Value of Visibility and Planning in an Engineer-to-Order Environment

Engineer-to-order industries are a special kind of a manufacturing industry wherein every order is custom and is managed as a project. Planning in these industries is typically done using traditional CPM techniques and likely in silos across various departments. Hence these industries are plagued with poor due-date performance problems and resource overload problems. Effective tools will help better manage these issues and improve operational performance. The paper below discusses these issues through the case of one such company that specializes in making equipment for the beverage industry and their attempt to address the problem. The solution involves better management of the entire lifecycle of the orders. Due-date quoting is improved by taking resource capacity into consideration. Better project planning tools are provided that provide resource and material constrained project plans. The planning scenario involves a multi-project planning with shared resources and the objective is to maximize the enterprise throughput. Emphasis is placed not only on enterprise wide project planning, but also on problem visibility that empower planners to better collaborate and resolve problems (project delays and resource capacity variations) as they come up. The problem visibility and advanced optimization technology provided enable the company to realize valuable savings and improve customer satisfaction. In its nature of being project based, the engineer-to-order industry is similar to construction industry. Analogies and extensions to the construction project management industry are discussed along with the potential value to be realized. But the supply chain differences between the two industries lead to problems and limit immediate adoption. Issues on how to rethink the construction supply chain to realize some of the hidden value is also discussed.