Re: [erpnext-user-forum] BOM Cost Update

We have added a button "Update Cost" in BOM to update material cost in one click. It will fetch all values as per last purchase rate or valuation rate and recalculate totals as per that. The button is only visible if BOM is not submitted.

Please pull the latest updates.

On 26-Jul-2013, at 2:37 AM, James wrote:

Hello,

I made and submitted a BOM for an assembly with a number of subcomponents. At the time, I had yet to enter purchase orders for any of the subcomponents so I left the rate for each item to 0.00. I then submitted a few different P.O.s for the subcomponents. When I go back to the BOM, the rate for each item (in both sections 2. Materials and 5. Materials Required) still says 0.00. This happens even though I have the BOM "Rate of Materials Based On" equal to "Last Purchase Rate". If I click on the subcomponents individually and go down the page to 4. Purchase Details section, the field Last Purchase Rate is updated and correct for all subcomponents.

Is this by design? Is there a way to update the BOMs so that the cost is calculated from latest P.O.s?

Thank you,
James



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Okay thank you. That seems useful.


So after the BOM has been submitted there is no means to update the cost? That’s confusing me because the cost is listed as being based on “Last Purchase Rate” but it’s not. It’s really “Last Purchase Rate at time of BOM Submission”. Or am I misunderstanding?

Ideally, I’d submit the BOM first so I can generate P.O.s from it and then it would update the cost based on those P.Os. Having an up-to-date costing would allow us to evaluate our current pricing structure and determine if prices for our products need to go up or down.

James



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I see no reason not to update prices on an Existing BOM (after it is Submitted) - we will update the changes.

(Please raise these issues on GitHub - https://github.com/webnotes/erpnext/issues - so that you get a update when its completed!)

best,
Rushabh


T: @rushabh_mehta

On 26-Jul-2013, at 7:24 PM, James <sp...@gmail.com> wrote:

Okay thank you. That seems useful.

So after the BOM has been submitted there is no means to update the cost? That's confusing me because the cost is listed as being based on "Last Purchase Rate" but it's not. It's really "Last Purchase Rate at time of BOM Submission". Or am I misunderstanding?

Ideally, I'd submit the BOM first so I can generate P.O.s from it and then it would update the cost based on those P.Os. Having an up-to-date costing would allow us to evaluate our current pricing structure and determine if prices for our products need to go up or down.

James



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Now "Update Cost" button is visible even after submit. Please pull the latest updates.

On 29-Jul-2013, at 11:21 AM, Rushabh Mehta wrote:

I see no reason not to update prices on an Existing BOM (after it is Submitted) - we will update the changes.

(Please raise these issues on GitHub - https://github.com/webnotes/erpnext/issues - so that you get a update when its completed!)

best,
Rushabh


T: @rushabh_mehta

On 26-Jul-2013, at 7:24 PM, James <sp...@gmail.com> wrote:

Okay thank you. That seems useful.

So after the BOM has been submitted there is no means to update the cost? That's confusing me because the cost is listed as being based on "Last Purchase Rate" but it's not. It's really "Last Purchase Rate at time of BOM Submission". Or am I misunderstanding?

Ideally, I'd submit the BOM first so I can generate P.O.s from it and then it would update the cost based on those P.Os. Having an up-to-date costing would allow us to evaluate our current pricing structure and determine if prices for our products need to go up or down.

James



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I am looking to implement ERPNext in a discrete manufacturing scenario with many multilevel BOMs for standard products. I have gone through most of the threads in the forum related to this and understand that BOM’s have a fairly rigid structure which is designed majorly for projects. I find it unusable for discrete manufacturing purposes-

(Even for projects) if user forgets to update item costs every time in all associated BOMs, then there is risk of miscalculating the accounts. This risk escalates with multilevel BOMs, as one has to open BOMs separately and then click on update prices button, as this means first going through each BOM and pressing “Update Cost” button.

To accommodate this, is it possible to -

  1. Put an option in settings to update BOM cost everytime it is used? (I think that every-time someone uses a BOM for sales order or quotation, the latest pricing must be used according to the valuation)
  2. or through a script to update cost on daily basis?

I see that this has come up a couple of times in the forums. Please share your thoughts and if there is any work-around for this?

I have had this same issue, so I can give you my thoughts (I don’t have a work around figured out yet).

  1. Using the BOM for costing is not a particularly good idea, even if the costs automatically updated. This is because the cost it uses does not take into account any Taxes or Charges associated with the items. If you pay shipping or fees on your purchased items, those costs are not included in the valuation. For us, this accounts for sometimes more than 50% of the total cost of the goods.

  2. It shouldn’t be too hard to write a quick server-side script that goes through each BOM doc and runs the update cost function. You could use a hook to have that run every day. I could use this tool, so if/when I get around to writing it I can post it here.

Thanks for sharing your experience in regards to the BOM costs.
I agree that bom costs should not be used for costings and quotations. However I see 2 uses in the manufacturing or even project cases for which updated cost is a must -

  1. To compare actual vs calculated (bom) expenses to find out efficiencies.
  2. To find out internal department/ stage wise efficiencies.

I agree that being able to get an up to date cost on a BOM is critical.

ERPNext is missing a tool for costing out sales items based on a BOM. I envision one which will include purchase price, any additional charges, and additional mark ups (pulled from selling pricing rules). Being able to show a table with all of these costs, summarized into a final price would be very nice. These would be generated directly from a BOM and would be fixed based on when they are generated (i.e. create a new one every time you want an updated price, so that old ones are stored for reference).

I’m kind of stuck with my implementation, as with about 50 multi-level boms, we will never be able to update, and are bound to make mistakes in our system. Thereby compromising on a major role of ERP of internal costings.
Is it possible to place an “Update all bom costs” button that we could click everyday, (as a quick fix).
I fear that by customizing server side we could face problems with future updates, which I wouldn’t like to lose on, as the product is getting better day by day.

It would be great to get feedback from the ERPNext Team.

+1 I’m In exactly the same situation. We have been updating each individual BOM as production orders for those items are raised. It would solve a lot of pain in we could update all BOMS on last purchase rate.

Actually won’t the valuation rate take all these into consideration?

Did you have a go at it yet? Do you think it’ll be better if done every time a production order is created? only for parts in that production order?

It depends on what valuation you are using. If you’ve already purchased the components then maybe (I’m not sure if it does). Most of our quotation needs to happen before we’ve purchased the items, so just having supplier quotations (with Item Prices). Those don’t have taxes or other charges.

I haven’t got around to doing this yet.