Golden Company

The easybaan Golden Company is the core of the easybaan concept.  It was originally developed for rapid implementation but became more and more valuable with Migration Projects. The easybaan Golden Company includes data and parameter settings due to best practice in the manufacturing business.  With the experience of 20 years of ERP implementations, a pre-configuration had grown, covering the requirements of 60-80% of the customer requirements.

The easybaan company has about 300 tables preloaded, including MCS-Tables, Finance, integration logistics – finance. The benefit is, that you login into ERP LN, enter an item, enter a customer and after that you can proceed a sales process from a sales quotation until settling the invoice in A/R. If you enter a bill of material and a routing, you can already produce this product in the SFC-module, if you enter the supplier, also the entire purchase process can be covered.

The most benefit from the easybaan Golden Company is generated within the easybaan workshop migration.  Since the easybaan company is ready-to-work right from the beginning, it is the ideal ground to base a data migration on top of it.

 

 

The graphics below show the covered processes of easybaan as an overview. Please move your mouse cursor over one of the steps and get your explanation of this step.

 

Sales Order

Sales Order

The first step in discrete manufacturing is entering a sales order and printing the sales invoice. This step initiates the logistical chain by creating material reservations and planned warehouse transactions.

MRP

MRP

MRP stands for Material Requirements Planning. Depending on the ERP-System and the version, the names might be different. In BaanIV, Material requirements planning was performed by a couple of processes. The MRP process takes care of anonymous material requirements, PRP takes care of requirements coming from PCS-Project module, CRP planned the capacities of the resources, like departments and machines. ERP LN has integrated the planning process and distinguishes only in order planning and master planning.

Distribution

Distribution

A requirement in BaanIV can be satisfied by three different ways. By purchasing goods, by manufacturing goods or by supplying from other warehouses, so called distribution requirements planning.  Easybaan does not consider distribution requirements planning.

Planned purchase order

Planned purchase order

One result of an MRP run is having planned purchase orders. The MRP run advises you to purchase a certain quantity of products, to a suggested delivery time and to a certain warehouse. Planned purchase orders are transferred to purchase orders. The purchase order is send to the supplier.

Planned production orders

Planned production orders

The other result of the MRP run are production orders. For those products that are manufactured by the company, planned production orders are created by the MRP run. Bassed on routings and bill of materials, the ERP systems suggest what to produce in order to satisfy the customers sales orders. The planned production orders are transferred to production orders. The estimated time and  materials is blocked by the production orders.

Receipt

Receipt

When material coming from a supplier is received to the warehouse, the production order can be started. In the easybaan process, the receiving of purchase goods triggers also the increase of the financial stock in general ledger.

Issue

Issue

To start the production process, the raw material is issued from raw material warehouse. Within the logistical easybaan process, the warehouse for raw material is coded with 7201 ( 7= Material handling, 72 = raw materials, 7201= raw material warehouse) .

Hours Accounting

Hours Accounting

When production is running, consumed  hours can be entered and assigned to the related production order.  The consumed hours, multiplied with the hourly rate from cost center control gives the management and the production cost, later in margin control.

Reporting Complete

Reporting Complete

When the production order is reported complete, the finished goods are stored in the warehouse for finished goods. In the easybaan concept, the warehouse for finished goods is coded with 7401. (7= material handling, 74=finished goods, 7401= warehouse finished goods).

Shipping

Shipping

When finished goods are shipped to the customer, they are taken from the warehouse 7401. The stock is increased and raising of an invoice is prepared.

Invoicing

Invoicing

With sending the invoce to the customer, in easybaan the logistical process is completed. With the invoicing process,  an entry in A/R is created, the account for the delivery, but not invoiced products is cleared.

Open entries

Open entries

With printing the invoice, an open entry is inserted in A/R

Increase Stock

Increase Stock

In easybaan the logistical process and the financial process are linked together closely by the setup of the logistic / finance integration. Depending on the item group, different stock accounts are posted.  Receipts directly change the financial assets and liabilities by posting the GRINYA accounts (Goods received, invoice not yet arrived). Balance sheets are always balanced.  Derivations from the standard cost prices in ERP LN are posted as purchase results and affect the company’s P&L.

