Estimating cost before Quoting

Richie · February 17, 2017, 5:07pm

As someone testing ERPNext, I can’t find out how to estimate the cost of making an order. In my BOM I have entered the costs for making 1 item. So how do I get an estimate of the cost to make 100, for example, without creating a new BOM? The only solution that I can find online is to create a new BOM. Surely there must be a simple method of scaling up/down according to volume and the BOM? It would be useful to have this information when making a quotation to make sure your not selling at less than cost.

Any help would be appreciated.

KanchanChauhan · February 18, 2017, 7:10am

How about you do not submit that BOM, just take an idea and delete it in Draft mode itself.

Richie · February 24, 2017, 3:58pm

Hi @KanchanChauhan,

Thanks for your input but this doesn’t really address the issue. I don’t want to have to make a draft BOM each time. The BOM should be setup in such a way as to allow you to scale up the costs quite easily. So variable costs should scale with the number of units made (eg raw materials, labour etc) whilst fixed costs well remain the same (eg setup costs, clean down costs etc).

I can’t believe this functionality doesn’t already exist in the system. Anyone else know how to do this?

Richie

Ruth_Smart · April 10, 2017, 9:31pm

Hi Richie,
I have the same question as you and I am also surprised at the lack of this function.
We are often asked to quote for a quantity of 1, 2 ,5, 10 or 100 of an item so that our customers can choose the optimum quantity to order for their stock requirements.
Please let me know if you get any answers !
Ruth

Richie · April 11, 2017, 8:58am

Hi Ruth,
I seem to have hit a blank here and haven’t got any answers. It would seem to be a fairly fundamental requirement to be able to use the BOM to estimate costs based on different quantities.

I had trial of an alternative online MRP system (who shall remain nameless) and it had this functionality which is when I realised that ERPNext doesn’t seem to be able to do this.

Richie

jaliya · April 12, 2017, 5:15am

Have you tried duplicating the original BOM and amending only the variable costs for a different quantity?
Jaliya

Richie · April 12, 2017, 7:22am

Hi @jaliya. Thanks for your input but in my opinion there should be only one BOM per product. If I follow your suggestion, then there will be multiple BOMs relating to the same product but different quantities. I can see that becoming unmanageable in situations where you make different variants of one product according to customer requirements.

I cant see why, if you have a BOM set-up with all the fixed and variable costs, that it can’t be used to calculate sales costs and prices for different quantities. Ideally I’d expect to see one BOM for a product, a quantity required and a calculation of costs/sales price.

Anyone one else have an input on this?

Richie

Richie · April 26, 2017, 3:08pm

@Ben_Cornwell_Mott, @JayRam

Sorry for the direct message guys but you seem to know most about the manufacturing module and I can’t find anyone else who can answer my question.

In short my question is if I have a BOM for 1 unit, can I use this to scale up costs for 100 units or am I obliged to recreate a new BOM for 100 units? We manufacture to order so being able to do this would be a priority for us.

Thanks for your help.

Ron_Taylor · April 26, 2017, 3:16pm

I thought the BOM was a manufacturing tool not a quoting tool. Although it would be nice, I can see and understand why it will not do what you want it to. It is outside the scope of what it was designed for.

We also manufacture to order. The BOM is set up as the material requirements to manufacture 1 u-bolt.

We estimate costs for manufactring different quantities of the u-bolt, and different products externally

Richie · April 26, 2017, 3:34pm

Maybe I’m asking the BOM to do something that it isn’t designed to do.

The software seems to me to be missing a feature if you can’t use the information already entered into the BOM (raw materials, process costs etc) to make quotes for multiple units.

Or is it just me?

Ben_Cornwell_Mott · April 26, 2017, 4:54pm

The BOM tool is not currently very good for quoting. Not only is the quantity a problem (especially when you have pricing rules based on volume discounts), but the prices of BOMs don’t update when you have many sub levels.

