Project based manufacturing is the most complex when compared to other types of manufacturing. Projects often begin as a concept, which later transform to become a reality by combining several assemblies/sub-assemblies with several bills of materials and steering instructions. Project-based manufacturing entails taking the existing standard manufacturing process and segregating the value chain by control, execution and planning. It is used when there is a need for a complex, unique product that requires a specific process to produce efficiently.
Project-based ERP systems need to be able to handle more than just the scheduling and engineering planning that most people associate with project management activities. A project-based ERP should handle everything project-based. ERP in a project environment should handle areas from tracking earned value in support of revenue recognition to detailed tracking of costs by project and task.
We have been providing our customers solutions to manage their Engineer-to-Order, Make-to-Order, Configure-to-Order and Assemble-to-Order businesses for many years. From our experience, some of the key concerns for project-based manufacturers:
No surprises - When the end-of-project audit shows a project was less profitable than planned, it is a complete failure.
Late milestones - Late deliveries are an issue for any company, but missing milestones in a project scenario means that your invoicing doesn’t happen on time. That typically leads to immediate cash flow issues. Removing this unpredictability means removing the burden of carrying heavy cash reserves to cover for these situations.
Over budget - Not much needs to be said here. Just a plain lack of timely visibility is a huge problem.