Converting Cost Levels in JD Edwards

Edward Gutkowski, Chief Architect - RapidReconciler

When setting up a new item master, one of the parameters that must be considered is an item's cost level. Simply put, this specifies the granularity of control to be maintained:

• Level 1 – Maintain at the item level. The cost is the same for all branches, locations and lots and is the easiest to manage.
• Level 2 – Maintain at the branch level. The cost can vary for each branch plant, but the locations and lots within that branch are the same. This is the most common selection.
• Level 3 – Maintain at the location/lot level. The cost can vary for each location/lot. This is the most difficult to manage.

These levels are decided, after much thought, prior to creating the item master. The choice depends of course on business requirements and the type of item being produced. The code is set on an item by item basis.

But what happens when you decide to change the level? How do you do that in JDE? Do you just go to the item master and change the code?

No, no, no, no … and by the way did I say NO! In order to change a cost level properly, there is a process that must be followed. This process is required regardless if you move the level down (e.g. from 1 to 2) or up (e.g. from 3 to 2). The system may let you change the code but you will be doing yourself a disservice if you do that.

The main reason for the process is the architecture of the data in the 2 primary cost tables, F4105 and F30026. The data is stored based on the cost level of the item as shown in the table below.

The structure of the data must be change in accordance with the level. Let’s say, for example, we want to change the level of item 12345 from 3 to 1 to more easily manage cost changes. In our level 3 example, the item has different costs over multiple branches and lots. Level 1 means that can be only 1 cost for all. Which cost is used? How do journal entries get created for any differences? What I can tell you first is that just changing the level on the item master will NOT do any of this!

Fortunately, JD Edwards has a program for this that will run in proof mode to give you the opportunity to see the impact of any change and correct any errors. More information on this is available at https://docs.oracle.com/cd/E26228_01/doc.93/e21560/convert_cost_levels.htm#WEAIM718

Check it out if you need to perform this kind of change. Don’t just change the item master code!