Multi Site Standard Costing

[Adrian_Skuodas]

People,
If using standard costs as the basis for valuing inventory, how do you conduct periodic cost reviews across multiple branch plants, where some branch plants make sub assemblies to be used in the production process in other branch plants?
The bill of materials and routings for these items only exist where the item is manufactured, and the branch plant where it is finally used treats the item more like a purchased component. I am having trouble working out a simple way to conduct a periodic revaluation of inventory, with the aim of keeping a standard cost for an item constant across all branch plants. Is their a sequence I must follow
(i.e. complete standard costs in the lowest level branchs first then copy the costs to the other branch plants and then build costs in those branch plants?)
This is a multi currency environment, hence costing has to be done at the branch plant level, even though there should not be any deviations in costs across branch plants.
Does anyone have any suggestions ?
Regards,
Adrian Skuodas
Xe Update 6, Citrix, HP, Oracle

 

[ame]

Hi Adrian... When they send the components between the branches are they
using ST/OT or just OP orders? thanks, Bobby


If using standard costs as the basis for valuing inventory, how do you
conduct periodic cost reviews across multiple branch plants, where some
branch plants make sub assemblies to be used in the production process in
other branch plants?
The bill of materials and routings for these items only exist where the item
is manufactured, and the branch plant where it is finally used treats the
item more like a purchased component. I am having trouble working out a
simple way to conduct a periodic revaluation of inventory, with the aim of
keeping a standard cost for an item constant across all branch plants. Is
their a sequence I must follow
(i.e. complete standard costs in the lowest level branchs first then copy
the costs to the other branch plants and then build costs in those branch
plants?)
This is a multi currency environment, hence costing has to be done at the
branch plant level, even though there should not be any deviations in costs
across branch plants.
Does a!
Regards,
Adrian Skuodas
Xe Update 6, Citrix, HP, Oracle

 

[tsedidler]

We encountered the same situation here, also multi-currency so we must cost at branch/plant level.
Our production runs in series through several branch plants, where the completed product from one plant becomes the components at the next. (We IT the inventory from one plant to the next). It is a real headache for us, but we do basically what you suggest. We input and reval costs for purchased items at the lowest level first. Then build the manufactured items at that plant. We then copy the cost to the next plant and build the next level costs. Note that we have identified these items at the receiving plant with a unique stocking type to tell us that they are not really purchased, but transferred from a sister plant.
I can give you a lot more details of our process through fax and/or direct e-mail if you like to see if it will work for you. Like I said, we do not like it but have not developed anything better. Maybe JDE will eventually allow a method to denote linked branch plants to share a standard cost rather than forcing an all or nothing approach to common standard costs.

Doug Dutton
[email protected]
717.852.2274

 

[askuodas]

Doug,

Thanks for the reply.=20
It is a headache having to cost from the bottom up - the added complication
here is that the users want to be able to=20
'save' each iteration of their cost roll up process.=20
Comparing a next standard with current will give details as to how the
standard cost has changed by cost component (e.g Material Costs A1) but this
won't necessarily detail was the change in material cost of a manufactured
item due to a BOM change or a cost change for the components.
The costing process review looks at the expected usage for the next period
(6 months) and then the total cost change due to=20
a) BOM and Routing changes
b) the effect of Last in Costs on Standards
c) the effect of reviewing and changing major component items costs to value
other than Last in Cost
d) the effect of work centre rate changes.

We are thinking therefore to 'save' each step of the costing process as a
different cost method.

As you can see, this coupled with the issue of having to cost from the
bottom up, makes for a long and complex process.

Am trying to work out a simpler way to give them what they want.

Regards,

Adrian

 

[MilwaukeeTool]

We had a problem close to yours but not exactly the same because we did not have multi-currancy. I am not that familiar with multi-currancy so the following solution may not work for you.

What we did, was create a dummy branch plant, called 2017, and stored a complete set of BOM's, routings and branch plant records. We used this branch plant to set our costs. We then copied the cost components from branch plant 2017 to the individual branch plants using P30890. P30890 will only copy the component if the part number is on the "TO" branch plant. Once this was completed we ran the standard cost freeze, P30835, to update the cost ledger for each branch plant. The downside of this method is you double the amount of work you must do when entering BOM's, routings and items. The upside, besides the costing, is you now have a complete picture of a BOM for the finished item.

We also had a similar situation where they wanted to compare the cost from last year to the current year. Before setting the new cost, using the above procedure, we would copy the ledger and components to a save file using the CPYF command. In the saved files we used SQL commands to change the cost method from 07 to Y1 (year 2001) and set the inventory flag (COCSIN) from "I" to blank. Then we copied the Y1 records from the saved file back into the cost ledger and cost component files. Finally we set the standard cost using the method I previously described.