Shop-Trak Multi-Job Transaction Costing

A Multi-Job transaction is defined as one employee using one work center that produces several jobs at the same time.  

Multi-Job Overview

Multi-Job transactions are created when an employee works on a single work center that produces more than one job at the same time.  Multi-Job can also be utilized for employees working on a multitude of small duration, rapidly changing jobs.  In this type of situation, it is not practical for the employee to attempt to calculate the amount of time (labor hours) that each piece should have allocated, nor is it realistic for the employee to run back and forth to the time clock.

Multi-Job transactions can be for either Setup or Run labor and cannot be used to allocate both in the same transaction set.  The key to a Multi-Job transaction is that it involves work that is being produced in the same work center.  Examples of work centers that can utilize Multi-Job transactions are cutoff saws, multi-pallet CNC machining centers, anodizing tanks, laser burning machines, CNC routers, robot welders, paint lines, etc.

Multi-Job uses a method of allocating actual time to each job in accordance with the planned time necessary for each job.  The key to understanding the time allocation is to understand that each piece produced must have a routing operation.  The planned time for the routing operation is used to calculate the actual time spent on the job.  The routing operation planned time is defined on the Job Operations form.  If no time is set up in the routing operation, no time will be allocated to the job.  

NOTE:  The Quantity Worked On is used to split the hours versus the Quantity Complete because the two can differ.  In longer running jobs, even though the jobs are started, there may be times when the employee does not actually complete any pieces.

Multi-Job Costing

When costing a Multi-Job transaction, actual Run or Setup hours are split based on the schedule driver’s (Labor, Machine, or Fixed) planned time and the quantity worked on.  The full manufacturing rate and full labor overhead are then applied to the allocated hours.

Example:  Using Planned Labor Time

Bob's manufacturing rate is $15 per hour.  The overhead for Bob's department is $25 per hour.  At 9:00 a.m. Bob starts working on Jobs 1000, 2000, and 3000 in the same work center.  He works 8 hours and ends all three jobs at 5:00 p.m.  Bob worked on 10 pieces for Job 1000, 20 pieces for Job 2000, and 30 pieces for Job 3000.

1. The first step in determining the cost of the Mutli-Job is to calculate the planned time for each job.  For this example, Shop-Trak will use Pieces per Labor Hour as the job routing type.  The job route standards for each job are:
• Job 1000:  5 pieces per labor hour
• Job 2000:  10 pieces per labor hour
• Job 3000:  5 pieces per labor hour
2. Using the job route standards above and the quantity worked on, the Planned Time to complete the job is calculated:
• Job 1000:  10 pieces worked on at 5 pieces per hour = 2 hours (10/5 = 2)
• Job 2000:  20 pieces worked on at 10 piece per hour =  2 hours (20/10 = 2)
• Job 3000:  30 pieces worked on at 5 piece per hour = 6 hours (30/5 = 6)
• Total:  2 + 2 + 6 = 10 Hours Planned Time
3. Using the Planned Time above, the Percent of Planned Time for each job is calculated:
• Job 1000:  2 hours is 20% of 10 hours (2/10 = .2 or 20%)
• Job 2000:  2 hours is 20% of 10 hours (2/10 = .2 or 20%))
• Job 3000:  6 hours is 60% of 10 hours (6/10 = .6 or 60%)
• Total:  20% + 20% + 60% = 100%
4. Using the percentages above, the Allocated Hours are calculated for each job by applying the percentages to the 8 hours worked:
• Job 1000:  20% of 8 hours worked = 1.6 hours (.2 * 8 = 1.6)
• Job 2000:  20% of 8 hours worked = 1.6 hours (.2 * 8 = 1.6)
• Job 3000:  60% of 8 hours worked = 6 hours (.6 * 8 = 4.8)
• Total:  1.6 + 1.6 + 4.8 = 8 Hours (100%)

5. The Cost for each job can now be determined using the hours allocated above multiplied by the manufacturing and overhead rates:
• Job 1000:  (Labor = 1.6 hours * $15 per hour = $24) + (Overhead = 1.6 hour * $25 per hour = $40) = Total Cost of $64.
• Job 2000:  (Labor = 1.6 hours * $15 per hour = $24) + (Overhead = 1.6 hours * $25 per hour = $40) = Total Cost of $64.
• Job 3000:  (Labor = 4.8 hours * $15 per hour = $72) + (Overhead = 4.8 hours * $25 per hour = $120) = Total Cost of $192.

Example:  Adding a Fixed Scheduled Job

With the job routing defined as Fixed Scheduled the algorithm allocates time to the fixed scheduled job by dividing the total time worked by the number of jobs.  The remaining time is allocated utilizing standard multi-job calculations. A total hours worked of 8 on 4 jobs will allocate 2 hours to job 4000.  The remaining 6 hours are allocated to jobs 1000, 2000, and 3000.

