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How to handle standard cost for parts that are purchased and manufactured

  • 22 September 2023
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I’m looking for thoughts on how to handle the following scenario:

We have components that we manufacture inhouse, but also outsource.  In house, we do standard production orders against a BOM, which generates our standard cost. But, we also outsource these items.  Currently, we outsource these components 95% of the time.  Because we have BOM for these parts, out standard cost generates whenever we Cost Roll our BOM, but I really need our cost to reflect the PO cost of these items, or a avg of the 2, since we are 95% outsourced.  I’d prefer to keep the BOM active for our flexibility.

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Best answer by jharrisonhome 25 September 2023, 21:00

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Userlevel 7
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@claudematherne24 - have you tried setting the item to Purchased? You could still manufacture the item when needed. 

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Are you referring to Purchased under Planning Settings in the Manufacturing tab of the Stock Item table?  I’ve tried that, but when I Roll Costs for all of my BOMs, it overrides the cost.  The main issue is I have too many BOMs/Components to manually ignore them when rolling costs.

Userlevel 1

Our company has a similar issue.  We have 2 branches, one manufactures and sells to the second. 

As noted, the source (P or M) is not considered on the Master or Site level when performing a Cost Roll/Update Pending sequence.

We modified that process to only update pending when the source is M at the Site level by changing the Update Pending process.  We set the supplying site to M (with a specified BOM) and the purchasing site to P (no BOM).  The manufacturing branch is updated by the update pending,but the purchasing branch is not 

This took a customization to the BOM Cost Roll graph to accomplish this.

 

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