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Who wants a million item codes? (Part 1)

Written by Pieter Hamans on . Posted in Exact Online

In a typical job shop environment, many small orders for unique parts or small series are processed each day. When we also consider all parts quoted for unsuccessfully, the potential to accumulate unique part numbers is dazzling. It comes natural to wonder whether we can quote and produce in absence of a part number. And yes, we can! In this first instalment we elaborate on operating in an average costing environment. The second instalment elaborates on the standard cost environment, where we will release an enhancement soon to support the same requirement.

Where to start

To be perfectly honest: you do need a part number. Just one. We can re-use this part number in each quotation, if we need even in multiple lines of the same quotation. We give the part a generic name like “Stamping part”, “Assembly” or just “Harry”. When we insert this part in our quotation we can customize the description (for example into the customers’ part number) and add notes.


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Creating a quotation

If a particular routing and/or material is frequently used, it may be an idea to create a template Bill-of-materials containing the lines that we do not want to enter each time. As we can create multiple active BOM versions, we can for example template versions for a “Stamping part” based on “Sheet of 1 mm”, “Sheet of 2 mm”, etc. With the Custom copy option in the quotation lines we can fill routing and material lines with little effort.


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The resulting quotation displays unique part references, details and prices without us having to create a new part number!


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Processing the shop order

Each quotation line results in a separate shop order for a separate part. We can consume materials and hours on each shop order leading to separate work-in-process balances and – eventually – separate part unit cost. In the below example, materials have been accounted for at average cost (of purchase) and the part receipt has been valued at the accumulated WIP cost. This scenario generally generates no manufacturing variance at all, which is preferred by most job shop manufacturers. (Note below)


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Valuation of parts inventory and cost of goods sold

When parts are not shipped to the customer of the linked sales order but put in stock, then they are valued at the average cost of stock receipts. It is certainly challenging to keep inventory of a variety of designs under the same part number. If this is to be expected, it may be a good idea to create separate part numbers after all! When parts are shipped to the (linked) customer, each part acquires the appropriate cost of goods sold automatically.


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Eventually, our shop order results report differentiates between the respective costs and revenues of each part, even though we have not created new part numbers.


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Support for this scenario in a standard cost environment

We are currently working on an enhancement to support this re-use of a generic part number in a standard cost environment. This enhancement should become available to all customers of Exact Online Manufacturing Basic and Advanced in the coming weeks. In the next instalment of this blog we will illustrate this new feature.

More information with Pieter Hamans (pieter.hamans@exact.com).

(Note: in an average cost environment, manufacturing variances could occur when material issues or time transactions are processed after the parts have been received, or when purchases linked to the shop order deviate from the average cost)

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