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" Meeting the complex software needs of project-oriented manufacturers with easy-to-use solutions is all we do. And because we spend time everyday with companies like yours, no vendor knows your business better. Which is why, even when you have mixed-mode requirements that call for ETO, MTO, MTS, ATO and BTO manufacturing, our Finesse ERP software has you covered like no one else. "
Source : Enhanced Systems & Services
Scheduling Resource Demand in a Concurrent Engineering Environment
Make-to-Order (MTO) is also known as :
Build-to-Order,
MTO,
Configure-to-Order,
CTO,
Make-to-Stock,
MTS
Customized Products,
Customer Specific Parameters,
Order Capture Tool,
Work Order Costing,
Pick to Order Model,
Order Capture Tool,
Work Order Costing,
Pick to Order Model,
Plan Complex Models,
Order Requirements.
Manufacturers producing capital equipment and highly-engineered products face far more challenging design, production and delivery obstacles compared to discrete
and repetitive manufacturers. Due to the length of time required to engineer and produce these complex products, often months or years, the entire process eclipses the
scope of a job and is referred to as a project. This White Paper will discuss one of the more challenging daily activities encountered by these project-oriented
manufacturers: scheduling projects and resource demand in a concurrent engineering environment.
Frequently, the engineering phase is as lengthily as the procurement, manufacturing and shipping tasks. In order to fulfill customer delivery schedules these companies
must begin material acquisition and production activities as soon as parts, sub-assemblies and components have been designed. This process is referred to as
concurrent engineering since the product is simultaneously designed and produced.
Similar to Make-to-Order (MTO) and Make-to-Stock (MTS) companies, these project-oriented manufacturers need to schedule resource demand, (planned and firm),
as soon as possible. The challenge is allocating the time required for each department, phase and task because this product configuration has never before been
designed or manufactured. The following scenario examines this situation and the corresponding solution.
An ETO (Engineer-to-Order) project is estimated to require 1000 hours of parts manufacturing. The parts are designed by engineering as the project progresses
through the engineering phase. In order to provide the best delivery time to the customer, engineering will issue several partial releases to manufacturing so production
can begin as soon as possible. How can the initial 1000 hours of manufacturing be reserved before parts, sub-assemblies and components are defined?
During estimating the following hours are recorded:
| Project |
Resource |
Hours |
| 1- Engineering |
Project Manager |
5 |
| 2- Frame |
Engineer
Drafter |
20
5 |
| 3- Electronics |
Electronic Engineer
Drafter |
50
10 |
| 4- Mechanics |
Mechanical Engineer
Drafter |
50
10 |
| 5- Manufacturing |
Project Manager |
25 |
| 6- Frame |
Cutting
Bending
Assembly |
500
50
75 |
| 7- Electronics |
Wiring
Testing |
75
75 |
| 8- Mechanics |
Fabrication |
300 |
| 9- Assembly |
Final Assembly |
90 |
Project Scheduling calculates the time for each step based on hours required, the available resources and the relationship between the project activities. This gives
engineering and manufacturing the visibility of up-coming projects as well as providing a promise date to the customer. Notice that the critical path is to engineer the
frame, manufacture the frame and then final assembly. The ERP system would actually try to delay the electronic and mechanical engineering activities, but these
activities can float if resources are not available.
While the project is in engineering, the software is helping to keep the schedule on track by looking at the engineering resources consumed and available to complete
the engineering activities. When the engineers release the Frame drawing with its Parts/BOM/Routing, the Manufacturing Frame task (#6) changes from planned to
firm. At this point, the estimated hours are replaced by the routing hours and the top level part is designated as an MRP demand that needs to be completed on task´s end date. MRP then drives to keep the building of the Frame on schedule rather than the Projects´ scheduling module. However, it is still tied to the overall
schedule by being tied to task #6. Therefore, concurrent engineering on the other parts of the project can continue and be scheduled while making the frame.
Some ERP vendors´ answer to this problem is to create Parts/BOMs/Routings during estimating or for engineering rather than using project scheduling. This
approach is ineffective. Others offer something only for manufacturing but not engineering. This does not create a synchronized schedule. And that creates problems. It would be the same as only scheduling the last few routings rather than all of the routings. What you end up with is out-of-schedule preliminary
operations that cause the later routings to play catch-up or to rob from other jobs or to increase inventory.
The APS system then needs to include the engineering schedule and the remaining hours in the estimate as well as the manufacturing schedule. Manufacturing will
then see the projects that are about to enter their area and will be able to schedule accordingly. They will also have the capability of seeing estimates that have a 95%
probability, if desired.
As partial releases are made engineering must communicate the remaining demand to manufacturing. This is done as engineering releases routers, along with the
corresponding time requirements, which replaces the estimated demand.
Next, manufacturing needs to reserve the remaining hours required for the project. There is already a soft reserve when the estimate is turned into an order.
Manufacturing can create a harder reserved status by firming a project or project task. The routings, when released by engineering, create another level of reserve.
However, if a customer decides to delay it´s project for six months the projects module will reschedule creating new reserved dates for estimated hours and will
change the end-dates for routings that were released by engineering.
Finally, the system must allow you to have a part reserving capacity in manufacturing based on the routing, but flagged do not build until released by engineering.
Just like capacities, parts can also be entered in the estimate. They can then be replaced by the Parts/BOMs/Routings created by engineering. The same reserving
capabilities exist for parts as described above for capacities because project scheduling just considers it another resource. Resources can be machines, parts, people,
space (square footage), tools, etc.
In order for Project-oriented manufacturers to operate efficiently they require a resource scheduling tool which will allow them to place demand on materials,
workcenter capacity and labor as soon as it becomes known. It is absolutely essential to reserve these critical resources in the estimating and engineering stages
without the waiting until BoMs and routings are finished. This capability frequently determines whether projects are delivered on-time, within budget and asspecified.
Enhanced Systems & Services, Inc. has been providing ERP solutions for project-oriented manufacturing since 1983. The privately held company's flagship product,
Finesse, is targeted at organizations that manufacture capital equipment and other highly-engineered products. The leader in its market, Enhanced Systems & Services
serves hundreds of customers across the globe in industries such as factory automation, aerospace and defense, transportation, energy and environmental products.
Customers include GKN Aerospace, Ebara Technologies, AAR Corp., Halter Marine, Signal International , KHS Klockner and many other companies that require a
project-oriented, enterprise-wide business application suite. For more information, call 303-425-1237 or visit the company's website at www.essfinesse.com