Cost Management is bigger than what BPCS supports, because invariably what companies want can fall outside the combinations supported directly by BPCS.

There are also the complications of what modules in full use, or implementation transition, what business operations exist outside BPCS, but impact data inside BPCS, how you manage identification & cleanup of dirty data, and worker understanding of any ERP's actions effects on costs and Gen Led.

Since you are on BPCS V4.03 you may also need to be sensitive to how Y2K is managed. V4.03 is not Y2K compliant native. Although we may be far enough beyond year 2000 that this is no longer a major issue.

I suggest that any time you change the rules of your business, you also record the date(s) of the changes with clarity of old rule, new rule. Questions are sure to come up later ... which rules were in play when some action occurred whose results now seem peculiar.

You're talking standard cost for labor & overhead, which comes from BOM, Routings, Work Center Rates, combined with actual material cost.
But standard is cost set # 2, actual is cost set # 1.
This means you need to capture actual material cost & get it into standard, or into a combined cost set that has elements of standard and actual.

One of my managers has recently asked me for a "contrived" cost, in which his definition of this was a bit unclear. Clarity is critical if we are to deliver what people really want.

I got him a report on items sold this year, by customer & item, with labor hours content, commodity content, and material content as a percentage of price, in which excessive percentages were bolded and colorized.

There is no BPCS software to copy only raw material actual costs into standard cost or any place else. None of the cost transfer programs can be run via item type (raw materials) or item class, or even range of item #. They're all focused on facility & cost dimensions (sets, buckets, types of costs), but maybe you could copy material costs only, which would include actual material content at all BOM levels, then do a standard cost rollup, which will repair material content costs at higher levels, than purchased level.

How BPCS gets actual material cost for raw materials is either thru AP for PO's received or manual entry. This does not get actual cost into standard cost of raw materials. How actual cost goes up BOM from raw materials to finished parts is an extremely slow painful process, complicated by how you number your parts in BOM production orders. I call it the "trickle up" process.

BPCS prohibits roll up of actual cost.

However, we have a cost set we call "TRUE" material cost impact.
Copy actual to true, roll up true, and we see impact of changes in actual material cost on end items, and do so without contaminating standard cost.

Sometimes we copy a cost to simulation, before doing roll up, then run a comparison of results to simulation, to get simple list of how costs were changed in the roll up.

We developed reports to identify recent relevant transactions on items where actual cost changed, or totals are suspicous, then we manually key actual into standard. This can be an extremely tedious process, so you may want to create a program to automate the process.

We no longer do this, because of a management policy change after an auditor said
"If you constantly update standard, there's no such thing as standard cost."
The word "standard" does not imply something that is constantly changing.

So we began to track trends in actual cost fluctuations to identify erosion of profit margin so we knew which customer parts were due for requoting. Right now we have lost the ability to do this, since there has been another management policy change.

We have also had year end processes using BPCS cost transfer modified, to give us a cost set being populated with next year costs, and later a frozen last year comparison cost, so physical inventory value can be shown at new year costs, next year costs, and people can be doing cost maintenance & physical inventory, without totally shutting down the business. I have no idea how we going to do this end this year, due to many management financial policy shifts this year, that have made it impractical to implement last year's end year cost revolution at end of this year.

When there are corporate financial policy changes by managers who do not have a thorough understanding of all the activities of BPCS cost accounting, then the results can be like what politicians call "unintended consequences." Ideally, any company wants to keep these to a minimum..

We are currently running on V4.03 and I have been asked to implement the
Cost Account function of BPCS. We currently have most of the modules
installed, but not necessarily using them to their full potential. Does
any one have any recommendations as to the best approach to implement
costing? Basically, we want to use a standard labor and overhead cost
for the entire year, plus actual material costs.

Are all the set ups necessary in BPCS to do this? I was told, going
forward, we will implement more and more of BPCS manufacturing, but not
right now. I know I can plow through the run manual for Costing, but
I'm hoping I can get some quick input from the community.

Thanks in advance -

Michael Perna

Business Systems Analyst - Finance

t. 310.832.8000 | f. 310.519.2605
P.O. Box 1950 | San Pedro, CA 90733 | USA, Earth <>

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