RE: item costs (was: no subject) -- BPCS-L

To Deb @ Alba/Tefron

I believe that so long as the data is separated by item# (such as with asuffix) or by facility, the costs are accurate and reliable.

For another scenario than yours, we keep item #s using different item #sall the way through production, then the last step is to roll inventoryfrom one item # to another (redesignate transaction) to satisfy thecustomer order.

As soon as we combine same item, with different costs from differentfacilities, into the same facility, for the purpose of a joint customerorder processing, the costs are hopelessly mixed up, and we give thefacility, that did the customer order, the profits for the cost of goodsthat was done in the other facility, thus distorting your General Ledgerprofitability by facility. There are clerical advantages to consolidatedcustomer billing when it comes to matching customer payments to whichfacility receivables, but is that more important than accurate costs andaccurate financial statements?


Perhaps what is needed is:
1. Keep the different cost structures on same item by facility.

2. Modify the shipping billing process so that different facility inventoryof same item can be sent in a combined shipment.3. Modify the invoice billing so that the customer gets a bill showing weshipped some quantity of this item

X quantity from X facility methods
Y quantity from Y facility methods
The customer gets a consolidated invoice

BPCS keeps the data separate by facility cost structure so that thefinancial records are not sabotaged by customer service need to combineitems with different cost structures4. Modify accounting for customer payments so the money can be partitionedto the relevant facilities, including reports to the customers that do notconfuse them on what they still owe the total enterprise

But you wanted to do this with no modifications, so here is an alternativeapproach.


Keep all your facilities.
Add a new facility for the combining of items with different costs.
Get inventory to it via resupply orders.

Book the transfers from the manufacturing facilities to update salestotals, but not update receivables, so now you have accurate totals on yourmargins, without having to have your new facility cut payables to themanufacturing facilities, tracking play money payments between facilities.Process some General Ledger adjustments to compensate the manufacturingfacilities for the profits from sales by the new facility.


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