Planned and actual production costs for an order

In the production process, task planning is essential, and one of its key elements is the estimated time, which is a forecast of how long a specific task should take. The estimated time is used to plan resources, set production schedules, and predict delivery deadlines. 🗓️

The planned time refers to the standard working time in which a machine should complete a specific operation or task. It can be set during the order planning stage or when creating the product’s technology.

On the other hand, we have the actual time, which is the real time that employees and machines spent on completing a given production order. This time is recorded after the task is finished and may differ from the original estimates for various reasons, such as:

• Unexpected downtimes

• Equipment failures

• Changes in the production process

• Material shortages.
  The actual time comes from the work history, where production entries are recorded. This allows us to see exactly how long it took to complete a specific order, as employees clock in and out of the order, and the system tracks the actual working time spent on it.
  
  When you open a specific order, you’ll see a “summary of the entire process,” where you can compare the planned and actual production costs of the order:
  

Comparing estimated and actual time helps assess production efficiency. 😀

Right next to the table, you’ll find the “Additional costs” option, where you can click the button:

Here, any additional costs that were not included in the initial planning (e.g., transportation costs, external services) can be added. This allows you to better control actual expenses and have a more complete view of production costs.

The machine cost includes expenses for operation, maintenance, and depreciation of the equipment. On the other hand, the operation cost is the total of expenses related to completing specific tasks, such as labor, material consumption, and energy use. 🔎

The machine setup cost refers to the preparation of machines before production (calibration, tool changes). Although it is an additional cost, investing in efficient machine setups brings benefits, such as:

• Reducing downtime on the production line.

• Minimizing waste and production errors.

• Increasing process efficiency.

If a machine has a set hourly rate (RBH) and we define the standard time for the scheduled task, multiplying these two values gives us the planned machine cost for that order.

The actual machine cost is calculated by multiplying the hourly rate (RBH) by the actual time spent on the task.

How to set this up?

You can enter machine and setup costs under “settings” -> “machines/operations”:

Click “add machine/operation,” and then go to the “advanced/optional” tab. Here, you can fill in the machine cost per hour (RBH) and setup cost per hour (RBH). You can also enter currency, the number of shifts, or the number of hours per day.

After entering these details, the system will automatically pull this data into the order’s overall summary. 😁

To have the table calculate the total cost of raw material consumption, you need to enter their price when adding the material to the system. Without this, the consumption cost cannot be calculated correctly.

Additionally, the table also includes worker costs for the order. This cost is pulled from the “Workers” tab. When adding an worker, there is a "Hourly Rate" field. If this field is filled, you’ll be able to see the employee cost for a specific production task as well as the entire order.

The total order cost is the sum of all production-related costs, including machine costs, worker wages, machine setup, and raw materials. The planned cost of an order is the estimated amount for the entire production, while the actual cost reflects the real expenses once the job is completed.

The total cost of the finished product is the sum of the total order costs divided by the number of units that should have been produced based on the planned costs. For actual costs, it is the sum divided by the number of products that were actually produced.

Note! ❗

When editing costs during an order, they won’t be applied to the current order—they will only be calculated from the next one onward. This prevents distorting the costs during ongoing production. 😊

For example, if production was planned to take 5 hours but actually took 6, it means the process took longer than expected. This might indicate issues such as downtimes, machine failures, or underestimating the workload. The conclusion could be the need to analyze the process and identify the causes of delays to improve future orders. On the other hand, if 5 hours were planned, but it was completed in 4, this indicates better efficiency than predicted, suggesting effective management or a well-optimized process. 🤗

Summary

Analyzing the difference between estimated and actual time helps better plan orders, optimize processes, and manage resources more efficiently. Understanding machine and operation costs and managing setup costs helps lower production expenses and improve profitability. All of this leads to higher efficiency and less waste. 😊

High five 🙋‍♀️ - team Prodio!