Finished items are received to inventory through the Job Receipts screen.
The status indicators should all be green at final receipt
When shop control processes are correctly performed “just in time” per the guidelines outlined in previous chapters, all the status indicators at the top of the screen should be displayed in green at time of final receipt. This indicates that all sequences are closed, all labor sequences have transactions, all subcontract sequences are fully received, and all components have issue transactions.
▪Issue materials from the Work Center schedule screen in real time when and where the materials are needed
▪Report labor as sequences are completed. Do not attempt to report labor after the job final receipt has occurred.
Red status indicates process failure that needs corrective action
A red status indicator is never permissible against a final receipt and represents a process failure, meaning that an entire process was not performed at all. If this occurs with any frequency, it is a symptom of serious problems in your process workflow that must be addressed and corrected immediately. Sporadic or chronic failure to update transactions on a just in time basis will result in a complete breakdown of the shop control system.
Green is the sign of a properly functioning system
On the other hand, when the status indicators are consistently green at time of final receipt, it means that shop control is functioning properly.
Receive items at a reasonable cost
Besides verifying that status indicators are green, it is also vitally important that the item be received at a reasonable Unit Cost. This is the cost that is used to update the item’s inventory cost, which is the cost that gets applied to subsequent job issues and customer shipments.
Make sure the unit cost is realistic
When you receive a finished item, the program calculates a Suggested Cost and inserts it into the Unit Cost field, which is the cost that will be applied to the receipt transaction. When you make a partial receipt, the Suggested Cost will always be equal to the Est Job Cost directly above it.
When you make a final receipt, the Suggested Cost depends on your Job Cost Defaults system setting.
•If your system is set to the Estimated Job Cost preference, the Suggested Cost will be equal to the Est Job Cost. Any amount in the WIP Balance field will be posted to your WIP Adjustments account.
•If your system is set to the WIP Balancing Unit Cost preference, and all four status indicators are Green in color, the Suggested Cost is a calculated unit cost that balances all receipt costs with actual job costs. In this case the WIP Balance will be zero.
When you use the WIP Balancing Unit Cost preference, always make sure the Suggested Cost is realistic, meaning that it is within acceptable range to the Est Job Cost above it and is not affected by an obvious costing error.
If the Suggested Cost is not realistic, it could be due to an obvious costing error to one of the job inputs, which should be immediately corrected, or the job could have experienced a cost distortion caused by a one-off event such as a machine breakdown or some other unusual factor. In either case, override the suggested Unit Cost with a realistic cost. Any WIP Balance amount will be posted to WIP Adjustments and will be correctly accounted for.
Typical sources of costing errors
When the Suggested Cost is not realistic, here are typical sources of costing errors:
•The status indicators at the top of the screen – Seq Status, Hours Status, Subcon Status, Issues Status – should all be displayed in green. If not, it means that some job processes may not be completed and therefore the cost profile is incomplete. In that case, see that those transactions are made.
•Do not enter labor hours after final receipt. Labor should be reported as routing sequences are completed. Entering labor hours after final receipt can lead to very large costing errors that cannot be addressed easily because in most cases the product has already been shipped and invoiced.
•When the indicators are all displayed in green and the Suggested Cost differs greatly from the Est Job Cost, there is likely one input cost that has a gross error. Most typically this involves a bad labor hours entry, where it is easy to add an extra zero or make a mis-calculation that can grossly distort job labor cost. Review the Job Costs tab within the Job Inquiry screen and look for obvious errors and make appropriate corrections.
Release jobs to production as the final step
If you are in an environment where subassembly jobs are often immediately issued to higher level jobs, after job receipts are updated go immediately to the Job Control Panel screen and release jobs that are now eligible for release. Any jobs with current planned start dates that were waiting for newly received subassembly items can now be released.
