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We have some items that we buy for resale, where there is no manufacturing on our part. Three way matching on the purchase orders get the cost correct on these items.
We have BOM and Routings by facility, with cost rollup by facility, shop orders by facility. This means that the cost by facility can be calculated correctly all the way through finished goods.
However, our shop order volumes fluctuate, and the sequence of shop order purging is not in sync with the sequence the components were manufactured, so that introduces some wild cost fluctuations.
Our problem is that the cost travels with the inventory, and we have different management wishes that are not compatible with each other and how BPCS works.
* One level of management decided that we would use LAST COST instead of COST AVERAGING * Some senior management wants the cost of items in facility X to agree with the unit cost of items in that facility, and the cost of items in facility Y to agree with the unit cost of items in facility Y,
* Another set of management actually moves excess parts across facilities.Suppose we have an order from a customer for 2,000 of the part, and we have 1,500 ready to go in facility X and over 500 available in facility Y ... we transfer the 500 so we can ship the 2,000, and repay the loan later as needed. However, transferring the 500 brings with them the cost structure that they had in facility Y, so now the cost in facility X is contaminated by what came from facility Y. One facility has many more cost buckets than the other, so the contamination is more obvious when it is being moved from a many buckets facility to a less buckets facility.
Bottom line, our business plan process is out of sync with what works in BPCS. - Al Macintyre http://www.ryze.com/go/Al9Mac BPCS/400 Computer Janitor ... see http://radio.weblogs.com/0107846/stories/2002/11/08/bpcsDocSources.html
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