There are often unique challenges in manufacturing that require a tailored approach. Project Manufacturing is one such specialized area, where companies need to manage not only the production of custom products but also various labor-intensive tasks. Acumatica Cloud ERP steps in to seamlessly integrate Project Accounting and Manufacturing, providing manufacturers with a powerful solution to tackle complex projects efficiently. In this article, we’ll explore the how Project Manufacturing features of Acumatica streamline processes and benefit manufacturers.
What is Project Manufacturing?
Project Manufacturing is a manufacturing approach specifically designed for projects that require tracking labor tasks, as well as the manufacturing of customized assemblies for specific customer or sales orders. These assemblies usually cannot be reused for orders from other customers and often involve lengthy production cycles, sometimes lasting for months or even years.
Imagine a discrete manufacturer tasked with building a large custom boat or a trade exhibit manufacturer responsible for designing, engineering, and manufacturing a tradeshow booth. These scenarios involve numerous labor-intensive tasks beyond assembly, making it necessary to set up a project to track these tasks and manage the assembly process tailored to the specific customer’s requirements.
Integration with Project Accounting for Job Costing
Managing a production run that includes scheduling people, machines, tools, materials, and assigning tasks can become a complex project in itself. Acumatica Project Accounting enables businesses to perform these tasks in one continuous workflow. It allows for project estimation and tracking of actual costs against the estimated values.
With Acumatica’s Project Accounting, you can specify project quotes that include estimates for manufacturing tasks and a list of required items and parts. Once approved, these project quotes can be converted into projects. In manufacturing environments with Acumatica Manufacturing Edition, these projects can further transform into work or production orders.
Benefits for Manufacturing and Inventory Management
For manufacturers, setting up a project typically involves:
- Labor: Including design, blueprinting, engineering, assembly, and installation tasks.
- Components/Parts: Not directly involved in manufacturing but necessary for installation.
- Assemblies: Customized assemblies consisting of components, parts, and sub-assemblies.
Each assembly requires a specific production order with a distinct Bill of Material (BOM). In cases where sub-assemblies are involved, separate production orders and BOMs are created. Unlike traditional manufacturing setups, Project Manufacturing doesn’t rely on historical sales data or forecasts, instead using a “Make to Order” (MTO) approach.
Regarding inventory management, determining reorder points and order quantities is not based on historical data but rather on insights from new sales orders using common components, current stock, and purchase orders in transit. This approach ensures a just-in-time inventory system where components and sub-assemblies are produced precisely when needed.
7 Ways Acumatica Addresses Project Manufacturing Challenges
Despite its advantages, Project Manufacturing presents challenges related to timeliness and customization costs. Adapting to the unique requirements of each project can be time-consuming and costly, impacting project profitability.
Acumatica’s Manufacturing Edition provides solutions to manage Project Manufacturing effectively:
1. Efficient Bill of Material (BOM) Management:
Acumatica’s Manufacturing Edition simplifies BOM creation and management. It allows manufacturers to generate BOMs directly from project estimates. This feature is particularly valuable in Project Manufacturing, where custom assemblies require precise planning. With the BOMs seamlessly integrated into the system, manufacturers can ensure that all necessary components and sub-assemblies are included. Learn more here. Bill of Materia/Routing Data Sheet
2. Seamless Transition to Production Orders:
One of the key strengths of Acumatica is its ability to facilitate the transition from project management to manufacturing. When a project task is ready for production, Acumatica allows users to create production orders directly from the project task. This eliminates the need for manual data entry and minimizes the risk of errors associated with transferring project details to the manufacturing phase.
3. Material Management and Availability Checks:
Acumatica provides tools to efficiently manage materials required for production. Manufacturers can quickly check material availability to ensure that the necessary components are in stock. If materials are unavailable, the system enables users to initiate purchase orders promptly. These materials can then be allocated to the specific production order, ensuring that they are set aside for the project’s use when they arrive from vendors. Learn more here. Material Requirements Planning Data Sheet
4. Streamlined Inventory and Cost Tracking:
Acumatica’s integrated approach extends to inventory and cost tracking. As production progresses and materials are consumed, the system tracks actual costs, including labor, materials, and overhead. This real-time tracking provides project managers with up-to-date information on project costs, allowing for better cost control and project profitability analysis.
5. Simplified Integration with Project Accounting:
The seamless integration between production and Project Accounting in Acumatica streamlines financial management. Actual costs incurred during production are automatically reflected in project accounting, simplifying financial reporting. This ensures that project managers have a clear view of project profitability and can make informed decisions in real time.
6. Enhanced Visibility and Problem Solving:
Acumatica empowers users with enhanced visibility into project-related data. Project managers can drill down into project details, examine cost breakdowns, and pinpoint any issues that may arise during manufacturing. This transparency enables swift problem solving and better project management.
7. Reduced Manual Work and Errors:
By automating many of the data entry and tracking processes associated with Project Manufacturing, Acumatica reduces the reliance on manual work. This not only saves time but also minimizes the risk of human errors that can occur when manually transferring data between systems or managing project details in spreadsheets.
These 7 benefits are representative of the integrated approach in Acumatica that streamlines the project manufacturing process, reducing manual work and the risk of errors, and allowing manufacturers to adapt to changing project requirements with ease.
Project Manufacturing Made Simple
Acumatica Cloud ERP’s Project Manufacturing features provide manufacturers with a powerful tool to manage complex, customized projects efficiently. By seamlessly integrating Project Accounting and Manufacturing, businesses can streamline their operations, reduce costs, and ensure timely project completion. In a dynamic manufacturing landscape, Acumatica empowers companies to adapt and thrive, even in the most challenging project scenarios.
Would you like to know how Acumatica Manufacturing Edition can help you streamline your operations? Watch a manufacturing overview demo here and then contact us or call us at 440-498-9920 to learn more.