The item types are customer defined but must be connected to a reference item type. The reference item type determines how a sub-item influences the work scope. One of the existing reference item types is Product. It generates a product item within the tree structure for all customer defined item types connected when used. This is the foundation for the part of the estimate bid management designate as product estimate management.
If an item header is created with an item type connected to the reference item type Product then is automatically a record created in the Product tab. This imply that a part of the estimate is represented of costs related to products, Product Estimate Management. It is in the Product- and Details tab that relevant part data such as Part No, Part Description, Part Type, Quantity Required, Unit of Measure etc. are defined for the product item included in the estimate.
The following product specific icons exists for the tree structure;
| Icons | DescriptionProduct |
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Existing Manufacturing Part |
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Existing Purchased or Purchase (Raw) Part |
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New Manufacturing Part |
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New Purchased or Purchase (Raw) Part |
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Open Request for Order Quotation Exists |
Component records for a product item can be added in the Components tab. It contains both component and cost related information for a product item in the tree structure. It gives an overview of the cost for the components founding the item. A line appears in this tab automatically when a new item header record is created (manually or by copying a product structure), one line for each component connected to the item.
The option to create new records also exists to facilitate add of components below an item in the tree structure. The parameter Estimate Structure determine whether the component record shall appear as an item in the tree structure or not, there are two options Enable and Disable. For Manufactured parts is it always set to Enable but for Purchased parts is it possible to select. If Enable is selected then the part will appear as an item in the tree structure with the option to create structure levels below.
If the part type is set to Manufacturing then is structure- and routing revision fetched based on the required date defined for the item, if a buildable revision exist. If it contains sub-items in its turn then these will always be based on the first valid alternate in the sequence, copy of a structure works in the same way. Components and operations are generated for a manufacturing part based on the selected structure revision/alternate when saving the record. By-products are not handled in estimates and are excluded during estimate structure generation/creation.
If the part type is set to Purchased then is structure revision fetched based on the required date defined for the item if the Estimate Structure is set to Enable, if a buildable revision exist. If it is set to Disable then no structure revision is fetched since possible structure levels below aren’t taken into consideration.
It is possible to set a factor used to calculate the adjusted value after scrapping for the item, taking into consideration such conditions as damage control, and poor quality. The scrap factor can be manually entered and it is expressed as a percentage 0-100 while 0 means no scrapping required.
A fixed quantity of the component part that is scrapped once per order is possible to define. This is a setup quantity for material. The value determines how the scrap for the material is planned when adding a component line to an item in the tree structure.
The scrap factor can also be defined for a component as a percentage, indicating how much of the component part is scrapped per unit of the parent part. The value determines how the scrap for the material is planned when adding a material line to an item in the tree structure.
A product structure and/or routing can be set up as lot sized based if different alternates should be used depending on the lot size that needs to be produced. If such setup is defined for the product to be used within an estimate, it can create a conflict scenario. A conflict can arise since the top item quantity is version handled but the work scope is common for the versions, i.e. no option to differentiate the included components and/or operations between the versions. If a part is defined with a lot size based product structure and/or routing then is the alternate selected based on the required quantity for the selected version. This means that it is possible that the list of components and/or operations, which are a part of the common work scope, are just correct for the selected version, maybe not other existing or future versions. If it is a requirement to always work with the correct alternates for lot sized based product structure and/or routing then there are two options;
If a product is added to the estimate with a lot size based product structure and/or routing then is the suggested default revision and alternate influenced both by the required date and the required quantity, revision is selected based on the required date and alternate is selected based on required quantity. If a Buildable alternate exists which correspond to the required quantity then as default option that alternate is suggested. If just a Tentative alternate exists which correspond to the required quantity then it is up to the user to select an alternate in order to save the item record.
When using the copy structure the behavior is identical to add of product item with one exception;
Operations for a product item with part type Manufactured can be defined in the Operations tab. This tab handles both operation parameters as well as the predicted costs related to the execution of the operation. In this tab is it possible to create new operations records for a product item. The level cost is calculated when saving an operation record, based on the selected work center, labor classes and the operation parameters given for the operation.
An operation is always founded on existing work centers and labor classes. If
a cost set has been used to apply costs for a copied product structure and
routing then is the level cost for a new operation calculated immediately. It is
calculated based on the operation parameters and the costs defined for the
corresponding work center and labor classes cost set record.
If no cost set
is applied at all then is the cost for an operation, new as existing, calculated
simultaneously as the cost calculation is executed. The operation cost is then
calculated on the base of the Cost Set 1 record defined for
included work center and labor classes.
It is possible to select or update a supplier for a new or existing component record or outside operation as long as the parent item isn’t in Confirmed status. When a supplier is defined then is the price retrieved according to the existing price hierarchy. The price is for components presented as the unit price, but for outside operations as the total cost for the operation considering the required quantity. For components is the supplier price used to calculate the direct material cost per unit and the total material cost which considers the required quantity. The supplier price is always presented in the supplier currency while costs are presented in the estimate currency. The handling of different currencies and conversion between them is performed according the currency handling hierarchy.
