Globally, the way organizations manage their businesses has changed drastically over the past couple of decades – two simple words summarize this shift.
Project Management.
It was a novelty to use Project Management as it applied to ‘special work’ that some organizations undertook. Over the past few decades, corporate leaders and professionals started to realize the ‘business value’ of project management. Additionally, institutions such as the PMI, IPMA, and OGC (UK) collaborated with multiple industries and offered standards in project management that ensured a smooth transition from theory to practice.
Today, if one were to observe, we are living in a projectized world.
And why not? There are countless success stories by organizations that have deployed the principles and processes of project management. It could be construction, software, pharmaceutical, engineering or professional services – these sectors have extracted profound benefits by making project management a core management competency.
Let us now talk about Manufacturing Order Management.
Manufacturing was (and continues to be in many cases) considered an operational activity – quite the opposite of project management. Manufacturing companies decided to manufacture products; customers would wait for the product availability to place orders, make payments and collect the products.
There have been radical shifts in the global manufacturing business dynamics, and today, the scenario is entirely different.
A majority of global manufacturing companies are operating on a ‘made-to-order’ basis, which involves the following dimensions.
a) Get a manufacturing order
b) Generate material requirement
c) Create material request
d) Quality inspections
e) Goods received note
f) Update inventory
g) Make vendor payments
h) Produce customer products
i) Conduct quality checks.
j) Dispatch to the customer location.
k) Collect payments
l) Management reporting
You may be wondering – what has changed?
Let me elucidate.
Along with a customer’s manufacturing order, the manufacturing firm needs to adhere to crucial delivery milestones. In many cases, if the manufacturing firm delays the delivery of the products, the manufacturing orders stands revoked by the customer.
In this context, firms need to transform their manufacturing order management process by applying the principles and procedures of project management which includes the following aspects.
a) Manufacturing Order Initiation
b) Manufacturing Order Planning
a. Scope
b. Schedule
c. Manpower Resources
d. Costs
e. Risks
f. Procurement
g. Communication
h. Quality
i. Documentation
c) Manufacturing Order Execution Tracking
a. Schedule
b. Costs
c. Risks & Issues
d. Others
d) Manufacturing Order Closure
a. Administrative & legal
b. Vendor Financials
c. Customer Financials
Are you thinking – well, we do all of the above and some that are unique to our organization and customers!
I agree!
But, here’s the question – ‘Is your manufacturing order management integrated digitally and seamlessly’?
Depending on the organizational maturity, we could expect businesses to run on ERPs, HR, Accounting, Engineering, and other applications that enable their day-to-day operations. However, when organizations undertake projects that deal with manufacturing order management, it is vital that all the relevant business functions collaborate digitally to drive process efficiencies and zero redundancies that ensure customer value delivery.
Functional digital integration and collaboration are where most manufacturing firms struggle day in and day out! Such a scenario leads to work duplication, redundant processes, human resource conflicts, and significantly lowered organizational capabilities, all of which impacts market competitiveness.
To address the above business challenges, business leaders must look to solutions that allow relevant business functions to collaborate throughout the manufacturing order management cycle. Additionally, such a solution should be flexible enough to cater to different types of manufacturing orders. Unless senior management fixes this critical piece of the manufacturing puzzle, teams will end up in a fire-fighting mode all the time forcing their customers to their competitors.
So, what is the way out?
Various software solutions can address individual pieces of the manufacturing order management puzzle. But, very few can offer a holistic solution that covers the entire spectrum of the manufacturing order management cycle. However, Kytes PSA is designed to deliver a digitally transformed and integrated manufacturing order management that is easily configurable to your specific needs.
Give KYTES PSA a try to see how it can transform your manufacturing world!
