Learn about real times and product making costs – calculate production
In the last article you learned how much you can save by introducing a simple production planning– today you we are going to show you how to save even more money, by explaining production calculation.
This manual is for you, if :
- You happened to work on a large scale production order and once it was completed and all expenses paid, it turned out there was no profit made, not to mention anticipated earlier bonus.
- You are not able to say what your real labor cost are for particular products and what’s real efficiency for particular operations.
- The employees use paper production orders, which are analysed with delay (or aren’t analysed at all), so your conclusions are based on nothing.
- You are under the impression that even though your workers put overtime and claim to do their best 100% – the work doesn’t progress as fast as it should.
- You aren’t able to compare planned lead times to real lead times, so majority of your production calculations are “wild guesses”.
If you answered “yes” at least twice, you will find below a solution to your problems 🙂
Why paper production orders are misleading?
You can say: “I’ve already got paper orders on the shop floor and people copy everything into Excel – do I really need a special software to get similar data?”.
Paper orders have many disadvantages – where one of the biggest is a DELAY IN ENTERING DATA (it takes time to copy data into Excel).
1. You don’t react fast enough and aren’t able to catch your employee „red handed” once the norms are subpar.
2. You aren’t able to find the real reasons for low efficiency, because having so many orders you can’t remember what happened a few days ago.
3. Your employees fail to fill out documents or they do it post factum, so the data you receive is incomplete or incorrect.
4. You waste money on paying for copying data into Excel – it can cost you more then a 6-month software subscription fee.
5. You have a monstrosity in the form of “Excel” file, which you find hard to navigate and source required information.
Registering work in electronic system is a must in 2021. There isn’t much sense in seeking advice on improving work efficiency prior to introducing it, because you cannot work without collecting some data first.
Imagine how your work would change, when you could open the software and check in 2 minutes what’s happening on the shop floor while having a cup of coffee in the comfort of your house.
Please bear in mind that all disadvantages you read about regard filling paper orders / keeping work notebooks, but not employees themselves. If in you industry it is important for the employee to have actual data at their working station without going to computer desk, you can do it with one click and generate for them paper production orders with bar codes.
Calculating production in practice – learn how much it really cost you to produce a particular detail
When you set up an account in Prodio you got an access to many different ways of accounting production and sourcing data, which you need. Here are some of the most interesting options:
1. Work history – fast sums accordingly to personalized filters to help you calculate your production
The bookmark work history is an easily accessible vault of information regarding working history of the whole company, where it’s saved every clocked: check in and clock out, number of pieces made, quantity and number of shortages, quantity / name of raw material used.
What’s more the software sums in the background: how long was working an employee and what was their efficiency, and if there was a norm set for particular product, it also shows how many percents of this norm a particular employee achieved.
This vault of knowledge allows you by using filters, not only find any required operation in work history, but also gives you almost unlimited possibilities of summing (based on any parameter wanted), so you it would suit your way of production accounting.
2. Check quickly how long it took to complete your order and whether there were any discrepancies between estimated time and lead time – total order calculation
Production accounting for order positions should be one of your favorite functions (you can find it by clicking a magnifier tool in the bookmark “Orders”). There you will find:
- total number of working hours, which your employees spent at production divided by particular operations,
- total number of working hours for all operations for a given position on the order form,,
- estimated times based on technology of the product, which describe the lead time.
Practically speaking when you look only at that simple table in production accounting for particular order, you will find out whether order estimated time was sufficient and whole production profitable.
3. Do you need more advanced reports or maybe wish to account work based on number of pieces made rate – easy production accounting thanks to Excel export
When it comes to advanced production costs tracking each company does it differently, so creating a standarized report in Prodio would be impossible.
That’s why we prepared a complete Excel export tool, so you could source required data, as well as the whole working history and have it saved on your hard drive independently.
When you use for production accounting the number of pieces made rate, you will find here everything you need: employee name and surname, type of operation, number of pieces made, dates – just one cross tab and you are ready to sign paychecks :).
Crosstables are the best ways to get your reports, so we definatelly recommend them. To prepare a report based on a crosstable you have to:
- Mark data tables (from boxes A8 to the last row with data and the column N) in downloaded work production history.
- At the top bar in MS Excel select “Paste” and “Crosstable”.
- Next, in the right-hand menu select what you want to be seen as columns, what as rows and what should be calculated in your report (and you can also choose what should be displayed, sums, average or number of occurencies).
If you wish to learn more about crosstables in MS Excel (and it’s one of the best functions of this programe), there are many simple tutorial videos on YouTube explaining how to use them – just click the following link.
4. Advanced production accounting and reports in Prodio analyses module
We will discuss in details advance production accounting based on Prodio analyses module later, because once you start your adventure with Prodio, you don’t have enough data for online system.
Eventually you will be using analyses module in Prodio and you will be able to:
- verify aggregated machine occupancy in particular weeks of the year (both for past and upcoming periods based on production schedule),
- compare productivity of your whole production and productivity of a particular employee – percentage of time spent on machine work (clock in and clock out times),
- total sum of working hours and time spent at work daily, weekly and monthly,
- …and many, many more 🙂
5. HR and payroll reports, work time accounting
Thanks to a simple build-in Time and Attendance Tracking module in Prodio your accountant / external accounting firm will have much easier task.
Open the program and go to left menu, Analyses -> Employees – HR report and you will see working hours chart for any required month, which you can easily export to PDF file.
If you need more detailed view regarding check in/ check out hours daily and for each employee, you can see it / export in left-hand menu -> Working time
If you want to learn more about Time and Attendance Tracking with RFID key-fobs check the following article.