A New Concept in Cost Analysis for Made2Manage* ERP Users

Milwaukee, WI (PRWEB) March 9, 2009

Progressive Edge is excited to announce the release of version 2.1 of the Cost Calculator. Continuing on its commitment to provide effective and easy to use cost analysis for Made2Manage users, version 2.1 will provide a new capability in Profitability Analysis called the Calculated Actual Cost.

Make to Stock Actual Costing (sort of)

Depending on your Costing Method, M2M uses the Standard or Estimate Average to cost Make to Stock Items. These are the same costs used to report on profitability. The problem is that these costs can become very outdated in this time of extreme material volatility.

A real example in today's economy is that raw material prices are all over the place, generally upward. Sure, you could see these cost increases from the Payables side of things and Purchase Price Variance. But how will these price increases affect the Finished Goods? You won't know that until you do a Cost Rollup or look at each item individually through the costed BOM report.

With the Cost Calculator, you can see how these increases affect your profitability immediately. The Cost Calculator allows you to roll the Actual Costs of a selected number of Jobs and PO's, to calculate a true Actual Average Cost based on all levels of the product structure. We call this the Calculated Actual Cost.

For example setting the Job Count to 3 and the PO Count to 2, the Cost Calculator will perform a theoretical Cost Rollup to the Sales Order Level, using the Average Labor and Overhead for the last 3 Jobs (at all levels), and using the Average Invoiced Material Cost for the last 2 PO's of each component (at all levels). Setting these values to 1 will give you a Cost Rollup to the Sales Order based on the Last cost of all items in the product structure. Other settings allow you to trim off the high and low values prior to this calculation.

So if the price of a component used in a product went up, say steel, you would immediately see its cost reflected all the way up to the Sales Order level, without having to roll your standards. In addition, the rolled up costs will be based on the Actual Costs incurred, not the Standard cost.

Now imagine setting a Performance Indicator to highlight all of the Orders where my Calculated Actual Cost is different from my Standard Cost by more than 10%. You can now manage your exceptions.

Make to Order Actual Costing (better)

You may have assumed that Make to Order costing is Actual Costing. Well, not really. Sure, the Make Jobs collect the Actual Costs posted directly to them, but any Stock materials (purchased or manufactured) are issued to the Job at the Inventory Costing method (generally Standard).

So again, your system will not reflect the price increases of Stock material issued to the Make to Order job, unless a cost rollup has occurred. The Cost Calculator will roll these costs in a similar manner as described above for all Stock material. Make or Buy Items will still be costed as they currently are.

With the Cost Calculator, your Make to Order Sales Order Profitability can now be based on the Calculated Actual Costs which uses the Actual Costs for Make and Buy items, and the Actual Average for Stock Items in that product structure.

Full Drill Down to Calculated Actual Detail
Continuing on the concept of "Intelligent, Interactive Reports", when you drill down on a Stock Item a full Indented Product Structure is presented showing both the Calculated Actual Costs and the Current Standard Cost. This allows you to compare the costs and easily identify the part (or parts) causing the discrepancies. Drilling down from here will present the Jobs or PO's used in the calculation of the Calculated Actual Cost for that part. All of the Information is presented so that you can easily identify how this number was calculated.

Administrative Tools

Version 2.1 will now have an Administrative mode which will allow you the ability to control the views and the columns on each view, for a particular user. In the locked mode, the end-user will not be able to add/change the column definitions, the available views or the Performance Indicators.

This now allows you the capability to deploy the Cost Calculator to more users, but still protecting sensitive company information. So for example, you can now give access to the Purchasing View to enable users to see open PO's, dates received, and other general information, but not allow them to see the cost of the PO Items. Or give the user the Sales Order View, without allowing them to see costing and profitability information.

This expands on our goal to provide better (faster and simple) access to data, but allowing you control what each user has access to. Expanding on this point, you can give access to more users, without having to purchase additional M2M user licenses.

Job Performance

Significant enhancements have been made to the Job Views. In addition to showing the Calculated Actual Costs, statistical data has been calculated. The Average Lead Time, the Percent on Time, the Average Days Late, the Percent Complete and the Average Percent Scrap are all Statistical data available with a few drags of the mouse.

These are not simple calculations made at the Job level. This data is obtained by analyzing the detail Job transactions (i.e. the Moves to Inventory, the Shipments, the Labor entries) to provide real time-sensitive statistics.

So imagine being able to see the Average Lead Time of a Part over the last 6 months. Or see the Average Scrap Quantity for a part number. And if you want to see these same statistics by Product Class, Group Code, or even Customer, it is a simple drag of the mouse.

Additional Features

Additional columns and capabilities have been made to all of the existing Views. As a Cost Calculator customer with a valid support contract, you will continue to receive all enhancements made to your purchased Views. Please visit our website http://www.progressive-edge.com for more information.

About Progressive-Edge

Progressive-Edge, LLC. Has been providing services and alternative solutions to Made2Manage users since 1999. These services include consulting services, custom programming services and applications like the Cost Calculator. Progressive Edge has had the privilege to provide services to over 60 companies using the Made2Manage ERP Software. Cost Calculator is installed in over 30 companies, and growing fast. This truly is becoming a tool which every Customer using Made2Manage can use, and use today.

*Made2Manage and M2M are trademarks of Consona Corporation. Progressive Edge is in no way affiliated with Consona Corporation or Made2Manage ERP.

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