If there is a need of manually updating the direct material cost per unit then this is done by updating the supplier price. If a supplier is defined for the item record, the direct material cost per unit is locked for direct editing. If no supplier is connected then it is enabled for the direct update. For outside operations is it just possible to update the supplier price. If the supplier price is updated then the material- or the operation cost automatically recalculated. To be noticed, it is necessary to select Price Manually Set check box. This check box indicates that a manual update has been performed of the supplier price for components with the implication that the calculated total cost no longer based on the original price retrieved for the supplier.
Supplier is version handled for the standard purchased components which means that it is possible to define diverse suppliers with unequal prices for different versions of the estimate. Option to select diverse suppliers for the versions is a way to differentiate the cost for components and outside operations for the same estimate. There is one exception, inter-site handled components. Components which are inter-site supplied, not possible to update the supplier for. It is allowed since an update of supplier implies a work scope change. Work scope changes cannot be handled by creating versions of the estimate. Version handling is a way to differentiate the cost build-up for the same work scope. If it is a requirement to handle the work scope changes then a new revision of the estimate must be established. Hence is it not possible for an existing inter-site supplied record to change from one internal supplier to another or from an internal supplier to an external. If it is required to update supplier then the record must be deleted so that a new component record with the prerequisite supplier can be added. This is necessary since the work scope must be the same for all versions.
Supplier is version handled for standard purchased components. Which means that it is possible to define diverse suppliers with unequal prices for different versions of the estimate. The option to select diverse suppliers for the versions is a way to differentiate the cost for components and outside operations for the same estimate. It is possible to set/update a supplier for a version as long as the parent item isn’t in Confirmed status.
Components which are inter-site supplied are possible to handle in two ways. Consider it as a multi-site planned part or as a standard purchased components. There is a setting, Multi-site Planned Part, which indicates that the part is multi-site planned. It defines the connections between the internal sites and the establishing of a multi-site part structure. This setting is available only if an internal supplier is connected to the purchase parts and it can only be updated before save of the record. When selected the build-up of cost- and markup will be accumulated when performing a calculation. The accumulated variable cost for supply site items of the estimate structure will be equal to the direct material cost for the inter-site purchased item at the demand site. It is it not possible to update the supplier for an inter-site purchased item with the Multi-site Planned Part setting selected. It is allowed since an update of supplier implies a work scope change. Work scope changes cannot be handled by creating versions of the estimate. Version handling is a way to differentiate the cost build-up for the same work scope. If it is a requirement to handle work scope changes then a new revision of the estimate must be established. Hence is it not possible for an existing inter-site supplied record to change from one internal supplier to another or from an internal supplier to an external. If it is required to update the supplier, then the record must be deleted so that a new component record with the prerequisite supplier can be added. This is necessary since the work scope must be the same for all versions.
If the Multi-site Planned Part setting is unselected before the record is saved, then the inter-site supplied part is handled as a standard purchased part, i.e. no consideration is taken to a possible structure at the supply site, instead it is the supplier price fetched upon save and included when executing a calculation. Inter-site supplied part in this scenario considered as a standard purchased part with the option to select diverse suppliers for the versions.
For item types connected to the reference item type Product it is possible to include configurable parts both as top items and as components for a standard part.
If a configurable part is defined as a top item then there are two options to create the configuration;
When the configuration is created based on the configuration id, then the items generated in the tree structure, each item that represents a configurable part defined with the relevant configuration id. It is possible to update the configuration at any level. Component type for the item is then changed from Existing to Modified but the connection to the configuration id remains. Each configuration within the estimate is considered as a separated item which means that they can be updated independent of each other. No consideration is taken to possible sales rules. This is fine since all configurable parts must be given a new part number in order to perform a part transfer. A new part number is necessary since it is prohibited to have configurable items at any level in a standard part. It is neither supported to transfer a configurable part since configuration and sales rules cannot be handled within the estimate.
Connection to the configuration id facilitates the possibility to go back to the starting point and edit the configuration. If edit the configuration then are all updates in terms of components and operations removed and the structure is re-generated based on the configuration id.
In the Copy Structure and Apply Cost dialog box it is possible to select a part number representing a configurable part together with a configuration id, this to retrieve a configuration in Completed status. Components and operations related to the configuration is copied to the selected item.
For a configurable part is always a make to order scenario considered, a possible part cost calculation is never applied on the copied configuration.
If the inventory valuation method is set to standard cost and the inventory part cost level is set to cost per configuration then is it a requirement to base the estimate structure cost on the cost for the specific components and the operations included in the configuration id. This means that the cost cannot be fetched from a part cost calculation since it is a requirement to have the particular cost for the given configuration id, not the average which is represented of the cost set calculations based on the component usage factor and operation usage factor. If selecting the option Apply Cost then is the define cost set only used to calculate the operation cost. Purchase prices for components are fetched for the defined supplier according the existing price hierarchy independent of the defined cost set.
