating
Crystal report worksheets for the user to record actual production
and scrap at the time of manufacture.
We have set up a procedure in MAX to provide the ability to stock
material in more than 1 stockroom and automatically signal a request
when the stock level in the primary stockroom gets below a specified
level. The system will also indicate the desired quantity to "pull"
or transfer. This is useful when large amounts of material is
received from off-shore suppliers and can not be stocked in the
primary stockroom.
Click here to
visit our material pull reports.
The FTP (File
Transfer Protocol) transfer function permits both
Manufacturing Systems Group (MSG) and our customers to upload or download files
of any size to a sub directory on our web site. This eliminated the problem of
trying to attach large files to an email
message.
Click here to
view our FTP transfer page.
We have bar coded Kanban labels that can be used for bin's of
material produced on the shop floor. Normally the kanban sheet
is printed ahead of time and attached to the shop order.
As material is produced and placed in bins one Kanban label is
attached to each bin. This provides a simple and easy way to identify material produced on
the shop floor and ready for the stockroom. Click
here for an example of a 2-up Kanban label.
We have a bar coded pallet sheet that can be used when receiving
pallets of material. The sheet is printed and placed on
the
pallet facing the fork lift driver. In addition to other items the
sheet contains the part number, stock ID/location and quantity on
the pallet.
The fork lift driver can look at the sheet
when placing the pallet in the warehouse. The sheet is also useful
when performing physical inventories. If the pallet wrapping is not
broken the counters can easily read
the quantity on the pallet from 20 feet away. Click
here for an example of a Pallet sheet.
We have a receiving label for purchased items that can be used to
attach to material after receipt-to-stock. This label displays:
-
Part number and description
-
Stock ID/location
-
Part revision number
-
Lot number
-
PO #, date of receipt, vendor ID and unit of
measure (Date on label helps FIFO procedure)
If a procedure is
set up to:
-
Receipt-to-stock
-
Print the label
-
Attach the label to the material (Label on
material indicates the PO has been received)
-
Read
the label to know where the material is stocked.
Click here
for an example of our Receiving label.
The shop order traveler is used where a large number of shop order
can be waiting at a work center. The traveler due date
is converted to a large Julian date so the operator only needs to pick the
lowest number traveler number to work on next. This is useful where
a number of pallet's are waiting for work. The operator can easily
see the "due date" from 10-20 feet away. Click here for an example of a
shop order traveler.
These reports will automatically calculate the adjustment time when
an employee is logged in to the labor tracking system
through or part of a morning break, lunch time or afternoon break.
The employee can stay logged in to the labor tracking system and the
system will automatically calculate the adjustment time. The gross
run time, adjustment time and net run times are displayed. This
provides management the best "actual" labor hours required to
manufacture a part.
Click here to
go to the Labor Tracking Adjustment reports.
Floor stock?
Floor stock is usually used for very inexpensive parts (nuts, bolts
and screws) that can be kept on the shop floor close by the assembly
point. These items are reorder parts X-Y (usually Y for
purchased). These parts do not appear on the pick list however, they
are on the bill of material for costing purposes. The inventory crib
keeps the stock of material. When the person on the shop floor needs
material the crib person performs an unplanned issue from stock.
This is usually a box of material. The MRP explosion will identify
reorder parts below their preset reorder point. In between
explosions either purchasing or inventory can run the "Below Reorder
Point" report to identify parts that need attention.
Click
here for an example of the Below Reorder Point report.
Knowing where the cost comes from?
There is little known feature of the cost rollup module that permits
the user to display a one page printout of the cost information
without looking through pages of cost rollup printouts. This feature
displays:
-
Material and material burden
-
Labor and labor burden
-
Routing labor by work center
including setup cost
-
Sub-contract cost, if any
Navigate to Costing/Batch/Recalculate Cost Rollup. Select the
following:
-
Enter part number
-
Recalculate cost = Y but don't save
-
Cost set = 00 if you have multiple cost option
-
Report options in LLC sequence
-
Rollup type = Neither (Be
sure the rollup type is Neither)
-
Process
Click
here for an example of the Standard MAX Cost Rollup report.
You will notice the labor and labor burden cost on the top line are
calculated in the routing section under the bill of materials. This
is the labor cost for the top level assembly only. The routing cost
also includes the setup cost calculated as a percentage based on the
average order quantity. I.e. If the setup time is 30 minutes and the
average order quantity is 30 then 1 minute is included in part
routing operation under setup hours for that work center.
