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Epicor ERP

Methods of Manufacturing
Course
10.0.700.2

Disclaimer
This document is for informational purposes only and is subject to change without notice. This document and its
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Methods of Manufacturing Course

Contents

Contents
Methods of Manufacturing Course.......................................................................................4
Before You Begin....................................................................................................................5
Audience.........................................................................................................................................................5
Prerequisites....................................................................................................................................................5
Environment Setup..........................................................................................................................................5

Overview.................................................................................................................................7
Maintenance Programs..........................................................................................................8
Method Components..............................................................................................................9
Bill of Material (BOM) Elements........................................................................................................................9
Bill of Operations (BOO) Elements..................................................................................................................10

Define a Product...................................................................................................................12
Workshop - Create a Part...............................................................................................................................12
Create a Part Revision.............................................................................................................................12

Create a Method of Manufacturing....................................................................................13


Workshop - Create a Method of Manufacturing............................................................................................13
Check Out Revision.................................................................................................................................13
Add Operations......................................................................................................................................13
Add Material..........................................................................................................................................14
Approve and Check In Revision...............................................................................................................14

Integration and Flow............................................................................................................15


Workshop - Copy a Method Of Manufacturing..............................................................................................16
Create a Part..........................................................................................................................................16
Create a Revision....................................................................................................................................16
Check Out Revision.................................................................................................................................16
Copy a Method of Manufacturing..........................................................................................................17

Method Descriptors..............................................................................................................18
Scheduling Impact................................................................................................................19
Costing Impact......................................................................................................................20
Conclusion.............................................................................................................................22

Epicor ERP | 10.0.700.2

Methods of Manufacturing Course

Methods of Manufacturing Course

Methods of Manufacturing Course


This course defines the role of a method of manufacturing (MOM), its composition, and the impact it has on
scheduling and costing outputs.
The MOM defines how to build a part or an assembly. It has two components, the bill of material (BOM) and the
bill of operation (BOO). These components are discussed in depth to better understand the impact each has on
production, scheduling, and job costing.
Upon successful completion of this course, you will be able to:
Define a method of manufacturing and describe its purpose.
Describe components of a method.
Identify the elements associated with each component.
Illustrate how the method impacts scheduling and costing output.

Epicor ERP | 10.0.700.2

Methods of Manufacturing Course

Before You Begin

Before You Begin


Read this topic for information you should know in order to successfully complete this course.

Audience
Specific audiences will benefit from this course.
Cost Accountants/CFO
Engineers
Schedulers
Shop Floor Managers
Production Managers

Prerequisites
To complete the workshops in this course, the necessary modules must be licensed and operating in your training
environment. For more information on the modules available, contact your Epicor Customer Account Manager
at EpicorCAM@epicor.com. It is also important you understand the prerequisite knowledge contained in other
valuable courses.
Navigation Course - This course introduces navigational aspects of the Epicor application's user interface.
Designed for a hands-on environment, general navigation principles and techniques available in two user
interface modes - Classic Menu and Modern Shell Menu. Workshops focus on each of these modes and
guide you through each navigational principle introduced.
Parts Course - This course introduces the building blocks that make up Part Maintenance. It focuses on the
importance of Part Maintenance, required maintenance program setup, key fields, manufactured and purchased
part setup, and commonly used reports and trackers.
Manufacturing Foundations Course -The Manufacturing Foundations course introduces you to the principal
building blocks in establishing a strong manufacturing environment. This course discusses the necessary
prerequisites involved with efficient production floor configuration.

Environment Setup
The environment setup steps and potential workshop constraints must be reviewed in order to successfully
complete the workshops in this course.
Your Epicor training environment, in which the Epicor demonstration database is found, enables you to experience
Epicor functionality in action but does not affect data in your live, production environment.
The following steps must be taken to successfully complete the workshops in this course.

Epicor ERP | 10.0.700.2

Before You Begin

1.

