RE: Cost Contamination -- BPCS-L

Hi Al,

In DRP maintenance item setup DRP100D1, there is a flag to declare the item
as purchased in the receiving facility. This flag interacts with CST940. It
will sum and transfer costs from bucket to bucket from sending facility to
receiving facility, etc. Perhaps this is another area to check out.

Daniel Warthold

-----Original Message-----
From: Dan Sweeney [mailto:dsweeney@xxxxxxxxxxxxxxxx]
Sent: Sunday, March 27, 2005 21:27
To: 'SSA's BPCS ERP System'
Subject: RE: [BPCS-L] Cost Contamination


Al,

Believe it or not but I did read your entire message.  I realize that
you are in a production environment and not in test.  Therefore, I
suggest the following:  Make sure that the actual, standard and frozen
costs sets are perfect.

1.  Record the specific cost sets for facilities 20 and 60 for a few
items (2-5).


2a.  Before you execute any transactions have someone zero out the
actual costs in facilities 20 and 60 for the items that you both produce
and purchase. 

2b.  Assure that all of the fields in the facility planning records
(CIC) are correct for the scenarios that your company executes.  I.e.
planning warehouses, facility wide allocations, etc.

3.   If you have the time and luxury copy the production database to
test.

4.   If not only execute a series of controlled transactions for
facilities 20 and 60.  Then check the actual, standard and transaction
costs for the controlled transactions and report the results. 

5.  The reported results should be what you expect seeing as you know
what the before and after results should be.

If the results are not what you expect check the areas of modification
and PTF's for 6.04.

In the past I have always seen the errors in cost have been in set-up in
a non modified system.
  


-----Original Message-----
From: bpcs-l-bounces+dsweeney=phoenixbcinc.com@xxxxxxxxxxxx
[mailto:bpcs-l-bounces+dsweeney=phoenixbcinc.com@xxxxxxxxxxxx] On Behalf
Of Al Mac
Sent: Sunday, March 27, 2005 5:26 PM
To: BPCS_L discussion
Subject: [BPCS-L] Cost Contamination

Feedback I hoping to see here is
    * perhaps there is some coding we should check to make sure that
some 
items are setup right
    * perhaps there is a known BPCS bug and a known work around
    * perhaps BPCS does not support what we are trying to do, and there
are 
suggested solutions
We are on 405 CD modified ... we are using small portions of DRP and JIT

and have modified them.  I told my boss that for this scenario, I
thought 
we should consult with our tech support, but he is reluctant to call
tech 
support every time something goes wrong ... he wants us first to check
what 
we can check in case we do in fact have some incorrect coding or 
inappropriate transactions, that we ourselves can identify.

Historically our items fell into several categories
    * manufactured
    * purchased
    * neither ... such as engineering change history comment in BOM and 
item#s used for purposes other than items
Recently we have some items that are BOTH manufactured and purchased,
and 
it is with them that we are having a problem.

Without me going into the business particulars, there are some parts
that 
we can manufacture on extremely short notice (like a few days) or we can

source more cheaply in which there is a long lead time (many weeks), so 
customers have choice of getting their parts in a few days after order,
at 
a higher price, or waiting several weeks and getting them at lower
price.

A related topic is making the two different prices easily accessible to 
customer service, for when they keying in the orders.  I suggested
having a 
different customer # for the same customer name address, one for
facility 
60 and the original for the manufacturing facilities, then place the 
facility 60 price in the special price file which has differentiation by

item and customer, but not by facility.

We use one facility for each of our factories,  20 40 etc.
In manufacturing facilities, the cost buckets of items include material,

overhead, human labor, machine, outside operations
Historically we consider cost variances in purchased materials to be a 
problem area, but expect variations in the actual cost of manufacturing.

We are using facility 60 for the distribution of the parts we buy on
behalf 
of customers.
Parts in this facility are setup using material cost ONLY
There should be almost no cost variance because we contract for pricing,

receive the parts, receive vendor invoice, do the 3 way match.
There are not supposed to be any BOM or routings in facility 60.

Things get setup so they are correct, then later we discover that
various 
items in facility 60 have had added to them a copy of the cost buckets
that 
facility 20 or some other manufacturing facility has, with the same
actual 
costs as that other facility, while standard zero for those non-material

buckets.  This in turn causes a cost variance ... we have not figured
out 
what damage downstream like to G_L, but basically this is something we
not 
want happening and need to figure out what causes it ... I found out for

the first time about this near the end of last week ... some co-workers 
have known about it longer than me.

I ran a query/400 listing buckets of facility 60 other than material and

total, which had got populated with non-zero, then for those items I 
checked what recent transaction there had been in any facility, since
the 
last time the costs had been believed to be correct.
    * They had been manufactured and shipped in facilities 20 40
    * They had been received and shipped in facility 60
    * They had been transferred both ways in and out of facility 60 vs.
the 
other facilities.
One co-worker speculates that what is happening is there is a bug in the

labor reporting such that when labor updates these items in facility 20
or 
another manufacturing facility, it also updates those actual costs in
all 
facilities ... I find this hard to believe since the different 
manufacturing facilities have never contaminated each other in the past.

My speculation is that when the item gets transferred between
facilities, 
for  whatever purpose such as doing a consolidated shipment, for 
consolidated inspection before shipment, or by mistake, the method of 
transfer causes the TO facility cost buckets to get populated based on 
which buckets existed in the FROM facility that did not pre-exist in the
TO 
facility.

Currently our cost basis is LAST COST, not any averaging, and our 
Accounting is at Standard Cost, with some monthly adjustments to
compensate 
for what is in Production Work in Process.

I suggested that perhaps we need an Al fixit program to be run regularly
to 
unpopulate facility 60 of the unwanted cost buckets.  Al's boss says no,
we 
first figure out what is causing facility 60 to get the unwanted stuff, 
perhaps we doing something wrong and it is better to not be doing that.

I plan to do some experiments in which I pick a weekend time when no one

else updating BPCS, find one of these items that has on-hand in both 
facility 20 and 60, is manufactured in 20 and purchased in 60, make sure

the costs are correct, then do one of the actions that is suspected of 
contaminating facility 60 costs, then check the costs again.  I have 
several different things I want to try.

But right at the moment I am covered up in more urgent work I need to
do, 
and next weekend is EOM, so it will probably be a couple weeks until I
do 
my round of tests, by which time I may have added to the list of things
I 
plan to check.

This weekend I spent a large chunk of time with cost repairs.
We had over 1,000 items in which the actual cost buckets did not add up 
right, a handful of items with negative costs, and other problems.
The reasons for this are problems previously discussed in BPCS_L and
stuff 
I had not looked at for some time, but now were contributing to some 
reports not being correct.

PS ... thanks for the XL/400 tips

-
Al Macintyre  http://www.ryze.com/go/Al9Mac
Find BPCS Documentation Suppliers 
http://radio.weblogs.com/0107846/stories/2002/11/08/bpcsDocSources.html
BPCS/400 Computer Janitor  
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