Overhead was: MRP -> Shop Orders -- BPCS-L

I could use an education in alternate ways to calculate overhead, otherthan basing it on actual reported labor. I am not well versed inaccounting theory of what belongs in manufacturing overhead, strugglingwith what is in BPCSDOC with no idea how much of this correlates to APICSand GAAP.

More than half the clerical work for us, on shop floor, and labor reportingwhat shop floor did, is the actual time to make the product, which we trackusing start time and stop time ranges. We use this data for variouspurposes which I am trying to figure out alternatives for, so that we caneliminate this burden. One of the things we use actual time for is incalculating overhead, which our accounting and management consider essential.

Also, we recently created a facility to handle the distribution portion ofour business, where we buy product for resale. Compared to ourmanufacturing facility, there is a small amount of handling of this productgoing on, but since we calculate overhead based on a percentage of directlabor costs, overhead for the new facility shows up as zero, which is notaccurate ... the manufacturing facility, that hosts the distributionfacility, is eating extra costs that should be allocated to thedistribution facility.

How do other companies, that do not capture actual time to make theproduct, get overhead, or do you run your companies using overhead of zero?

I am still struggling to satisfy my management desire to lower the level ofclerical support needed in the whole process of launching paperwork to ourshop floor, reporting what work was done there, entering the results toBPCS, and cleaning up the shop orders. The actual people who do this workare so covered up in volume of work that is to be done, that a lot of ourorders go a while in need of cleanup that is not being done, whichcontributes to bad data in our system.


Suggestions to management that are not satisfactory answers:

* Hire more clerical people to handle this, so that the paperwork gets tothe shop floor faster, so our realistic lead time can be lowered, making usmore competitive and better able to serve customers that demand shorterlead times and threaten to take their business elsewhere if we can't deliver* Invest more in continuing education so our staff utilizes BPCS moreeffectively, with less time wasting frustration* Buy one or more of those add-on products that make MRP moreuser-friendly, so we can get the clerical job done with less hassle,significantly lower our volume of bad data, and identify more of what is atrisk of being past due or shortage in time to fix it with less disruption* Buy one or more of those add-on products that automates repetitive keyingso that when data arrives in a machine readable format, we not need to havea human transcribe it* In other words, any suggestion to spend more money is not an acceptableanswer to the implied question of "How can we get the job done with lessperson(s)?"


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