Methods of Manufacturing Course

Verify the following or ask your system administrator to verify for you:
Your Epicor training icon (or web address if you are using Epicor Web Access) points to your
Epicor training environment with the Epicor demonstration database installed. Do not complete
the course workshops in your live, production environment.
Note It is recommended that multiple Epicor demonstration databases are installed. Contact
Support or Systems Consulting for billable assistance.
The Epicor demonstration database is at the same service pack and patch as the Epicor
application. Epicor's education team updates the Epicor demonstration database for each service pack
and patch. If your system administrator upgrades your Epicor application to a new service pack or patch,
he or she must also download the corresponding Epicor demonstration database from EPICweb > Support
> Epicor > Downloads and install it. If this is not performed, unexpected results can occur when completing
the course workshops.
Your system administrator restored (refreshed) the Epicor demonstration database prior to
starting this course. The Epicor demonstration database comes standard with parts, customers, sales
orders, and so on, already defined. If the Epicor demonstration database is shared with multiple users
(that is, the database is located on a server and users access the same data, much like your live, production
environment) and is not periodically refreshed, unexpected results can occur. For example, if a course
workshop requires you to ship a sales order that came standard in the Epicor demonstration database,
but a different user already completed this workshop and the Epicor demonstration database was not
restored (refreshed), then you will not be able to ship the sales order. Epicor's education team has written
the course workshops to minimize situations like this from occurring, but Epicor cannot prevent users
from manipulating the data in your installation of the Epicor demonstration database.

2.

Log in to the training environment using the credentials manager/manager. If you are logged into your
training environment as a different user, from the Options menu, select Change User.

3.

From the Main menu, select the company Epicor Education (EPIC06).

4.

From the Main menu, select the Main Site.

Epicor ERP | 10.0.700.2

Methods of Manufacturing Course

Overview

Overview
A method of manufacturing (MOM) is the process through which a part is produced. Each method is made up
of two components: a bill of operations (BOO), or routing, and a bill of materials (BOM).
The BOO defines the various tasks that need to be run in order to manufacture the part. The BOM specifies the
materials required to complete the part.
The scheduling engine uses these items to determine how long it takes to produce a job. The material requirement
engine calls the scheduling engine to get this information for the Start Date and End Date on unfirm jobs and
purchase suggestions. The material requirement engine reviews each level on the BOO and checks the first
assembly (0) to evaluate the demand requirements for the operations contained on this level. Then it moves to
the next assembly, evaluates the demand requirements, then moves again, and so on, until the demand
requirements in the BOO are completely evaluated. Each operation has an amount of Lead Time it requires in
order to run from start to finish; this value is used by the scheduling engine to determine the Start Date for each
operation.
It is important to have a solid method of manufacturing designed for each part that is processed through the
MRP engine. This ensures that your job, transfer order, and purchase suggestions achieve accurate results.
Business Scenario
The example business scenario is a typical manufacturing company which designs and manufactures different
types of frame rails. Each new frame rail is entered into the company's database with its method of manufacturing
(MOM). Some of the frame rails types can use the same MOM, so once a new item is entered, the MOM is copied
rather then created again.
The method of manufacturing functionality is accessed through the following locations:
Opportunity/Quote Entry - Use Opportunity/Quote Entry to define a method of manufacturing for a part.
The method of manufacturing for a part is useful for designing the quote and the methods can be defined
as templates. Methods can be used later by the jobs to produce the parts defined on the original quotes.
Engineering Workbench - Use the Engineering Workbench to create methods of manufacturing for part
revisions. The methods can be defined as templates. Methods can be used later by the jobs to produce the
parts engineered through this tool.
Job Entry - The method defined on each job record is used to produce the parts. The MRP engine uses the
method to calculate the Start Date and End Date values for each operation and ultimately the entire job. The
materials needed to produce the parts are determined by the method defined for the part.
Get Details - Use the Get Details function to pull a method of manufacturing template into a job, a quote,
or a part record. You can use the method on these records or make further modifications as needed. You
launch this program from the Actions menus within Opportunity/Quote Entry, Job Entry, and the Engineering
Workbench.

