Project Partners Blog

Oracle Project Manufacturing – Who Needs It?

By John D. May

Oracle Project Manufacturing manages the construction of large, often unique, items or structures that require custom design.  It is a comprehensive system that, especially if combined with Oracle E-Business Suite Projects and Project Contracts modules, provides a robust solution for project or contract-based manufacturers in the Aerospace and Defense, Engineer-To-Order, and Seiban industries.

Oracle Project Manufacturing helps you control a broad range of product designs and quickly respond to changes that may impact your contract planning, costing, and, execution.

Criteria to Review When Considering Project Manufacturing

Project Manufacturing primarily addresses the Engineer-To-Order (ETO) manufacturing industries.  These industries are characterized by building unique custom products and generally require specialize costing, scheduling and financial management.  Consider the following items to see if your manufacturing method is more repetitive or specialized.

Change Orders – Are usually limited within a repetitive environment while in a discrete ETO (Engineer to Order) environment can be numerous.

Products – Products are generally standardized in repetitive manufacturing while the discrete manufacturer offers unique, one-off products.

Pricing – Repetitive manufacturers are able to establish and manage consistent prices such as through a standard price list, while Discrete manufacturing generally rely on estimating and quoting prices based on the unique requirements of the given sales opportunity.

Components – Repetitive manufacturing generally rely on a relatively low number of components.  Within discrete manufacturing each sale may involve a unique bill of materials which may not be related to the next item, hence producing a high number of component items both within a specific contract and across the full spectrum of sold items.

Lead Times – Repetitive manufacturing is designed to product a high volume of like items that are readily available.  Discrete manufacturing is based on producing unique items which invariably take much longer to deliver, both the component parts as well as the final product.

Engineering – Repetitive manufacturing produce changes while ETO have significant changes.

Value – Repetitive processes are primarily used to produce low dollar value items while ETO generally involve high dollar items due to the significant uniqueness of the items.

Production Routing – Again because of the low dollar value, routing must be standardized in a repetitive environment.  ETO employs customized routings.

Shipping – At the repetitive end of the shipping routing, enterprises ‘build-to-inventory’ in anticipation of demand in order to then ship from inventory stocks.  On the ETO end of the spectrum, items are shipped directly for the work in process activities in order to deliver as soon as the item is produced.

Progress Measures – For repetitive manufacturing, measuring progress is based on standard measurements per item or lot, i.e. lead times, cost, etc.  Variances are tracked against this standard.  In ETO environments, because there is little or no ‘like-kind’ comparison of many items over a given time frame like in repetitive processes, variances are tracked based on cost budgets estimated at the beginning of the project.

Bridge Between Supply Chain and Project Management

Oracle Project Manufacturing offers a seamless bridge between supply chain management and project management activities such as program management, costing and budgeting, ensuring that you can always execute to a contract or project and keep track of your costs as you make progress.  This means that contract-based industries will greatly enhance their management processes by using the standardized integration of Oracle’s world-class applications.

If you would like more information about Oracle Project Manufacturing and what it can offer your firm, Contact Us.

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