• Job 1000:  20% of 6 hours worked = 1.2 hours (.2 * 6 = 1.2)
• Job 2000:  20% of 6 hours worked = 1.2 hours (.2 * 6 = 1.2)
• Job 3000:  60% of 6 hours worked = 3.6 hours (.6 * 6 = 3.6)
• Job 4000:  8 hours worked / 4 jobs = 2 hours
• Total:  1.2  + 1.2 + 3.6 + 2 = 8 Hours Worked

Secondary Job Overview

A special function has been added to Multi-Job that allows machines to operate unattended until the work is finished (for example, a laser burning machine).  While the machine is running unattended, many companies will have the operator work on some miscellaneous tasks, such as grinding, polishing, deburring, etc.  This allows the operator to be productive vs. watching the machine operate.  This work is considered miscellaneous and is secondary to the primary work center.  Multi-Job will allow the employee to enter transactions on a second work center, not the same as the original (primary) work center.  The time allocated to the secondary job uses the planned time defined in the routing standard and is not allocated amongst the primary jobs.

Secondary Job Costing

The Secondary Job Costs check box on the Flags tab of the Shop-Trak Parameters form allows the Administrator to determine if the secondary job is charged the full labor rate of the employee or a zero rate.  If this check box is selected, any secondary pieces are costed at the planned cost determined in the routing standard for the secondary job, including labor.  If this check box is cleared, no labor costs are charged to the secondary job.  Time and related overhead, however, are still charged to the secondary job.  

The strategy of allowing a zero rate is that the time and related overhead will still be charged to the secondary job, but since the primary work center is being charged the full labor rate, the secondary Job could be considered a no charge operation.  Note that the secondary job does not get the full attention of the operator; accordingly the actual time to produce pieces usually takes longer than the planned time.  Knowing that the operator is actually charging time to the primary work center makes these jobs potentially free.  This is the choice of management to choose no rate or the employee’s manufacturing rate.  

NOTE:  If the secondary job's planned time is more time than assigned on the primary jobs, Shop-Trak will assume that the jobs reported as secondary were actually primary and allocate accordingly.  The schedule driver of the job's operation will be used for determining which plans to utilize for the allocations (Labor, Machine, or Fixed).

Using the same rates as in the previous Multi-Job example, the Cost for the secondary job is:

• Job 9000 (Secondary Job Costs check box = Selected):  (Labor = .5 hours * $15 per hour = $7.50) + (Overhead = .5 hours * $25 per hour = $12.50) = Total Cost of $19.50.

or

• Job 9000 (Secondary Job Costs check box = Cleared):  (Labor = $0) + (Overhead = .5 hours * $25 per hour = $12.50) = Total Cost of $12.50.

Secondary Job Frequently Asked Questions

• What is a secondary job?
  A secondary job is a job that an employee works on while waiting for the primary job to finish.  Rather than the employee being idle waiting for a machine to finish cutting parts for multiple jobs, they can be working on other tasks, such as polishing or deburring parts.  In Shop-Trak, we call this a secondary job or secondary operation because it is being performed at a different work center than the primary job.  Secondary jobs do not get the full attention of the employee, therefore the actual time to produce pieces usually takes longer than the planned time.  Also, the primary job can be charged the full cost of the employee's labor.
• What conditions must be met to allow for a secondary job?
  The primary work center must have a Multi-Job Rule set up on the Shop-Trak Rules form and the secondary work center must not have a Multi-Job Rule.  Also, the Allow Multi-Job Across Work Centers check box must be cleared.
• How do I enter a secondary job?
  End the Multi-Job transaction as a Run transaction.  Enter the jobs that were worked on in the primary work center.  Enter the jobs that were worked on in the secondary work center.  You will see a message stating "The Work Center of this operation is not the same as the Primary Work Center."  Click OK and finish entering jobs.
• Can I enter more than one secondary job?
  Yes, more than one secondary job may be entered.
• What if I do not want to charge the labor hours to the secondary job?
  Clear the Secondary Job Costs check box on the Flags tab of the Shop-Trak Parameters form to charge only overheard to the secondary job, but no labor.  The labor will be reflected on the job, but the manufacturing rate will be $0.00.
• What will get charged to the secondary job if I choose to cost the job?
  Select the Secondary Job Costs check box to cost any secondary pieces at the planned cost determined in the routing for the secondary operation.  The secondary job will be charged overhead at the department overhead rate, and also labor hours at the employee's manufacturing rate.  

Related Topics

Shop-Trak Defining Flags Parameters