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Maintenance Programs

Methods of Manufacturing Course

Maintenance Programs
The method of manufacturing (MOM) components build on two key maintenance programs, Part Maintenance
and Operation Maintenance.
Part Maintenance
Use Part Maintenance to enter or update part information. Parts are either purchased items you use for raw
materials or subassemblies or manufactured items you use to fill sales orders.
Each part record contains crucial data you may need for purchase or production needs. A part record contains
general information such as part number, description, and search criteria, and part record defines inventory
information, which includes unit of measure (UOM) options for sales, purchases, inventory, non-stock classifications,
serial number tracking, and weight values. You also define warehouse and bin information for each part, including
Minimum, Maximum, and Safety Stock quantities. If this part is included in a sales kit, define these parameters
as well.
When you set up a part, the sites within the company can access the part and use it on jobs. You can also select
parts as materials on quote, job, or part methods of manufacturing. If you use the Engineering module, each
purchased or manufactured part on a bill of material must have a record set up in Part Maintenance.
For additional information, refer to the Parts course.
Operation Maintenance
Use Operation Maintenance to enter procedures that shop employees must perform when working on a job.
An operation defines the sequence of labor step sequence required to create a part. Operations can be inside
operations or subcontract operations. Inside operations track the hours and cost for the planned and actual labor
performed. Subcontract operations track the movement of parts and cost associated with outside services.
For additional information, refer to the Manufacturing Foundations course.

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Methods of Manufacturing Course

Method Components

Method Components
The Bill of Material (BOM) is combined with the Bill of Operation (BOO) to create a method of manufacturing
(MOM).
The BOM is the list of parts associated with a part. The BOM includes purchased parts (materials you buy) and
manufactured parts (materials you manufacture).
The BOO is the list of operations associated with a part. Operation information is entered in the Engineering
Workbench.

Bill of Material (BOM) Elements


Required Elements
Sequence
Each item on a Bill of Material (BOM) list is uniquely identified with a sequence number. The sequence number
is assigned by the Epicor application in multiples of 10.
Part
The Engineering module requires that parts on a BOM are entered first in Part Maintenance. Assign materials by
pulling in the Part details using the Add Material feature in the Engineering Workbench.
Quantity
Each BOM item must identify item quantity required to make one parent item.
Recommended Elements
Cost
This is an estimated cost per unit of the material. If this part exists in Part Maintenance, the unit cost defaults
from the Part Cost record or the Supplier Price Break file.
Note A BOM item's unit cost is stored in the method when it exists on a quote or a job.
The unit cost is not stored in the method in the Engineering Workbench. The Engineering Workbench uses
the unit cost and the costing method stored in the Part Maintenance file and displays when the view costs
option is selected or pulled into a quote or job.
As a result, the method file, stored in the Engineering Workbench, is more effective and realistic as it always
uses current costs. Costs update each time the Get Details function uses the stored method.
The formula Material Cost = Estimated Unit Cost X Quantity Required is used by the Epicor application to
calculate material costs of a job.
Related Operation
You can associate materials to a related operation if the material is required at a certain point in the manufacturing
process. Once this relationship is established in the method, it is carried through to calculate the material required
date when you schedule a job generated from these manufacturing details.
Note Related operations are critical if inventory is to be relieved through backflushing. The Epicor application
only backflushes material that is related to an operation.

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Method Components

Methods of Manufacturing Course

Comments
A BOM item can have two different types of comment, purchasing and manufacturing. Each comment type
is used to provide specific information to other programs and is printed on reports or forms.
Purchasing comments display for material requirements during job and quote entry and are available in Purchase
Order Entry to print on purchase orders. Manufacturing comments display when you enter this part as a material
requirement for a BOM.
Note Existing comments for a part display. You can override or ignore the comments that default from
Part Maintenance. You can also enter additional comments.

Bill of Operations (BOO) Elements


This section describes the bill of operation (BOO) elements. These elements are broken into two categories required and recommended.
Required Elements
Sequence
The operation sequence number uniquely identifies each operation step on an assembly. The sequence number
indicates the order in which you should perform the operations. The order is important for scheduling purposes.
Default operation sequence numbers are application generated in increments of 10. This allows you to insert
new operations in between existing operations.
Operation
Job operations, or operation sequences, define the labor step sequence required to produce each part.
Operations are either inside operations or subcontract operations. Inside operations track the hours and cost for
the planned and actual labor performed. Subcontract operations track the movement of parts and cost associated
with outside services.
Resource
A resource is a piece of equipment or an employee required to manufacture a part. A resource must belong to
a resource group.
Quantity
Each operation sequence must identify the quantity required to produce one parent item.
Recommended Elements
Standard
This is the estimated setup and production time for an operation. Use standard time to calculate the total estimated
amount of hours required to setup and produce parts for an operation.
The time for a subcontract operation is estimated as the number of days a part should be out of the site.
Rates
This is the rate or charge associated with employees, machines, or services required to produce a part through
each operation. Rates help calculate the final estimated cost of an operation.
Burden - This is the overhead rate or the cost associated with running a resource.
Labor - This is the rate per hour at which you allocate labor expenses to each operation.

