26 October 2018

Criticality of Visibility in Project-Based Manufacturing

How Critical is Visibility in the Different Phases of Project-Based Manufacturing?

In their day-to-day business, Project-based manufacturing companies have several things to consider and look into – from detailed tracking of projects, costs and tasks to ROI (Return on Investments). Therefore, visibility in such a complex environment plays a critical role. The success of a project-based manufacturing business starts from creating a good quotation. The quotation also known as estimation is getting accurate and timely product cost estimates of materials/parts/sub-manufacturing components from a sub-contractor or vendor. This could be a deal breaker or a deal maker as your customer’s time to market depends on it. A clear, straightforward quote can allow you to make an educated, informed decision for your next purchase as it gives a true picture of the costs to ensure expected margins. Modern tools and applications let you communicate with your sub-contractors or vendors to procure the material costs to be included in your quotation. In this phase, visibility into the history is very important as it helps calculate costs based on previous learning and best practices. Also, with visibility into real-time costs can help you turn the quote around to your customer quickly and estimate a fair profit margin that can be earned.

Once the quotation has been agreed upon, the execution phase starts, which can further be divided into – design, manufacturing, and installation.

Design phase  
The goal of this phase is to design the product and have a detailed understanding of the manufacturing and installation phase. As this phase entails very close involvement from the customer, it results in project change orders.

Project change orders entail many aspects – accurately managing resources, forecasting the number and capacity of engineers to be utilized. Having clear visibility helps in optimizing these resources and ensuring an on-time delivery. In some cases, we see that change orders come in without revised deadlines, which in turn makes the on-time delivery, impossible. Visibility, in such cases, minimizes risks and mitigates the possibility of something going wrong.

Manufacturing phase
The design phase moves to the manufacturing phase with final design approvals from the customer. In this phase, the product specifications are worked out in more detail. This phase takes into account two aspects – equipment utilization and resource utilization making it more complex than the design phase. Visibility into the efficiency of the equipment is a critical factor for the success of this phase and the project. Applications like preventive maintenance are available today that mitigate the risks of having any last-minute failures ensuring on-time delivery. Visibility would enable you to have data-driven conversations with your customers, in case there is a timeline challenge and the customer wants to go to market sooner than you estimated.

Installation phase
The installation phase involves many inventory items that the team uses for installation making visibility very crucial as it includes each item that aid in installation. Visibility enables forecasting ability of the costs and optimizes your inventory, preventing wastage.  This visibility is further powered by data. Data is fundamental to the three phases. Timesheets from the project engineers, resource and machine utilization until the installation phase, training post utilization – there is a sea of data that is available. It is important to have capabilities within an organization to bring all these data points together as it contains a wealth of strategic information that can be used for decision-making.

In a project-based manufacturing business, through enhanced visibility, manufacturers can gain several benefits in the form of resource and cost savings. Know more on how To-Increase’s Advanced Project Management for Microsoft Dynamics 365 for Finance and Operations allows end-to-end Visibility in Project-Based Manufacturing, thereby improving productivity, efficiency, and the cost to profit ratio.

Talk to our expert to learn more about our solutions

Luciano Cunha
Luciano Cunha,
Luciano Cunha,
Chief Executive Officer (CEO)

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