Key challenges
In an engineer to order (ETO) manufacturing environment, customer requirements for a finished configurable product (e.g. ships, locomotives, turbines, mining machines, conveyors etc.) are always unique and the final products always require some degree of engineering and design.
Manufacturing companies must be flexible enough to be able to customise their products to satisfy customer-specific requirements while remaining in control of engineering and design standards, costs, manufacturing delivery dates, resource and capacity availability etc.
Complex ETO manufacturing processes are managed as a project and usually go through the following lifecycle phases:
- Preliminary engineering and design
- Cost estimation, tendering and customer quotation
- Detailed concurrent engineering and design based on customer requirements
- Material requirements planning
- Resource and capacity planning and load balancing
- Procurement of sub-contracted services and materials
- Advance procurement of long lead items
- Production scheduling in relation to completion of engineering tasks and available capacities
- Production order execution coordinated by project dates and quantity requirements
- Forecasting of final estimated cost at completion, profits and revenues
- Engineering change management and project variations and issue management
- Customer billing
- Profit recognition
- Monthly reporting of project KPIs, progress, variations and issues
In ETO manufacturing, the quotation process must be based on cost estimation of the complex product structures including engineering costs, costs of standard components and components to be designed and engineered, risks and contingencies, price escalations etc. The cost estimation must be produced before MRP and production orders are created and must be used as a basis for project budgets and revenue plan.
While customer-specific manufacturing is taking place, the large portions of work on the shop floor, usually associated with manufacturing of standard components and assemblies that have no specific customer requirements.
Every ETO process usually includes make to order (MTO) and even make to stock (MTS). The degree between ETO, MTO and MTS varies in different industries and companies.
Production orders of assemblies and sub-assemblies are scheduled and executed in coordination with project activities, which feed required quantity and completion dates down to production order management system.
The completed project final cost includes cost of engineering and design, as well as production variances associated with production of customer-specific production orders (ETO and MTO).
The biggest challenges in managing manufacturing projects are the ability to coordinate:
- Performing cost estimation based on bill of materials at various stages of a project’s lifecycle (from tender estimate to final detailed design)
- Breaking up project WBS structure into assemblies and sub-assemblies, estimating costs on lowest WBS levels based on production costs of assemblies and components assigned to network activities
- Allocating detailed budget on labour, materials, services to project WBS representing assemblies and sub-assemblies
- Creating schedule of work in coordination with capacities available at the shop floor
- Defining long-lead time equipment for advanced procurement
- And more
- Allocate high-skilled professionals (e.g. engineers, designers) to various engineering activities across multiple projects within your organisation
- Review shop-floor available capacities vs booked capacities by other approved projects to avoid capacity over commitment
- Generating production orders from material requirements stemming from project activities
- Scheduling and coordination of multiple production order across all running projects
- Project re-scheduling due to capacities bottlenecks or delays in procurement
- Dashboard view and management of all PP orders for a single project and multiple projects
- Maintaining complete visibility across a project’s entire actual cost collected through production orders, engineering costs collected time sheets, purchasing commitments for materials and services purchased directly to project etc.
- Forecasting cash flow to make sure projects stay cash positive at all times
- Accurately managing project cost to complete and the ability to generate project forecast cost and forecast profit at completion
- Keeping track of all engineering changes and their effect on project costs and profitability
- Keeping track of project variations, budget transfers and adjustments between WBS elements with complete audit trail history
- Estimating costs and revenue of budget variations and seamlessly integrating them into project revenue plan, budget and forecasts
- The ability to manage project contingencies and report them separately from variations affecting project budget
- Reporting on project financial KPIs (e.g. cash, budget, forecast at completion, open orders, forecast profit margin etc.)
- Project financial history snapshot and analysis of budget, forecasts at completion, revenue and profit changes over time
Noveco provides solutions for manufacturing projects
SAP PS enhanced with Noveco provides an integrated set of industry-specific solutions designed to manage every aspect of your manufacturing project seamlessly and effectively.
To streamline management of complex ETO tasks, Noveco integrates engineering, estimating, product costing, resource and capacity planning, manufacturing, procurement, customer billing, production capacity requirements, inventory management, cost control and dates scheduling.