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Methods of Manufacturing Course

Method Components

Subcontracting - A subcontracting operation is a job step completed by another supplier.


Comments
Each operation sequence includes provisions for internal comments.
Comments on an inside operation provide specific information for other programs and are printed on reports
and forms.
Comments on a subcontract operation are similar to purchasing comments for a material requirement. They
display during Job Entry and Quote Entry and are available in Purchase Order Entry to print on purchase orders.

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Define a Product

Methods of Manufacturing Course

Define a Product
This section of the course introduces the steps necessary to create a new product, including Part Maintenance
file definition.

Workshop - Create a Part


Your company has designed and approved a new frame rail product wich is going to be manufactured in you
local manufacturing site. As this is a new product you need to create a master part record and define certain
criterias for this item. In this workshop, enter the frame rail part into the application.
Navigate to Part Maintenance.
Menu Path: Production Management > Job Management > Setup > Part
1. From the New menu, select New Part.
2. In the Part field, enter DCD-XXX (where XXX are your initials).
3. In the Description field, enter XXX Frame Rail Metal (where XXX are your initials).
4. In the Type field, select Manufactured.
5. In the Sales Unit Price field, enter 20.
6. In the Group field, select Fabricated.
7. In the Class field, select FG-Fabricated.
8. Select the Non-Stock Item check box.
9. Click Save.

Create a Part Revision


1. Navigate to the Part > Revisions > Detail sheet.
2. From the New menu, select New Part Revision.
3. In the Rev field, enter A.
4. In the Effective field, accept today's date as the default.
5. In the Description field, enter XXX Initial Release (where XXX are you initials).
6. Click Save.
7. Remain in Part Maintenance.

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Methods of Manufacturing Course

Create a Method of Manufacturing

Create a Method of Manufacturing


Method of manufacturing (MOM) in the Engineering Workbench lists the information required to build a part.
The method includes the purchased and manufactured parts necessary, as well as the sequence of steps required
to build the final product.

Workshop - Create a Method of Manufacturing


The new master part record for the frame rail part has been created so now you need to create a method of
manufacturing for this product, the bill of operation (BOO) and the bill of material (BOM). When a method is
being created or maintained, it must be checked out to an ECO Group. Therefore, you first need to establish an
ECO group which groups part revisions together under the same heading (ECO Group ID). In this workshop, add
a plating operation and material required to manufacture this product.

Check Out Revision


1. From the Actions menu, select Revision > Check Out Revision.
The Part Revision Checkout window displays.
2. Click the New ECO button.
The ECO Group Maintenance window displays.
3. In the Group ID field, enter DCDXXX (where XXX are your initials).
4. In the Description field, enter XXX Initial Design (where XXX are your initials).
5. In the Effective Date field, select today's date.
6. Click OK.
7. In the Part Revision Checkout window, click OK.

Add Operations
1. From the Actions menu, select Revision > Engineering Workbench.
The Engineering Workbench displays.
2. Navigate to the Method of Manufacturing > Operations > Detail sheet.
3. From the Actions menu, select Operation > Add Operation.
4. In the Operation field, select Shear.
5. In the Prod Std field, enter 1 and select Minutes/Piece.
6. Click Save.

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13

Create a Method of Manufacturing

Methods of Manufacturing Course

7. Navigate to the Method of Manufacturing > Operations > Scheduling Resources > Detail sheet.
8. In the Resource Group field, verify Machining Work Force defaults.
9. Navigate to the Method of Manufacturing > Operations > Detail sheet.
10. From the Actions menu, select Operation > Add Operation.
11. In the Operation field, select Outside Vendor Plating.
12. Click Save.

Add Material
1. Navigate to the Method of Manufacturing > Materials > Detail sheet.
2. From the Actions menu, select Material > Add Material.
3. In the Part field, enter SS-125 and press Tab.
4. In the Operation field, select 10.
5. In the Qty/Parent field, enter 1.
6. Click Save.

