Saturday, 1 August 2009

Job costing in a free print MIS?

Well, we always promised it to ourselves, and it really seems to be here. Next week (with luck) we'll be adding job costing to our free Community edition. Everybody says "why?" so I've been trying to work out why it's so important to us.

I think it's that that we've always said - for the last 20 years or so - that any print MIS without some method of comparing real against theoretical costs is about as useful as a chocolate teapot. Actually, thinking about it, its probably a damn sight more dangerous than the chocolate teapot could ever be, in that you might get a bit scalded when the chocolate melted, but the MIS could actually lose you your company.

The point is that you can do all the theoretical calculations in the world but the only real way you can find out if you're getting enough to survive on is to cost a few jobs to see how accurate your estimates are.

In practice you don't even have to cost every job. One company I know costs a random ten percent sample. They simply mark every job sheet which has a job number ending in zero with a yellow highlighter. As those job sheets go through the shop floor everyone knows that you have to fill in your times and stock usage, and at the end they get collected and entered. Then you can start to analyze task by task whether you are getting it right or not.

It's analyzing the figures that is so important. For instance it's all very well knowing your cutter costs may be out by ten percent, but you need to find out whether there was one job that skewed the sample, or whether you are consistently out and need to revise the way you estimate cutting.

So that's why we place so much importance on job costing, and why we're bundling it in the free community edition. I reckon that's a world first!

Best wishes from Printpak

Richard Fergusson