- 20 September 2017
Successful manufacturers need to be experts at process management. Understanding production costs, raw materials needed, and labor hours are all part of overseeing a process efficient enough to ensure customers receive high-quality products on time.
Engineer-to-order put your processes to the test. These customized projects use different resources and take employee time away from your traditional products. Lack of proper planning can result in product delays and disrupt the schedule of other orders. That’s why we’re going share our three tips to avoid new product delays and keep your operation running smoothly.
1. Understand the Costs of Delays
It’s not surprising that many manufacturing leaders see product delays in terms of cost, and how much that cost exceeds what was budgeted or expected. Each week of delay has a tangible dollar amount that can be attached to it. These costs are mostly fixed — an engineer-to-order project may cost you more than budgeted on labor when it isn’t done on time, but you’d be paying those employees to work regardless of the project. Instead, focus on lost revenue opportunity. That is, focus on quantifying the money that isn’t flowing in as opposed to the money that is flowing out. Does your project manager understand these costs? This shift in perspective can help employees understand the true value of your engineer-to-order projects and prioritize accordingly.
2. Plan Ahead
Engineer-to-order projects, by definition, are different from the products your company typically produces. Automatically assuming both have similar production times will only put you in a tight spot should unexpected issues come up. Proper planning is the best way to avoid this situation.
Your team should take a step back to consider all obstacles that could affect the order, such as technical and manufacturing feasibility (is my equipment able to accommodate this order without taking too much time away from other products?). Also, understand how these projects will affect your employees. How does the project’s timeline fit with other orders? Will overtime be an issue?
All special requirements should be worked out before production begins. This means working with the client to review plans and ensure everyone on their end is satisfied with the order. Once production begins, make it clear the order can’t be changed. Explain that needed changes can be discussed for a future order.
3. Encourage Team Collaboration
There’s something known as Schedule Chicken — the practice of project team leaders keeping production delays a secret until someone else admits they’re behind. For example, the production and software managers overseeing an engineer-to-order project may both be behind schedule. Yet neither one will admit it, hoping the other will confess first. If the production manager admits first, the software manager can place all the blame on them (“I was on schedule; production is the reason we’ll now miss our deadline!”).
This mentality is terrible for morale. Your employees should be working together, not hoping for someone else to fail first. Avoid this by encouraging collaboration from the start. Your initial planning meetings should include people across all departments. They can provide detailed feedback and raise potential problems that aren’t always seen from a higher level.
Ongoing collaboration also improves attitudes toward other departments. Unexpected delays can happen, such as equipment downtime. Managers should immediately notify you and other downstream employees of the delay. Workers will appreciate the notice, rather than expecting work that won’t come, and reduce resentment. In fact, these employees may be able to help find workarounds.
Getting a Handle on Engineer-to-Order
Effectively managing engineer-to-order projects requires a balance of prioritization, planning, and collaboration. Of course, leaders like yourself don’t have to develop processes from scratch. Project management techniques like Critical Chain Product Management (CCPM) help ensure your plant is efficiently using resources, including labor and materials.
And don’t forget about your ERP system! ERP can facilitate customized orders, from part specifications to customer notifications of completed orders. Cre8tive Technology is here to help companies like yours get the most out of an ERP solution. Engineer-to-order projects will put your systems to the test. Yet with the right know-how and resources, you can eliminate delays and turn these projects into a valuable profit stream for your company.