Using Macola ERP, a standard cost based system, is problematic when standard costs for your business are close to non-existent. And this was certainly the case for our client. Making custom machinery with several thousand components involves purchasing on a specific project by project basis with few components held in stock. Ordering in very small or very large quantities has a huge impact on unit price, making it virtually impossible to arrive at an accurate final cost for each machine without resorting to detailed and time consuming manual analysis of variances – generally after the event. With machines costing anything from $100,000 to several million dollars, cost accuracy was vital but, for our client, a distant utopia.
We looked at all the issues and proposed, designed and implemented a streamlined solution to provide near real-time job costing, updated daily, and based on actual costs rather than standards. Quite simply, data is now fed from purchase and work orders into a brand new job costing engine and allocated back to the relevant part of the bill-of-material. The resulting cost data is then integrated into the existing web-based system, resulting in a fully-costed, drill-down, bill-of-materials which shows actual cost variance against estimated and, where supplied, the Macola standard. At a glance, our client can now see where costs are drifting and tackle them at that point, rather than analyse them when it’s too late.
CPM Wolverine Proctor now have the ability to track costs within a previously inconceivable timeframe. The cost data is used by both project managers and finance to track each job while it’s being engineered and manufactured, and other departments (such as sales and estimating) draw on the data from an historical perspective to help them cost and price similar machines with an impressive degree of accuracy.