Business Considerations
Introduction to Business Considerations
The procedures and policies of your company affect the way you set up QAD Enterprise Applications. This section covers some issues to consider before setting up work centers and routings.
Business Issues
This slide indicates some of the business issues to consider before beginning the implementation. We cover each one on the following pages.
Repetitive and Shop Floor Control
Routings are required in repetitive and shop floor control for:
• Scheduling operations for repetitive
• Backflushing components in the repetitive module
• Obtaining operation feedback in shop floor control and repetitive
.
Note: You cannot establish standard costs with Routing Cost Roll-Up.
Subcontracting
Subcontracting involves the processing of your materials by an outside supplier. For example, companies send raw materials to a supplier for manufacture or assembly, then bring them back in-house. The raw materials are on the books; the supplier does not own them.
This process spans modules in QAD Enterprise Applications, using purchasing, manufacturing, and shop floor control programs, as well as the repetitive functionality.
• You set up an operation for the subcontracted work.
• When the work moves to the subcontracted operation, you create a purchase order and refer the line item back to the operation as a line type S.
• You receive the work and move it to the next operation.
Some manufacturing systems use item numbers to account for subcontract costs. QAD Enterprise Applications uses routing operations to plan and track these costs.
Capacity Requirements Planning
You can set up work-center-specific hourly capacity in the shop calendar.
Burden/Labor Rates
Cost accountants generally maintain burden/labor rates. Typically, they are considered the variable portion of overhead related directly to production hours.
In contrast, overhead is considered a fixed cost and is applied to inventory at the time of work order or purchase order receipt.
Machine Burden Rate
Labor Burden Rate
Note: If a Labor Burden Rate is also entered, it is added to Total Burden.
