Scope Management Ensures Profitable Delivery of Manufacturing Projects

Jun 17, 2014 6:00:00 AM

Migration-Microsoft-Dynamics-365 Enterprise

In project-based companies that perform manufacturing or construction, scope changes can make all the difference between profit and loss on a project, and also between fully meeting a customer’s needs and not achieving optimal customer satisfaction. When scope changes are not managed well, they easily turn into scope creep, a frequent reason for projects to come in at a loss, late, and with poor customer reception. However, when you perform scope management with To-Increase solutions, you can ensure that scope changes maintain the profitability of projects and happy customers.

There are many reasons for scope changes during construction projects or in project-based manufacturing, and project-based companies run into them more often than not. Customers’ understanding of their own needs may evolve, for example. Materials may suddenly become unavailable, subcontractors and vendors might experience problems, a construction site might present unforeseen conditions, and public-sector clients might move in a different direction following a change in elected officials. Thus, scope management can be a complex and costly challenge. However, when you give scope management the proper attention and do it right, it can also boost your margins, because the margin of additional work in many jobs and projects is higher than in the work you quoted originally.

Scope Management Maintains Control of Project Details

In To-Increase Advanced Discrete Manufacturing and the To-Increase Construction Solution, you find the capabilities to perform complete scope management, taking care of the myriad details involved and with full traceability of scope changes to contractual agreements. At any time, you can review your projects and see which part of a project and its budget is original and what is the result of change orders handled through scope management. When consecutive change orders amplify scope management into multiple sub-projects, you can still maintain complete insight into activities, resources, financials, and applicable contracts. That also helps you to keep projects and sub-projects moving along timelines customers expect you to follow.

When scope management results in additional or modified activities, you can work within the To-Increase solutions to document and manage approvals from internal and external stakeholders, including subcontractors and customers, just like you do with your primary projects. You can also use our solutions to manage your resources for these follow-on projects, and create the workflows that keep projects moving efficiently. When the amount of project activities increases because of scope management, you can manage these activities as distinct from other project components, and you can always track their origination and performance as separate entities within a project.

Full Visibility and Flexible Pricing Schemes

We aim to make scope management as flexible and controlled as possible. The scope management in our solutions gives you full visibility and control over pricing mechanisms, so you can run, for example, a project as fixed-price while performing a portion of the additional work on a time-and-materials basis. Often, project-based companies will bid an original project at a loss in hopes to win the business, in the certainty that scope changes will definitely happen. By using Advanced Discrete Manufacturing or the Construction Solution, you can implement profitable cost structures for such sub-projects without a dependency on the original project parameters.

To simplify your scope management with the To-Increase solutions, you can assess scope changes visually through a Gantt chart.

Scope Management

It would be great to hear about your experience in performing scope management with our solutions, and receive your feedback and questions as well. Please get in touch by filling the form below.

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About Author
Herbert van de Ridder

Herbert van de Ridder

Product Manager, Discrete Manufacturing As product manager, Herbert is responsible for aligning the planning, development, release milestones, and road map of several To-Increase solutions with the business needs of customers in manufacturing and other industries. Herbert’s experience with enterprise resource planning and industry-specific solution spans 15 years. His main areas of expertise are discrete manufacturing, logistics, and evolving trends in industries and markets. In his career, Herbert has managed large teams of people delivering business software solutions and related services. He has also performed implementation consulting for global enterprises and spent several years in optimizing product development strategies.

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