Material Costing in VISUAL 8

Hi all,

In 2016 we implemented VISUAL 8 for our manufacturing facility. Our sister company had already been using VISUAL 7, so we "copied" a lot of what they had already done as we implemented our system.

One of these quirks is as follows:

We use sheet metal, so we use the SHT (sheet) unit of measurement) on some of our purchased materials. In engineering masters, we always indicated this by putting a quantity of 1 in the "Qty Per" field. The Dimensions field was where we indicated, for example, that we get 512 pieces out of each sheet, by putting "1/512" in the Dimensions field. This was what our sister company had always done.

Neither us nor the sister company has ever used VISUAL for estimating. Now, we are exploring using VISUAL for estimating and have been doing trial runs. With examples like the one mentioned above, 512 pcs per sheet, VISUAL calculates the Qty Reqd (on the Eng Master card) as 0.10, even though 1/512 is something like 0.00195. (I believe it is set up this way so that we cannot pull less than a tenth of a sheet in production.)

But, when we quote based on the engineering master, it pulls the material cost for 1/10 sheet, which is about 50 times too expensive. This makes logical sense if you're only quoting a quantity of one.

But, as quoted quantities increase, unit price DOES NOT decrease (this is the crux of the problem) - leading to a unit price based on a material cost that is about 50 times too expensive.

My question is, what is the problem here? Do we have something set up incorrectly?

I would greatly appreciate any insight you can offer.

Thanks,

Jarrod

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Comments

mseppanen

I would imagine that if you would go into Part Maintenance and look at the Units of Measure, the Scale of SHT is set at 1. This means that any calculated quantity will only go down to 1 decimal place. Using that logic, I would expect that the behavior you are seeing to occur as it is following the rules you've setup.

Essentially that Scale is doing the following calculation =ROUNDUP(1/512,SCALE), to find the Quantity per.

Option 1:

If you are really wanting more accurate inventory values, you need to increase the scale to, 3 or 4, which will allow a more accurate quantity to be costed for Estimation purposes... this will then flow down to your shop where then that scale is what will tell your shop to pull for individual jobs. Which may work against what you are trying to do with issuing a minimum 1/10 of a sheet.

Option 2 (recommended):

You can stop using the "1/512" in dimensions, and instead calculate the 1/512 = .001953125 and enter that into the Quantity Per. This will still do the roundup, but instead it will be this calculation <b>=ROUNDUP(.00195*QTY,SCALE) </B>, this would allow the dynamic costing you're looking for. The downside of this is that there is no clear communication to the shop floor about expected qty per, but you can fill that into the material specs.

2011-10-27_CH-Stammtisch_2.pdf

unknown

Thanks Mat, this sheds some light on the issue for me.

However, even if we left it as is - since there is a minimum of 1/10 of a sheet, if I quote a quantity of 52, it would cover this minimum, correct? So anything beyond that should show a material cost per unit of .001953125? In other words, logically the material price per unit would begin to decrease as soon as you passed the minimum point.

It appears that VISUAL just takes the unit cost for a quantity of 1, per the engineering master, and multiplies it by the quoted quantity, not factoring in a potentially decreasing unit cost along the way? This is the part that I don't understand.

mseppanen

I misspoke, both methods above yield the same results.

The way you have it structured is that it will increase incrementally in quantities of 0.1 as that is the scale, and it will always round up. So if the calculation for quantity would come up with 0.1000001, it will round up to 0.2; conversely if the quantity required is actually .0000000001, it will round it up to 0.1. This means that your material cost will see very visible steps in costing, especially at low quantities.

The Estimation Window does that calculation for every quantity break on your Estimate line. It is a pretty robust offering for calculating those costs. Do note that if there is a particularly large Quote Master, the processing time could be significant.

If you want to show a true Quantity of 0.00195 per unit on small quantities, then you are going to need to increase your Scale which will then allow the system to use smaller increments.

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