Projects: Produce In-house
Producing products in-house as projects presents the same unique challenges no matter what industry you are in, and that determines what you need in a business system.
What challenges do you face?
If your company's projects includes companies that produce engineered or configured to order products or R&D programs that take place in your facility, your challenges are different than building a project onsite or providing standalone professional services. Manufacturing or R&D focused, you utilize expert engineers, a competent workforce, a reliable supply chain for materials, and facility capacity.
Whether you are building an airplane, ship, satellite, specialized equipment or parts, or are developing new products, you are managing a unique project business and that has specific requirements.
Unify Your Project Business
Microsoft and ADEACA built a comprehensive end-to-end business system for companies that produce products in-house as projects. This Unified Project Solution synthesizes all project functions inside the ERP. You gain access to real-time information so you can accurately forecast customer demand and coordinate the flow of material and capacity to deliver projects on time and on budget. We help you operate as lean as possible to keep control over your processes yet remain flexible enough to respond quickly to external factors.
Better Estimation & Change Management
Being a built in-house project-driven organization means you must manage and integrate your project budget from estimation and possibly through multiple scope changes across many disciplines. Your estimates are derived from multiple stakeholders and sources including operations and scheduling, procurement, machinery and labor capacity, inventory, supply chain and labor rates. Budget production units are used as a baseline for quantitative progress reporting and productivity indicators.
Your estimates must be time-phased as well for cash flow projections and Earned Value reporting. These estimates are rarely static, but are often amended to include design and engineering deviations or client scope changes.
Budgeting in ADEACA ONE
ADEACA ONE automatically aligns financial and operational plans to easily accommodate scope changes. A multilevel Cost Breakdown Structure allows you to manage your estimates at the right level of detail for each project to ensure effective job costing.
- Assume labor estimates directly from the schedule
- Directly apply production estimates to project budgets
- Transfer vendor confirmed prices from RFQs
- Incorporate contingencies for unexpected costs
- Always based on current rates and costs
Project Supply Chain Management
For in-house built projects, you need to ensure alignment between the project workshop, the production floor and procurement. You need project-driven MRP. It is critical to align the schedule with the downstream supply chain so you can identify required adjustments to production and procurement schedules when project timeline is altered and recognize material constraints against the project schedule when procurement or production schedules are changed. Failure to identify these constraints will lead to disruptions in production, and early detection allows for alternate sourcing options.
Automatic MRP Alignment with ADEACA ONE
Placing the project schedule, MPR, production schedule and procurement inside the ERP, means that ADEACA ONE automatically aligns projects from start to finish. This alignment enables managers to produce the most accurate project schedule the first time and keep interdisciplinary teams on the same page throughout the project.
- Auto align project schedule, MRP, production schedule and procurement
- Automatically monitor procurement and production delivery schedules against project plan requirement dates
- Easily detect material and production constraints through automated graphical notifications
Reduce Mitigation Costs
Even though these projects take place in-house under close watch, too often they continue unchecked until things go significantly wrong. Delays, quality issues and significant mitigations costs are experienced when resources and materials need to be reassigned between projects, work has to be subcontracted to meet deadlines, or significant rework is required.
Typically, the warning signs were evident but not discovered in time, allowing minor issues to grow into major problems.
Early Detection in ADEACA ONE
ADEACA ONE provides real-time visibility across your project portfolio so you instantly know when any part of a project is outside your managerial thresholds, leaving you with enough time to take corrective action.
- Proprietary sensor points automatically monitor project operations and financials, flagging deviations and trends
- Holistic company and project key performance indicators alert you to what matters
- Comprehensive risk & issue management across all disciplines
Proper Scheduling & Capacity Management
For in-house projects, an accurate project plan ensures the appropriate availability of engineers, designers, shop floor labor, equipment, machinery and materials, identifying early the current and future bottlenecks within the project and shop floor resources. Balancing utilization levels of labor, equipment and machinery, means maintaining a high level of utilization without exceeding capacity thresholds that lead to schedule disruptions and delays.
ADEACA ONE Centralizes the Project Plan
With ADEACA ONE all critical elements to your projects are centralized in the ERP, allowing the project plan to draw from these elements in real-time so it remains dynamically updated continuously. This architecture ensures alignment not only across individual projects but across your entire portfolio of projects.
- Central capacity pool manages equipment and labor utilization to identify bottlenecks across portfolios of projects
- Supply chain disruptions are automatically detected and reported as material constraints in the project plan
- Manage project and production capacities in a single integrated solution
- Schedule projects using infinite capacity, automatic or manual capacity leveling
- Analyze utilization degrees against resources, equipment and machinery
More than a Typical Month-End Process
Since in-house built projects can take weeks or months to complete, periodic assessments of progress, budget burn-rate, Estimate at Completion (EAC), risk and issues become a critical process in predicting the future success or failure of the project. You need real-time tracking of costs and commitments from production, procurement, timesheets, expense reports and inventory consumption. Standardizing the month-end process across the enterprise helps produce reliable and comparable performance metrics. You must continually evaluate project productivity, schedule and cost performance indexes, comparing trends to previous month-end results.
The Improved Month-End in ADEACA ONE
ADEACA ONE couples actual costs and commitments with quantitative progress indicators, enabling controllers to deduce critical performance metrics, such as productivity indicators, completion degrees, budget variances and margin at completion. Real-time data tracked against a multilevel cost breakdown structure means variances are instantly identified.
- Real-time reporting of committed costs from procurement and production
- Automatic synchronization of commitments and actuals from procurement
- Apply remaining work estimates from the schedule to automatically compute estimate at completion for labor
- Apply costing metrics directly to revenue recognition and earned value analytics
- Ensure a smooth P&L by accruing revenue based on real progress
- Periodic risk assessments and formalized check list drives corporate compliance and governance
- Establish productivity indicators based on production unit progress
In-House Project Success Stories
Real-time lean operations for in-house built project companies is possible, and as leaders in their industries our customers prove it every day.
Northrop Grumman is a $25 billion defense contractor with operations all over the world. It needed to streamline its project processes in its international subsidiaries while ensuring accurate and timely data flow to US management.
As a high-end optomechanical manufacturer serving a wide range of industries, including defense and aerospace businesses, project-driven Qioptiq needed fundamentally different information to manage and optimize operations than it could retrieve from a generic ERP system. Qioptiq needed to go lean. ADEACA checked all the boxes.