I started working on a tool that would categorize BOM costs better, but it’s a definite work in progress. The code is here for anyone who wants to use it / work on it:

Once I have a change to get it functional, I’ll integrate it with the core code so everyone can have a good tool for estimating the BOM costs with full price breakdowns, etc.

JayRam · April 27, 2017, 2:54am

Wouldn’t a BOM report with last purchase rate and stock valuation report that lists the exploded BOM the quantities and the total rates serve your requirements? While I can understand the need to get the costing of the products you manufacture, the Cost of Goods Sold can also serve this very same purpose?

COGS would directly work for products you have made and shipped, while the BOM report would work for products you are conceptualizing as long as you have bought the raw materials and components before.

Hope this helps.

Thanks

Jay

Not_a_countant · June 13, 2017, 6:06pm

Hi Jayram, would you be able to explain this concept a little more? How can COGS serve this purpose?
Thanks
Deepak

JayRam · June 14, 2017, 1:15pm

I mean, let’s say you pass a manufacturing entry for Product A, the Valuation of Product A will be the sum of valuations of the components of the BOM and the Opearational costs (assuming that you are tracking operational costs).

Now when you invoice Product A, the valuation of this stock gets transfered from your Balance Sheet (it was in your Current Assets - Stock Assets head) to an expense account - usually Cost of Goods Sold.

So, if you go to your general ledger and look for the Delivery Notes (or Invoices) where you have invoices Product A, and choose Cost of Goods Sold (or the appropriate expense account to which you have booked this expense), you will get the cost of making Product A.

Of course where you have multiple products being invoiced together, the COGS for that invoice will be the sum total of the COGS for all the products you are invoicing.

In such cases, you go to the stock ledger report and figure out the valuation of the Product A on the day it got invoiced. That will be the COGS for Product A, specific to the BOM you used to manufacture that product.

Thanks

Jay

Does that work for you?

Thanks

Jay

revant_one · June 14, 2017, 3:12pm

Custom Cost Sheet Generation

github.com

mntechnique/excelus_erpnext/blob/master/excelus_erpnext/excelus_erpnext/doctype/excelus_customer_inquiry/excelus_customer_inquiry.js#L41


      
                          c.item = d.item_code;
                          c.qty = d.qty;
                          c.uom = d.stock_uom;
                          });
                      }
                      refresh_field("ci_items");
                      frm.layout.refresh_sections();
                  }
              });
          });
          frm.add_custom_button(__("PDF"), function() {
              //console.log(frm.doc.items);
              var requirements = [];
          
          
    $.each(cur_frm.doc.ci_requirements, function(key, value){
                  requirements.push(value.name);
              });
          
          
    var w = window.open("/api/method/excelus_erpnext.ci_print.print_ci?"
                  +"ci_name=" + cur_frm.doc.name + "&requirements="+encodeURIComponent(requirements));

In this case, business depends on commodity exchange rates, existing supplies, customer provided supplies.

Generating timestamp based cost sheet for customer inquiry is crucial for quoting as well as making other business decisions.

Feed in Customer Inquiry and generate cost sheet:

Cost based on various complex calculations :

*packing costs are 0 in the above case because packing is pre-printed and provided by customer.

Not_a_countant · June 14, 2017, 7:46pm

Ok got it. Thank you very much for the explanation!

Not_a_countant · June 14, 2017, 7:49pm

Thanks Revant. Looks like you have implemented a neat solution. Is that something that we can find in the ERPNext core functionality? thanks

revant_one · June 14, 2017, 11:08pm

It pulls rates from BOM and custom doctype.
It applies custom formula for 3 types of packing material.

It is there in custom app. (Url shared)
Use it as reference and build new app.

batonac · April 9, 2022, 8:25pm

I know this is an old thread… according to the documentation, ERPNext 13 does offer BOM costing, including an “Update BOM Cost Automatically” option. Does that mean that the functionality requested in this thread is now available, or is there still a gap to close here?