Operation rates

Five types of operation rates exist:

• Labor (average costs of one hour of labor).
• Machine (average costs for a machine for one hour).
• Labor Overhead (indirect costs for one hour of labor).
• Machine Overhead (indirect costs for a machine for one hour).
• Labor Setup (costs of setting up for production)

For various operation cost types, the amounts are calculated as follows:

• Labor Setup

  : Labor Setup Resources (FTE) * Setup (h) * Rate

• Labor

  Labor Resources (FTE) * Run (h) * Rate (in which Run (h) = Cycle Time * Order Quantity)

• Labor Overhead

  : Labor Resources (FTE) * Run (h) * Rate (in which Run (h) = Cycle Time * Order Quantity)

• Machine

  (Setup (h) + Run (h)) * Number of Machines * Rate

• Machine Overhead

  (Setup (h) + Run (h)) * Number of Machines * Rate

Operation Rates With Job Shop by Site Active

If the Job Shop by Site parameter is set to Active in the Implemented Software Components (tccom0100s000) session, the operation rates are retrieved from the Operation Rates (ticpr1151m000) session.

The operation rates are applied directly to production orders by operation cost type.

Operation rates are defined on six levels:

• Actual rates

  These rates are defined at employee level, only labor and labor setup rates. They only apply to actual hours, not to estimates.

  Note: These employee-level rates do not apply to the standard cost calculation.

• Manufacturing projects

  Note: Only for applicable customer specific products.

  These rates are defined at project level specifically for customized project items with a project specific cost calculation code for the project.

• Reference operation

  The reference operation is a combination of reference operation code, machine type, work center and site.

• Machine capacity group

  Rates are defined for the combination of machine type, work center and site.

• Work center

  The work center of the machine capacity group.

• Production department

  The rates are defined by the production department's calculation office.

When no rate for an operation type is found, LN interprets this as zero.

Managing Existing Operation Rates in the Operation Rates (ticpr1151m000) sessionIf you need to change the data for an existing rate with the Approved field set to Yes:

1. Select the operation rates row you want to copy.

2. Copy the selected row.

   The new row retains the sequence, description and type of operation costs of the source row.

   The new row has the Approved field automatically set to No.

   You can manage the rest of the data, such as rate and cost component. You can also alter the effective date for the changed rate.

3. Use the Approve command, once you have made all the changes, to change the status of the Approved field to Yes. LN will automatically set the expiry date of the previous, approved row with the same cost calculation code, operation rate code, site and sequence to the effective date of the newly approved rate.

Operation Rates With Job Shop by Site Inactive

For operation rate lines sequence numbers are defined, which allows for multiple operation rate lines. You can define a maximum of 999 lines for each operation rate.

The operation rate code with accompanying operation rates is linked to a work center in the Work Centers (tirou0101m000) session, and/or to a work center/task relationship in the Task Relationships (tirou0104m000) session.

Whether the operation rates linked to the work center or to the work center/task relationship are used for cost calculation depends on the setting of the Type of Operation Rates field in the Standard Cost Calculation Parameters (ticpr0100m000) session.