Approve and Check In Revision


1. Navigate to the Revision > Detail sheet.
2. Select the Not Approved check box.
The revision status changes to Approved.
3. From the Actions menu, select Revision > Check In.
The Description of Change window displays.
4. Click OK.
5. To the Check In Complete message, click OK.
6. Exit the Engineering Workbench.
7. Remain in Part Maintenance.

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Methods of Manufacturing Course

Integration and Flow

Integration and Flow


You can store a method in several places in the Epicor application.
Integration
Use the Get Details function to link a part to an existing method, a similar part, a similar job, or a quote. You
can engineer directly inside a quote or a job. The method file is a holding place and interacts with three modules:
Quote Management
Job Management
Engineering
A method created using the Engineering Workbench is stored in the method file and you can modify it as needed.
If a method is engineered inside a quote or a job, the details are only accessible by linking to the specific quote
or job.
Flow
The method flowchart below demonstrates how the Epicor application manages the method information exchange.

Bill of Material (BOM) and Bill of Operation (BOO) information is usually entered in the Engineering Workbench.
If the Engineering module is not licensed, a quote or job template can be used to store a method's information.
The Epicor application allows you to pull a method into a job or quote. Modifications are made specific to the
job or quote, then optionally saved back to the Engineering module. The method's file can also be used to store
a template from which other methods can be created for similar parts. This approach is especially useful for
manufacturers with a constant routine.
The red arrow in the flowchart indicates that a job template can be pulled into the quote using the Get Details
function. It may not be convenient to copy a method from a job back to the quote if you have to alter the data
stored in the quote that represents the pricing structure for this opportunity.

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Integration and Flow

Methods of Manufacturing Course

Workshop - Copy a Method Of Manufacturing


Your company has designed and approved another new frame rail product wich is also going to be manufactured
in you local manufacturing site. As this frame rail is very similar to the previous one the production manager has
decided to use the same method of manufacturing (MOM) to make this product. In this workshop, create a new
master part record for the frame rail part and reuse the MOM created in the Workshop - Create a Method of
Manufacturing.

Create a Part
1. From the New menu, select New Part.
2. In the Part field, enter DCD-XXXX (where XXXX are the last four digits of your mobile phone).
3. In the Description field, enter Frame Rail Metal.
4. In the Type field, select Manufactured.
5. In the Sales Unit Price Field, enter 20.
6. In the Group field, select Fabricated.
7. In the Class field, select FG-Fabricated.
8. Select the Non-Stock Item check box.
9. Click Save.

Create a Revision
1. Navigate to the Part > Revisions > Detail sheet.
2. From the New menu, select New Part Revision.
3. In the Rev field, enter A.
4. In the Effective field, accept the today's date default.
5. In the Description field, enter XXXX Initial Release (where XXXX are the last four digits of your mobile
phone).
6. Click Save.
7. Remain in Part Maintenance.

Check Out Revision


1. From the Actions menu, select Revision > Check Out Revision.
The Part Revision Checkout window displays.

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Methods of Manufacturing Course

Integration and Flow

2. In the ECO field, enter DCDXXX (where XXX are your initials) and press Tab.
3. Click OK.

Copy a Method of Manufacturing


1. From the Actions menu, select Revision > Engineering Workbench.
The Engineering Workbench displays.
2. Navigate to the Method of Manufacturing > Engineering > Parts sheet.
3. From the Actions menu, select Revision > Get Details > Get From Methods/Jobs/Quotes.
The Get Details window displays.
4. In the Part field, enter DCD-XXX (where XXX are your initials) and press Tab.
5. In the Revisions grid, select revision A and click OK.
6. In the tree view, right click Rev: A Part DCD-XXXX (where XXXX are the last four digits of your mobile
phone) and select Tree > Expand Tree.
7. Review the copied method of manufacturing.
8. Navigate to the Revision > Detail sheet and select the Not Approved check box.
The revision status changes to Approved.
9. From the Actions menu, select Revision > Check In.
The Description of Change window displays.
10. Click OK.
11. To the Check In Complete message, click OK.
12. Exit the Engineering Workbench.
13. Exit Part Maintenance.

