Overview:

When delivering fixed-price projects, there are always two fundamental items that must be considered:

1. The financial aspect; how much of the budget we have spent.

2. The physical aspect; how much of the work we have completed.

It is important to understand their interrelation, and how they are interpreted will impact how successfully the project status is reported at a given point in time.

Production Measures combines with our Forecasting module to evaluate cost against physical completion and provides the ability to make Forecast Adjustments based on this information. Therefore, this module requires that a Forecast be generated for the desired period, and the process can be done once per financial period (i.e. calendar month).

The Measurement screen allows you to record either an "Actual Qty" or a "% Actual" for each Work Centre, and includes all sub jobs in the Contract. This is then compared to the "Actual Cost" against the budget to work out whether the project is on track or running behind. The percentage difference in the Actual Rate of production can then be updated back into the Forecast as an Uncommitted Adjustment. Any line comments are recorded as the Details of the Uncommitted Adjustment. Otherwise, the details are populated with default text indicating that the adjustment originated from Production Measures.

Download our Production Measures Manual here:

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Screen Guide:

Production Measures are accessed via the blue ellipsis button in Jobs:

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• + New Measure button appears when first viewing this screen. Clicking this will open up the Forecast Period selection window, displaying all available financial periods. You can easily tell which ones have been forecasted by looking at the "Refresh Date" column.

• Refresh Measure becomes available once a new measure is generated or an existing one is selected. This button will refresh the current Production Measure as well as the underlying Forecast Period with any new transactions up to the end of the selected financial period.

• Job finder allows you to select the job you wish to update. Remember that a Forecast must have been created before the selected job will display data. Also, selecting a "Hierarchy 1 Job" will list all sub jobs under it.

• Measure Period allows you to select previously created production measures for the selected Job. If you have selected a period and wish to add a new Measure Period, simply clear the period and the + New Measure button will appear. Note that only periods in which a measure has been saved for the selected Job will appear in this list.

• Basis is currently restricted to Forecast. Future development is planned to increase this.

• Date is based on the last day of the forecast period

• Job is the selected Job from above, including all sub jobs.

• Work Centre lists all Work Centres available from Job Maintenance.

• Unit is the unit of measurement assigned to the Work Centre in Job Maintenance.

• Budget section displays budgeted amounts from Job Budgets.

  • Budget Qty is the budgeted quantity of the Unit field.

  • Budget Cost is the total amount of cost budgeted for this Work Centre.

  • Budget Rate is the budgeted cost divided by the budgeted quantity.

• Actual section allows you to enter actual production measures and comments, and also pulls data from Job Transactions: Timesheets, Purchases, Journals, etc.

  • Actual Qty is the first field that you can edit, stating how much quantity of the budgeted unit you have completed to date. Filling in a value here will automatically fill in the percentage in the following field.

  • % Actual is another editable field, making it easy to state a percentage of the total amount done for this line. Filling in a value here will automatically fill in the actual quantity, so long as the budgeted quantity is not zero.

  • Comment is a free text field for you to note anything you need people in your company to know about this line in particular. This text will flow into Forecast Adjustments details if you use the "Adjust Forecast" button.

  • Actual @ Budget Rate makes the following calculation: Actual Qty multiplied by Budget Rate. This indicates how much cost would normally be spent based on actual work done.

  • Actual Cost is the actual amount spent for this Work Centre through Timesheets, Purchases, Journals, etc., up to the end of the selected Forecast Period.

  • % Budget Cost calculates the percentage of the budget actually spent by dividing Actual Cost by Budget Cost. This shows how much of the budget has been spent to the end of the Forecast Period.

  • Actual Rate, or the achieved rate, is the Actual Qty to date divided by the Actual Cost at this snapshot. This indicates the current achievable rate per Budget Qty so far for this Work Centre.

• To Complete Rate section allows you to choose how to calculate the To Complete Rate Value based on the following: 

  • Ac stands for Actual; Selecting this will populate the Rate Value field with the Actual Rate. Using this option indicates to the system that you believe the derived Actual Rate is more likely to be accurate than the Budget Rate, and therefore it should use this rate in the cost to complete calculations.

  • Bd stands for Budget; Selecting this will populate the Rate Value field with the original Budget Rate. Using this option indicates to the system that you believe the original rate is more likely to be accurate than the derived Actual Rate, and therefore it should use this rate in the cost to complete calculations.

  • Mn stands for Manual; Selecting this option will allow you to manually populate the Rate Value field based on your knowledge about the reality surrounding the project.

  • Rate Value displays the value according to which selection above is chosen. If Manual is chosen, this field will be editable.

• To Complete section calculates the quantities and costs to complete the Work Centre:
  
  

  • Qty To Complete takes the Job Work Centre Budget Qty minus the Actual Qty to date.
    
    

  • Cost To Complete multiplies the Qty To Complete by the Rate Value.

• Forecast Final Cost contains calculations to reconcile the production measures with the actual costs:

  • From Measure adds the Cost to Complete field with the Actual Cost from the forecast.

  • From Forecast brings in the Forecast Final Cost from the forecast table.

  • Variance is the difference between the previous two fields.

  • % is the percentage difference between the first two fields.

  • Previous Forecast displays the Forecast Final Cost from the previous financial period calculation. This originates from the Forecast table, not the previous period's Production Measures table.

  • Variance to Previous is the difference between the From Measure and Previous Forecast fields.

• Adjust Forecast will populate the Forecast table with Uncommitted Adjustments equalling the Variance field in order to bring the forecast into alignment with the Production Measures. This function requires that the Control Parameter "Production Measure Activity" has a valid Activity set and will produce an error in red warning if it is not.

• Save commits the entered data to the system. It is recommended to save before navigating or changing pages in the list.

Next Steps:

Once you have adjusted your Forecast, be sure to review it to ensure the results are as you expected.

Remember that this is a monthly process in conjunction with forecasts and should be completed for each project that uses Production Measures.