How much will this cost to make? This is a question I am sure comes up on a regular basis for any manufacturer. We have all heard the stories about companies selling products at a loss due to costing errors and whether true or not, it certainly highlights how critical to business success this can be.
A vital process in assessing viability and profitability
When looking at new products it is an absolutely essential part of the process, assessing what the market is willing to pay for a product and how any component, fixed costs, labour, equipment and subcontracted costs incurred through manufacture will stack up. This information enables further analysis of where potential cost reductions can be achieved, what volume production runs are viable and much more. It is not only new products where this insight is invaluable, existing products are continually refined, components changed or updated, production volumes reassessed, being able to easily work out how these changes will impact costs and margins enables decisions to be made with confidence.
New development within the Manufacturing module in the 2014 v9.3 release means a new field is now available called ‘Estimated Revision Cost’. This will provide the estimated cost for the main revision of a manufactured variant (or first by ID if a main revision is not flagged). The estimated cost will be calculated based on:-
- Fixed Costs
- Fixed per Unit Costs
- Labour Costs
- Equipment Costs
- Subcontracted Costs
Account for mutli level sub assemblies
For many companies there can be multiple levels of sub assemblies incorporated into the final manufactured product which can add a further layer of complexity when it comes to calculating the estimated cost of the finished product. For those companies wanting to flatten these sub assembly estimated costs out there is an settings available against a revision to ‘include sub assemblies in estimated cost calculation’. This setting can be applied to revisions to carry estimated costs as far up the manufacturing chain as appropriate.
For more information on OrderWise Manufacturing watch the videos or download our brochure.
To discuss your requirements in more detail contact us today on 01522 704083