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Method Descriptors

Methods of Manufacturing Course

Method Descriptors
This section of the course reviews the descriptors that are important when you establish an identity for a method.
The following table highlights the descriptors available in each of the three areas where a method can exist. The
last three columns indicate if the descriptor is required or optional by module.
Field Name

Quote Module

Engineering Module

Job Module

Part Number

Required

Required

Required

Part Description

Required

Required

Required

Revision

Optional

Required

Optional

Effective Date

N/A

Required

N/A

Drawing

Optional

Optional

Optional

ECO Reference

N/A

Optional

N/A

Status

Required

Required

Required

Part Number/Description
A part number and description must be present when you create an identity for a method. A method is stored
by unique part number when it resides in either a quote or a job.
Revision/Effective Date
Methods stored in the Engineering Workbench must include a revision identifier with an associated effectivity
date as part of its identity. In this case, the method is stored in the database first by the part number and description
and then by the revision identifier for that part. A single part can contain multiple revisions with each revision
containing its own method.
Note The effective date indicator is only available for methods stored in the Engineering module.

Drawing/ECO Reference
These are optional characteristics that typically include additional engineering data such as a drawing or a change
order reference.
Note The ECO reference indicator is only available for methods stored in the Engineering module.

Status
Methods stored in either a quote or a job are automatically approved when the method (for example, the quote
line or the job header) maintains an engineered status.
Methods stored in the Engineering Workbench go through a formal approval process that is tied to security
privileges.

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Methods of Manufacturing Course

Scheduling Impact

Scheduling Impact
Method elements control the outcome of two important areas within the Epicor application, scheduling and
costing. This section of the course examines how the method impacts scheduling.
There are two components of scheduling, capacity and load. You must configure and implement both components
before the Epicor application can conduct a scheduling activity. The method interacts with the load component.
Load is defined as the amount of planned work scheduled for a resource for a specific span of time.

Scheduling Resource
This includes the elements required to perform an operation on a production step.
Time
For an inside operation, time is the estimated time for setup and production for an inside operation. For a
subcontract operation, time is the estimated number of calendar days out.

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Costing Impact

Methods of Manufacturing Course

Costing Impact
This section of the course examines how the method impacts costing.
The Epicor application supports five cost categories.
Labor
Burden
Material
Subcontract
Material Burden
Material
This is the material cost required to make each part you produce. Material calculations are as follows:
Part Master Item Material Cost = Required Quantity X Inventory Unit Cost
Purchase Direct Item Material Cost = Required Quantity X Direct Purchase Price
Note Purchased Materials costs are updated in the job by receipt transactions. Inventory material costs
are updated by inventory issue transactions.
Labor
Calculate labor costs by multiplying the labor hours recorded by the labor rate stored in the Employee Master
record. The Epicor application uses the following calculation for labor cost:
Labor Cost = (Setup Labor Rate X Setup Hours) + (Production Labor Rate X Production Hours)
Note This equation works for both the estimated labor cost calculation and the actual labor cost calculation.

Burden
Calculate burden costs by multiplying the burden (machine) hours recorded by the burden rate stored in the
Resource Group Master record. The application uses the following calculation to determine burden costs:
Burden Cost = (Setup Burden Rate X Setup Hours) + (Production Burden Rate X Production Burden
Hours)
Note This equation works for both the estimated burden cost calculation and the actual burden cost
calculation.
Subcontracting
This is the estimated unit cost of a subcontract service. Subcontracting unit costs are calculated using the following
formula:
Subcontract Cost = Estimated Unit Cost X Quantity Required
Note Receipt transactions update each subcontracting operation with actual quantity and cost.

Material Burden
This is the cost associated with a purchase that cannot directly be related to that items purchase price.

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Methods of Manufacturing Course

Costing Impact

Note The material burden cost of purchased materials is updated in the job by receipt transactions. The
material burden cost for inventory materials is updated by inventory issue transactions.

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21

Conclusion

Methods of Manufacturing Course

Conclusion
Congratulations! You have completed the Methods of Manufacturing course.

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Additional information is available at the Education and


Documentation areas of the EPICweb Customer Portal. To access
this site, you need a Site ID and an EPICweb account. To create an
account, go to http://support.epicor.com.