Job-Costing in a Busy Shop

      How do you keep track of labor hours per job, when workers are always jumping around from project to project? October 25, 2006

Question
We have been in operation a little over a year... moldings, entrance doors, and a good variety of other millwork items. We usually have five projects underway at one time. What is the most successful way to track job cost - labor, materials, and such - and then have them interjected into software to create an accurate summary? We have problems tracking labor, as a multitude of items are attacked at once and men are shifted from one task to another. Popping in and out of the time clock doesn't get it. I've created all different kinds of papers and clipboards. Then there is the material both bought and used out of inventory. I want to see the jobs independent of each other. On some, the price is fluid and I tend to create a number at the end of a project.

Forum Responses
(Business and Management Forum)
From contributor D:
We have been using J-Mos software for awhile now and it has been working out very well. Individual jobs are tracked right from the shop floor. Multiple jobs a day for one mechanic. Take a look. Maybe it will help you out.



From contributor V:
I have had the same problem here in our shop. You're right about the time issue. When you have guys swapping between projects, running multiple projects at one time, doing shop maintenance, etc., it is hard to impossible to track actual job cost, short of having every one carry job sheets and sign in and out on their sheet for time spent on a job, or have the floor manager keep track as employees are assigned.

There is a lot of good software out there, but it doesn't solve the underlying time problems that we run into. I might add that general shop maintenance and cleaning should be counted as job time, because you made the mess doing the job, now you have to clean the mess because of the job. Therefore, it is actually part of the job and someone has to pay for the time. Just like ordering supplies for the job and selling the job, billing, etc. There are a lot of time factors people don't consider or don't want to count toward a job, especially when it makes the job cost go up. But when you think about it, if you don't count all of the costs, you don't actually know what it's costing you or you end up feeling like anything not related to the actual manufacturing of the job is being paid out of your pocket.



From contributor C:
I am very interested in checking out this J-MOS software. This a big problem in our industry. All comments so far are right on. We try to make the foreman summarize at the end of each day, which is a compromise at best, but it at least accounts for every man hour. If you don't count every cost, it just comes out of your pocket at the end. Especially the intangible hours unloading trucks, maintenance, etc.


From contributor T:
Perhaps you should take a look at Trade Soft. They have a great product and are easy to work with!


From contributor L:
The only way to account for all time is to record it. Paper recording requires someone to manually summarize. Software requires data entry (prone to errors and represents double handling of the info). We bought software and put computer terminals near every area of the shop. It does take time to have the employees enter info, but less time than double handling it. How much is that info worth to you? If you use the same assumptions (for the next job) about how long something takes, and that is too little, you just paid a price for the lack of info.

Whatever software you choose, it should be easy and quick to enter data. The data should be in a form that is easy to manipulate into usable information. Ours uses the 3 initials of the employee as the ID. All the jobs are listed on screen with their associated operations (ass'y, lam, finish, etc. and estimated times). By clicking "start," the software starts tracking the time for the selected job/operation. Payroll is done automatically from this info. Reports can be generated for about anything you want to know. One useful report is "Time Variance," i.e. how much time the employee was logged in and how much of that time was spent on actual jobs (as opposed to pushing a broom, etc.) Every other Wed., the management gets together and reviews the results of all jobs that have shipped and been closed out in the last 2 weeks. If there is an obvious problem, the shop foreman can often account for it. (Employee logged into a job but didn't log into the next version of the same job, so lots of time on one and none on the next.) It does take time, but seems to be less time than our old method of paper time sheets (often difficult to read, filled out at the end of the day and not as the work was done, extra time "on the clock," but really not present).

Computers are cheap. Our software is too expensive, but there are others out there that make for better ROI. The system is not foolproof, but the training is easy and the information relatively accurate. For there to be a ROI, you need to use the information you gather!



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