Implementing Manufacturing and Materials Management: From Empty Plant to Costed Work Order · Module 10 · Work Definitions
Costing implications
Lesson 105 of 188 · 2 min
The work definition is the basis of the standard cost rollup. Materials come from operation items. Labour and machine from operation resources. Overhead from work center rates. Every number in a standard cost traces back to something you set in the last six lessons. What a wrong work definition does to cost. A missing component understates cost. Wrong resource usage understates or overstates labour. And wrong basis on setup can be out by orders of magnitude — the per-unit setup from the resources lesson, arriving in the accounting. And the variance consequence, which is where this reaches the controller. Standard cost comes from the work definition. Actual cost comes from what really happened. The gap between them is the variance the controller will ask you to explain. If the work definition is wrong, the variance is permanent and unexplainable — permanent because it recurs on every build, unexplainable because the…
The full lesson is part of the course
The video, the complete written lesson and the module quiz are included in Implementing Manufacturing and Materials Management: From Empty Plant to Costed Work Order, with a certificate on completion and a fourteen-day refund window.
In this module: Module 10 · Work Definitions
- 1The manufacturing model decisionFree preview
- 2What a work definition contains
- 3Work definition names and versions
- 4Building operations
- 5Operation items and supply types
- 6Operation resources
- 7Validating against the shop floor
- 8Outside processing
- 9Loading work definitions in bulk
- 10Costing implications
- 11What breaks
- 12Lab: build the route the plant actually runs