This report yields a nice one page report of all the cost associated
with a part.
What are Low Level Codes?
Low level code (LLC) represents the lowest
level a part occupies considering all bills of material. A part
may be several levels deep in one bill and the same part report to
the top level in another. When performing the low level code
calculation the system determines the absolute lowest level for a
part considering all bills of material. When the MRP explosion is
run the system starts at LLC zero and determines the requirements
for level 0 parts from customer or master schedule orders.
After calculating the demands for level 0 parts the system moves to
level 1 and calculates the component requirements from the demands
on the level 0 part. For each demand for the parent part there will
be demand times the BOM quantity for all components. This is called
dependent demand. The total demand
is established from the component dependent demand plus independent customer
orders.
This procedure proceeds until all the levels have been processed.
The total demand for a part is not known until the MRP explosion is
processing the level associated with a part.
When parts are added to the system the LLC is zero until the LLC
calculation is performed. If you run the explosion prior to
performing the LLC calculation the system will not generate any
requirements for the part unless it happened to be a top level part.
Several things to keep in mind about LLC's:
- Absolute vs. relative (The LLC on a part is not relative to it's current bill
of material)
- Perform the LLC calculation prior to running the MRP explosion.
- Run the LLC calculation prior to recalculating cost rollups.
- Run the LLC calculation any time you add new parts to the part
master.
- Perform the LLC calculation whenever adding to or changing the
product structure (BOM)
- Reset all low level codes (Performed when a lot of BOM's have
been changed)
- Recalculate and no print
Example:
Top Level Part # (ABC
and it's components) (0) = low level code
^
^ 1st level down (456 sub-assembly and its components)
^
^
^
^ 2nd level down
sub-assembly
^
^
^
^
^ ^ 3rd level down
ABC(0)
123(1)
456(1) >>>>>>456(1)
789(4)
222(2)
333(2)>>>>>>333(2)
444(2)
555(3)>>>>>>555(3)
666(3)
888(4)
777(3)
789(4)
Notice that part 789
appears in two bill of materials however the lowest level the part
"occupies" is level 4. The total requirements for part 789 are not known
until the system is processing level 4 parts. There could be spare part
orders or other demands for part 456, 333, 555 that could
produce demands for it's components. There could also be spare part orders
for 789.
Total selling cost?
There are three parts that make up the cost:
- Total Manufacturing Cost or Cost of Goods Sold
- Total Pricing cost and
- Total Selling cost
Total Manufacturing Cost
(TMC) also
called Cost of Goods Sold
(COGS) is made up of the following:
-
Labor cost +
-
Labor overhead cost +
-
Material cost +
-
Material overhead cost
I.e. Labor$ + (Labor$ * LOH%) + Material$ + (Material$ * MOH%)
Example:
If labor cost is $100, labor
overhead is 300%
and material is $10, material overhead is 13%
Then COGS = $100 + $300 + $10 + $1.30 or
$411.30
This is the cost to put the item “on the shelf”.
Total Pricing Cost
(TPC) is made up of:
SG&A is usually cost for sales force and company overhead
I.e. President & secretary salaries, sales
department cost, building rent & utilities and non-manufacturing department cost
(QC & Finance).
TPC = COGS + SG&A%
Example assuming SG&A at 23%:
$411.30 + ($411.30 * 23%)
Then TPC = $411.30 + $94.60 or
$505.90
This is the companies break even cost!
Total Selling Price (TSP) is made up
of:
-
Total Pricing Cost +
-
Markup %
TSP =
TPC + Markup%
Example: Assuming desired markup is 30%:
$505.90 + ($505.90 * 30%)
Then TSP = $505.90 + $151.77 or
$657.67
Click here to view a Word
document of total selling cost for later review.
Stocking time:
Stocking time usually specifies the time spent in QC prior to moving
the material into the inventory cage. This time is added to the plan
and build time for either manufactured or purchased parts. If the
company is purchasing material from off shore and the PO due date is
to represent the supplier ship date simply increase the stock time
to represent the working days it takes to get the product in the
door after the international supplier ships from their dock. This
time must represent the freight forwarder time, the number of days
on the water, the receiving freight company time, travel days from
the receiving freight company plus the incoming inspection days, if
any. The vendor ship date will appear on the PO as the "Due date"
however the MRP need date will be the "due date" plus the ship days.
All days are working days. I.E. 21 days represent one calendar
month.
