Good Afternoon,
I am looking for some guidance on project cost behaviour in an engineer-to-order environment.
We manage our builds in Project Navigator, with most demand originating from customer orders and driving inventory supply. Our BoMs are multi-level and complex, often containing thousands of components. It is common for standard planned items to be allocated to project-specific demand as part of the MRP process.
We have observed significant differences between:
• Planned Committed cost (post-MRP)
• Committed (released) cost
• Completed / Used cost
On investigation, it appears that standard planned components are not included in Planned Committed, only once unless they are converted into a supply order (e.g. PO or released shop order) and connected or reserved to the project.
In our forecast process, ETC is currently set based on Planned Committed. This is leading to material under-forecasting, as large portions of standard planned demand are excluded. As a result, our Estimate to Complete can appear significantly understated in earlier phases of the project.
My assumption was that Planned Committed would reflect both:
• Project supply requests generated via MRP
• Standard planned cost associated with required BoM demand
However, it seems that this is not the case
Could anyone confirm whether this is the expected behaviour of Planned Committed cost in a project-manufacturing context with standard planned items?
Is there a configuration or alternative approach that allows the forecast to consider the full remaining requirement?
Would it be more appropriate to base ETC on Previous EAC or Previous ETC in an engineer-to-order model, however still need to understand planned committed as actuals can vary to the planned significantly.
I am particularly keen to understand clearly what is structurally included and excluded from Planned Committed, so we can determine whether our current forecasting logic is aligned with operational reality.
Many thanks in advance.