Discrete Manufacturing SIG Cost Update Challenges

1. Discrete Manufacturing SIG Cost Sub-Committee Cost Update Challenges // Session Planning October 21st, 2008

2. Agenda • Welcome • This Month’s Topic • Topics for Balance of 2008 • Other Issues / Concerns • Conclusion

3. This Month’s Topic: Cost Update Challenges • Normal processes to use • Challenges and common issues • What Do You Do To Work Around This?

4. Normal Processes

5. Item Mass Cost Functionality Apply Latest Activity Rates: Changes item costs after modifying activity rates Change Cost Shrinkage Rates: Modifies the costing shrinkage rates for items. This can be a specific rate or the item’s planning shrinkage rate (shrinkage rates are only applicable to assemblies, not purchase components) Mass Edit Actual Material Costs: Changes the material cost for items based upon purchasing activity. You can update item costs to be an average of or equal to actual accounts payable invoices, open purchase orders, or historical purchase order receipts for a specified date range. Mass Edit Material Costs: Changes the material sub-element by a fixed amount or percentage as appropriate for the basis type. Mass Edit Material Overhead Costs: Changes the material overhead sub-elements by a fixed amount or percentage as appropriate for the basis type.

6. Item Mass Cost Functionality

7. Item Cost Copy Functionality • Release 11i allows you to fold the costs by cost element or keep it separate by cost element • You can specify an currency exchange rate

8. Item Cost Copy Functionality

9. Set Cost Controls In Release 11i there is a mass edit called “Set Cost Controls” which allows you to change the costing controls in mass: • Shrinkage • Lot size • Based on cost rollup

10. Set Cost Controls

11. Standard Cost Update

12. Average Cost Update

13. Cost Update Challenges

14. Large Cost Update Challenges • Manipulation of large amounts of information: • Inputting large amounts of item cost changes • Keeping item material costs consistent with multiple inventory organizations • Lack of multi-org cost copies across organizations • Lack of multi-org cost mass edits • Cost Roll runs one inventory org at a time • Average Cost Update can be submitted via an Open Transaction Interface but the Standard Cost Update cannot. Limits ability to stage custom cost updates for standard costing. • Any other challenges?

15. Large Cost Update Challenges • What did you do to work around these issues?

16. Topics for Balance of 2008/9? Looking for Ideas, Input? • Lean Inventory Accounting? • Actual costing concepts? • International Financial Reporting Standards? • Release 12 topics of interest? • Best uses for Cost Accounting (tell us about things you are doing well)? • Or Problem Area Discussions? • Joint session with Process Cost Sub-Committee? • Problem solving sessions, or things you would like advice on from the group? • Vendors - will discuss with the group if vendor presentations are ok. Examples: • One vendor provides additional accounting entries for intercompany trading transactions (Virtual Trader). • The second one offers Excel reporting capabilities for G/L and other financial information (Excel 4 Apps/GL Wand). • If you have other vendors of interest please speak up.

17. Other News • Collaborate09: Call For Papers due 31st October • Remaining schedule: • 2008 • November 18th • December -- No Meeting • 2009: (any issues with these dates?) • January 20th • February 17th • March 17th • April 21st • May 19th • June 16th • Summer Break

18. Wrap Up

19. Conclusion • This group is what we make it to be. • Lets help each other out and have fun doing it. • Thanks for your participation, tell your friends and associates and grow the network!