One of the myriad of appalling consequences that result from fitting an engineer-to-order (ETO) environment with a repetitive-oriented ERP system, which does not have, in the very least, a product configurator facility with generic items (encapsulating options, variants, and constraints), generic bill of materials (BOM), generic routings, or pricing functionality, is that the sales order capturing clerk has to contact the engineering department for a product code or for the price or cost of a product, sometimes waiting days for a response. Needless to say the standard master data becomes bloated because each product variant has to have a separate stock item code, BOM, and routing as if it was a standard stock item and not a once-off made customized product (for example, a special color or gauge thickness). As a result, the ill-fated user company would have to literally close down operations so that the entire place can participate in a dreaded stock-taking exercise with an item master printout as thick as encyclopedia and with less than 10 percent of listed items expected to be really stocked. This is without considering the likelihood of identical products having a number of different item codes as different people created new codes unbeknownst to each other.
As for the production planning aspect, the differences do not come only from days- or weeks-long lead times for repetitive items versus months- or years-long lead times for an individual project. Further, as mentioned earlier, a simple count and addition of the purchasing and manufacturing lead times will not determine the overall lead-time or time-to-deliver a project, since projects often have numerous product definition activities and commissioning and installation to arrange before and after manufacturing respectively. Also, it is not a mere scope of the planning that differs in repetitive and project manufacturing, since there are other major differences in the way that these environments approach planning.
First, project manufacturers tend not think in elapsed time, given they calculate effort. For example, if a project is estimated to have one hundred hours worth of installation, it could mean one person deployed for one hundred hours, or that it could be deployed much quicker with a larger crew. Establishing and managing a critical path is the "motherhood and apple pie" of project management. Critical path is that set of activities that defines the duration of a project, and these activities have very little float or slack, usually zero, and thus a delay in any critical path activity will delay an entire project. Still, losses in one area may be made up in another. For example, if design is budgeted to take a team of five people, and one falls ill and cannot be replaced, the design time overrun will be inevitable. However a project organization may decide to make up the time by increasing the applied effort in downstream manufacturing /or installation activities in order to hit the overall deadline.
Secondly, project manufacturers know that they cannot always be in control of the lead-time even if this project is nearly a repetition of the previous one. All sorts of issues can impact the plan to deliver even a simple project. Customer late with the design approval? Subcontractor late with the delivery due to a strike in its plant? Cannot get access to the site on the day we need it? Wide load needs a police escort? Welding can't be inspected on time? All of these have an impact on delivering the plan. Although some may not be controlled, all must be accounted for since they can profoundly affect the overall plan.
Thirdly, traditional MRP based systems work without priorities, but rather with time-phased, back-loaded scheduling and with the "oldest order first" principle. Advanced planning and scheduling (APS) and some other job dispatching techniques may use more advanced algorithms (e.g., critical ratio), but they do not really recognize a "rush job" logic (see Advanced Planning and Scheduling: A Critical Part of Customer Fulfillment). In other words, it is often difficult to see why any one job on the factory floor is needed or where it is going to go. Since their business is often more cyclic, project manufacturers want clarity and simplicity to be able to juggle priorities within the network of remaining activities. They demand that everyone knows what the critical path is within the plan today.
This is not to imply that in repetitive manufacturing planning and re-planning are simple activities, given one has to take the maximum or optimal utilization of plant, equipment and absorption of overheads into account. It is to say that project manufacturers have just as complex albeit an entirely different planning problem. As such they need a system that thinks in terms of applied effort, can plan for items and activities outside the bounds of the company, is clear to understand, and is flexible enough to cope with rapidly changing priorities and circumstances.
As for the production planning aspect, the differences do not come only from days- or weeks-long lead times for repetitive items versus months- or years-long lead times for an individual project. Further, as mentioned earlier, a simple count and addition of the purchasing and manufacturing lead times will not determine the overall lead-time or time-to-deliver a project, since projects often have numerous product definition activities and commissioning and installation to arrange before and after manufacturing respectively. Also, it is not a mere scope of the planning that differs in repetitive and project manufacturing, since there are other major differences in the way that these environments approach planning.
First, project manufacturers tend not think in elapsed time, given they calculate effort. For example, if a project is estimated to have one hundred hours worth of installation, it could mean one person deployed for one hundred hours, or that it could be deployed much quicker with a larger crew. Establishing and managing a critical path is the "motherhood and apple pie" of project management. Critical path is that set of activities that defines the duration of a project, and these activities have very little float or slack, usually zero, and thus a delay in any critical path activity will delay an entire project. Still, losses in one area may be made up in another. For example, if design is budgeted to take a team of five people, and one falls ill and cannot be replaced, the design time overrun will be inevitable. However a project organization may decide to make up the time by increasing the applied effort in downstream manufacturing /or installation activities in order to hit the overall deadline.
Secondly, project manufacturers know that they cannot always be in control of the lead-time even if this project is nearly a repetition of the previous one. All sorts of issues can impact the plan to deliver even a simple project. Customer late with the design approval? Subcontractor late with the delivery due to a strike in its plant? Cannot get access to the site on the day we need it? Wide load needs a police escort? Welding can't be inspected on time? All of these have an impact on delivering the plan. Although some may not be controlled, all must be accounted for since they can profoundly affect the overall plan.
Thirdly, traditional MRP based systems work without priorities, but rather with time-phased, back-loaded scheduling and with the "oldest order first" principle. Advanced planning and scheduling (APS) and some other job dispatching techniques may use more advanced algorithms (e.g., critical ratio), but they do not really recognize a "rush job" logic (see Advanced Planning and Scheduling: A Critical Part of Customer Fulfillment). In other words, it is often difficult to see why any one job on the factory floor is needed or where it is going to go. Since their business is often more cyclic, project manufacturers want clarity and simplicity to be able to juggle priorities within the network of remaining activities. They demand that everyone knows what the critical path is within the plan today.
This is not to imply that in repetitive manufacturing planning and re-planning are simple activities, given one has to take the maximum or optimal utilization of plant, equipment and absorption of overheads into account. It is to say that project manufacturers have just as complex albeit an entirely different planning problem. As such they need a system that thinks in terms of applied effort, can plan for items and activities outside the bounds of the company, is clear to understand, and is flexible enough to cope with rapidly changing priorities and circumstances.
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