Engineer to Order Manufacturers
Taking On More While Improving Delivery Performance
Engineer-to-Order (ETO) manufacturers face a formidable challenge. They are either enjoying an increasing demand from their customers or facing increasing competition for market share. In these types of companies, they are unable to quickly flex capacity of key engineering and production resources.
These organizations, producing complex, capital intensive equipment, cannot simply stop taking orders when they achieve high utilization. Often, the business is cyclical. Refusing orders may mean refusing relationships that are beneficial in the next cycle. Because of this, these organizations must accept every order they can and deal with the ramifications in execution. What gets compromised is delivery performance and operating costs. Project lead times stretch and due-date performance plummets and in response, excessive expediting costs and lateness penalties rise. This not only hurts the bottom line, but also jeopardizes customer relationships and reputation.
ETO organizations need a solution to maximize their capacity and productivity while improving speed to market and delivery reliability.
For ETO Manufacturers, it is imperative to master the project management process to compete.
Mastering Project Management Behaviors
Although it may seem that the organization is at full capacity,
the reality is that a great deal of the available capacity is wasted
due to coordination mistakes. In many organizations, the
amount of lost capacity is close to 50%! Recovering the loss
of coordination between functions is the major opportunity in these
organizations. It appears as delays, expediting, and frequent
meetings to recover from these delays. The delays make it even
more difficult to manage; the work doesn’t appear when the resources
are planned on being available, so this capacity is lost. When
delays are recovered, and work does appear, the resources must react
to much shorter timeframes to accomplish their tasks.
All these peaks and valleys make for a very expensive and
stressful place to manage projects.
In addition, the push for sales makes it nearly impossible to
tell a client to wait. Therefore, every project must show
progress. This leads to the killer of useful capacity,
multitasking. Valuable resource capacity is consumed switching
among various tasks and is no longer available to perform the work.
Instead of moving projects forward, multitasking causes every
project to slow down; compounding the problem. The execution
system becomes clogged with work, and none of it is moving very
fast.
All this work makes project lead times longer and longer and
delivery reliability plummets.
The key to project management excellence is mastering effective
behavior while blocking ineffective behavior.
A Solution for ETO Manufacturers
The real solution is dealing with the behavior. We provide
a framework and process to identify and eliminate the ineffective
behavior and processes and substitute them for behaviors and
processes that work. We help you eliminate the coordination
mistakes and multitasking. Using our project transformation
process employing the well proven
Critical Chain Project
Management (CCPM) methodology, you’ll be able to achieve
the results you’re looking for in less than 6 months.
To learn more about our approach, contact us or call 972-899-1734.