First step in pricing: Creating a list of raw materials, subassemblies, intermediate assemblies, sub-components, parts, and the quantities of each required to manufacture the finished product.
The BOM is also displayed as a graphic product tree, on which the routing cards for production are generated as well as the list of defined processes and purchase items.
There are levels and sub-levels in the tree, with the finished product appearing above and below each of the boys and each of its tree members.
Each member of a tree can be either a whole or a part of an assembly.
For each item in the tree, there is a list of processes or purchases required for its production.
Having all of this information is very important for pricing and proceeding to the next step of determining working hours for each process and procuring the items needed for production.
Following the pricing, the working hours defined in the pricing will be used for statistics and comparisons with the reporting times, for production control, and for checking compliance with the standard times.
The product tree defined during the pricing stage can also be used during the ordering stage, which will save a lot of time in re-establishing the entire process.
From the pricing department, the ordering department receives all the information and only verifies the accuracy of the information.
As soon as we have a BOM, we can start pricing each item in the product tree: the purchase items needed for production are defined, the processes the item has to go through in the production line, internal organizational processes, and external processes are defined. Following the definition of the processes there is a standard for the production of each process, and then there is an estimate of time for production that is compared to the actual time needed to produce each item, and the timeliness is set according to the standard.
The end of the pricing phase is defined by the definition of the profit percentage and the summation of costs for all the pricing components: HG and working time. Indirect and direct costs, shipping, etc. are added to these costs. After the quotation is sent to the customer, the follow-up phase begins until the quotation for the order is approved and changed.