Decrease Stock

Decrease Stock

As soon as a production order is released, material is issued from the raw material warehouse. At the same time, the financial stock is decreased. The general ledger account is determined by a fully established integration logistic / finance. If raw material is issued in a different quantity then estimated in the bill of materials, a production result is posted. Hence, logistical transactions instantly affect the P&L – statement, and the management team  has an online summary of productivity in the manufacturing department.

Increase Stock

Increase Stock

When the production order is reported as complete, the finished good’s value is posted to the stock accounts in finance. While  production was in progress, the consumed material and the consumed wages  were calculated in WiP (Work in Process). The value of the material and the wages were posted by their standard costs. Derivations in quantity or value were also calculated in WiP. With the completiion of the production orders, the value of the finished goods is posted to a stock account, and the difference in material costs and costs for wages are posted to a P&L account, a so called production result which again influences P&L.

Decrease Stock

Decrease Stock

By shipping the finished goods to the customer, the stock for finished goods is decreased. At the same time, a  P&L  account is posted with the delivered goods‘ value.

Overhead Fixed Costs

Overhead Fixed Costs

Another part of the easybaan process is Accounts Payable.  If a company wants to track their costs, one source of overhead costs is suppliers‘ invoices (besides salaries and assets).  Therefore, easybaan takes costs from A/P and uses it to calculate hourly rates in the production department. Easybaan distinguishes in the general ledger accounts between variable and fixed overhead costs.  An example for fixed overhead costs is the basic fees for a telephone system. If production is high or low, the basic fees are independent from Production’s operations.

Overhead variable

Overhead variable

Variable overhead costs are those that relate to the utilization of the company. If production is low, the variable costs are low, too. An example for variable overhead costs are telephone charges. These costs rise when a company is busy.

Purchase Invoices

Purchase Invoices

In easybaan the purchase invoices settles the GRINYA account and it inserts an entry in A/P. easybaan is prepared to settle the invoice by check or electronic banking.

Automatic Payment

Automatic Payment

Easybaan is set up to provide electronic payments. For the workshop migration, the suppliers‘ invoices can be entered and settled by check or bank transfer.

Bank Management

Bank Management

The bank management in Easybaan offers functions to handle cash transactions and give a few reports for tracking financial results like cash flow, etc.

Cost Assignment

Cost Assignment

To find out the margin of a product, the first step is to locate the source of costs. By entering  the cost center with every financial transaction, the cost gets assigned to its originating cost center. So easybaan always knows which costs came from which cost center.

Cost Apportionment

Cost Apportionment

The creation of value is performed in the production department.  It is crucial to know  how much one hour in production will be in order to cover all costs. Meaning, costs of the production itself, but also overhead like buildings, properties, heating, cooling, and administration somehow have to be assigned to the production department.  Costs have to be entered in Finance by a cost-by-cause principle. Costs from cost centers, centers not directly related to production, are broken down in a relation that can be defined by the users.

Cost apportionment in easybaan  breaks down overhead costs and assigns it to production.

Cost Center Calculation

Cost Center Calculation

This is a tool to calculate the hourly rate of the main resources of a company, mainly the production departments. It takes costs from the general ledger, makes use of cost apportionment, and then divides the annual overall costs by the available hours. This results in the hourly rate by department.

Cost Price Calculation

Cost Price Calculation

Based on the hourly rate of  production and surcharges of  overhead costs, the cost prices of consumed material can be calculated.

Hourly Rate

Hourly Rate

Based on the input of salaries, the hourly rate of wages is calculated.

Overhead

Overhead

Based on the overhead costs, a surcharge to the cost calculation is calculated.

Material Consumption

Material Consumption

The issue from logistics gives easybaan the quantity of the products, consumed per production orders. Together with the cost prices, coming from cost price calculation, easybaan reports the material cost per cost unit, typically per product line. Easybaan defines item groups as product lines.

Time Consumption / Cost Unit

Time Consumption / Cost Unit

The integration logistic / Finance separates the costs of  wages consumed from production per cost unit. So the users of easybaan are constantly aware of the production costs of the products.

Profit / Cost Unit

Profit / Cost Unit

Since easybaan knows the profit per cost unit and the production cost per cost unit, it can easily report the margin of the costs units. For presentation of the results, easyDB5, an MS-Excel-based product is used.

Easybaan is not only IT, it is a business concept.