It is necessary to update all parts numbers for items in the tree structure representing configurable parts to be able to perform a transfer products. This is a requirement since the tree structure now represent structure for a standard part, a part cannot be both standard and configurable at the same time.
Fields to handle cost contingency concerning component-, labor- and work center cost exists in the following places;
Cost contingency is an option to add on a value to a cost which in its nature can be considered as uncertain. There are two options to define Cost Contingency; either as a percentage or as a fixed value and both positive and negative values can be used. It shall be considered as a help to cover for unexpected cost fluctuations that could impact the estimate result in a negative way.
It is not possible to add on any cost contingency to the additional cost, these cost are just included in the cost calculation so that they are a part of the total estimated price. An additional cost is a cost that the company must pay for independent of sales or not. Since they are reoccurring costs are they most probably stable and hence can the cost contingency be considered as low, i.e. the need of handling it is negligible.
When performing the calculation then is the cost contingency value accumulated upstream in the tree structure in order to get a final total cost for the estimated top items. This implies that the total level cost for an item is build-up based on cost contingency defined for its sub-items. cost contingency added on objects connected to the items within the tree structure are accumulated upstream, since cost contingency can be defined on lowest level.
Estimate product cost calculation is done based on fixed set of cost types. Namely Machine, Labor, Material, Subcontracting, Machine Overhead 1 , Machine Overhead 2, Labor Overhead, Material Overhead, Delivery Overhead, Subcontracting Overhead, General Overhead and Additional Costs.
Project cost elements are used to group estimate costs further. Estimate cost type and project cost element connection is done in Estimate Cost Type Connections window. For example, if you connect Labor Cost as the project cost element for both Labor and Labor Overhead estimate cost types, in the estimate cost calculation output both labor and labor overheads costs will be grouped as Labor Cost.
It is possible to add material, delivery and general overheads in the estimate. General overheads are added on total cost of the manufactured parts. Both delivery overheads and material overheads are added on direct material cost of the purchase parts. Delivery overheads are added as level costs of purchase parts while material overheads are added as level costs of manufactured parts where the purchase items are consumed.
If the standard lot size is zero for a part an order cost calculation is performed. Operation setup times are considered only once for the total required quantity and batch overheads are added only once for the total required quantity. If the standard lot size is greater than zero, unit cost calculation is performed for the part and the value is then multiplied by the required quantity to get the total cost.
Costs inherited from part cost also get assigned to project cost elements based on cost bucket cost type. For parts with standard lot size unit cost from part cost is directly used and multiplied by the required quantity to get the total cost. For parts with standard lot size, cost are recalculated based on part cost cost set.
Work center and labor class costs are retrieved from manufacturing based on the required date of the item. Currency conversions rates are instead retrieved based on the version valid from- and valid to date.
A new opportunity or sales quotation can be created for all versions in Confirmed status. The opportunity- or quotation lines created is pegged to the corresponding deliverable lines. An opportunity line created based on a deliverable line is always set to status Unconfirmed and a sales quotation line is always set to status Planned.
For a deliverable line representing existing part numbers then a possible primary sales part suggested as the default value, but it is possible to use the list of value to select a different one if required. If no primary sales part exists then shall can the user type or use the list of value to select a sales part number.
If the intension is to create a sales quotation then is it a condition to define a sales part for the deliverable line to proceed, this since sales quotation cannot handle non-existing parts which is business opportunity can. This means that if the deliverable line represents an existing part then a sales part must be defined, if it instead represents a non-existing part then a sales part with sales part type Inventory Part must be established. This with the consequence that the component type for the corresponding top item is updated to Modified; i.e. an existing part but with a modified structure. This since an inventory part is crated for the top item when the sales part is established.
If no sales part exists or if it is left blank, also remove of the primary sales part, then the way forward is to create a business opportunity with a line created as non-existing part. It is of course possible to create a business opportunity if a sales part is defined for the deliverable line.
When an estimate is created based on existing business opportunity- or sales quotation lines by using the New Estimate Assistant then are the deliverable lines established at creation of the estimate, with connections to the corresponding opportunity lines. This means that the connection is already there before the estimate process has even started, it is just a matter of updating the connected lines when the default version is Confirmed.
If new top items are added to an estimate which is created on the base of existing business opportunity- or sales quotation lines then are these also included by a succeeding update, i.e. new records are established for the same Business Opportunity Revision or Sales Quotation as original used for creation of the estimate. This means that cost- and price values are updated for the lines with a connection since previous. For top items added after creation of the estimate are new opportunity- or quotation lines established based on the Confirmed calculation.
A new Sales Quotation is established if the site diverse for the new deliverable line, representing the added top item, compared with the original lines.