Post-calculation

In post-calculation, the booked hours, the material used, the scrap and the outside costs of a finished order are compared with the original estimate. The outcome is a difference per operation: where was the estimate off, and by how much.

What it means for the calculation

This is the only step that makes a calculation checkable. Without it, a time standard stays an assumption that repeats itself order after order. With it, it becomes visible whether the difference sits in one operation or is spread across the whole routing, and whether it comes from the time standard, the rate or the material. For an owner it is also the most honest measure of which customers and which kind of work really carry margin.

Where this comes up

In a shop's own system, as the difference between planned and booked hours per works order, and in the periodic review of margin per customer or per type of order.

Common mistakes

Comparing only the order total instead of the individual operations, where an overly generous and an overly tight standard cancel out and nobody learns anything. Also explaining a difference without checking the bookings: a forgotten stop looks exactly like an operation that ran long.

What is the difference with pre-calculation?

Pre-calculation is the estimate beforehand; post-calculation is the comparison afterwards.

How often should you post-calculate?

On new parts and on orders that stand out; doing it on everything costs more than it returns.

What do you do with the difference?

Adjust the time standard, the rate or the material assumption, and record why.