Many leading companies are implementing complex SAP ERP solutions to enhance their capabilities in the following areas:
Accurate cost estimation using bills of materials of existing assemblies and engineered components
Accurate project planning including project structure, cost planning and scheduling
Resource and capacity planning across multiple projects
Forecasting of project costs, resources and revenues, to provide visibility of forecast profit margins, cash in and out
Measuring and reporting progress, earned value and productivity based on progress of manufacturing
Variations, escalations and seamless integration with cost forecasts and revenue planning
Integration of subcontractors, monitoring of work performed, progress reporting
Accurate billing and invoicing
KPI monitoring and relevant reporting
What Noveco does that SAP standard does not
Noveco integrates production orders into project planning and forecasting, which means:
- Project planning is done on the project level: on WBS or Network Activities
- Detailed work planning, execution and confirmation is done though work orders assigned to project WBS or Network Activities
- Forecasting remaining work and costs to complete is performed on WBS taking actual work and costs from assigned production orders
Noveco simplifies SAP PS, while enhancing functionality.
- Quickly and easily create estimates directly in SAP by copying estimating templates or previously created estimates
- Create as many estimate versions as needed to simulate different scenarios
- Include Bills of Materials (BOMs) and their product costing into Cost Estimating
- Standard BOMs with standard routings
- Sales Order / Quotation BOMs and routings
- Configurable BOMs for Sales Order / Quotation
- Use flexible formulas to calculate price escalation, surcharges, risks, contingencies and profit margins
- Maintain estimating structures different from project structures
- Transfer estimated costs and revenues to project structure by drag & drop. This way you can automatically create project costs and revenue pan in SAP PS without typing it manually
- Compare Estimated Costs vs Project Forecasts and Actuals at any time during project lifecycle
Plan individual resources across projects and work centres directly in SAP PS. Integrate your resource and capacity planning with Project Forecast and HR.
Noveco Resource functionality has been specifically designed to allocate individual Resources in the most easy and intuitive way across your projects. It does not inherit Work Force planning from standard PS.
Noveco Capacity Planning functionality has been specifically designed to review and allocate capacities across different projects. It does not use SAP standard Capacity Planning due to its highly complex configuration, user interface and conflicting capacity management functionality between Project Network Activities and PP orders.
Noveco resource management and capacity planning enables you to:
- Plan resources (high-skilled professionals) across your projects using our easy and intuitive user interface with:
- powerful graphical representation
- Drag and drop allocations
- Group allocations
- Drill-down reporting and analysis
- Review and allocate available capacities of your shop-floor work centres to avoid over commitment or offering unrealistic dates to your customers
- Perform cross-company resource allocation
- Review how resources have been used in past periods with graphs and charts (compare allocated hours vs actual hours or available hours vs actual hours)
- View hourly cost rate used to plan work on project and persons cost rate of each that will be used to charge actual costs to project
- Drill-down to approved time sheets
Integrate to CATS (cross application time sheet) work list from Noveco resource allocation
With Noveco Project Manager Workbench you can
- Review Project KPIs in a graphical dashboard
- Automatically calculate project Cost To Complete (CTC) and Estimated At Completion (EAC) based on actual costs and purchasing commitments posted to your project WBS or Network activities directly or to production orders
- Automatic recalculation can be run for multiple projects overnight as a background job saving project managers time of doing it manually in Excel sheets
- Manually adjust CTC and EAC directly in SAP using Project Manager Workbench
- Distribute Costs and Revenues by period
- Single point-and-click to drill down to source documents assigned to your project directly or to PP orders: purchase orders, goods and invoice receipts, time sheets etc.
- Instantly integrate project EAC with project Results Analysis for accurate Profit Recognition
- Forecast project Cash In and Out based on open PO Commitments, uncommitted Costs and Revenue plan
- Automatic project forecast history tracking
- Instant and immediate integration with SAP without any interfaces
- Plan costs and revenues within one variation document
- Assign variation costs to multiple project elements (WBS, Network Activities and orders) within one variation document
- Control status of variations (e.g. Pending, Approved) with automatic cost allocation to assigned project elements (WBS, Network Activities. Project current budget and cost to complete are updated depending on variation status
- Sales document update with revenue adjustment from variation document
- Contingency management in complete integration with variations, budgets and forecasts
- Full integration with project cost forecasting and reporting
- Create Risks Threats and Opportunities with probabilities and their expected values to simulate various scenarios on impact on project KPIs
Provide instant visibility into your manufacturing projects, enabling you to analyse, forecast and report directly in SAP without need for Excel spreadsheets.
- Graphical KPIs with configurable layout
- Report on all project financial information including Progress and Earned Values past, current and future
- Various reporting layouts provided: Graphical view with dynamic navigation, list view, period view
- Download to Excel or use Excel in place view option
- Full history of project KPIs: Budget, Forecast Cost At Completion, revenue values etc. See how your project(s) have evolved during their lifecycle
- Drill down to the source documents
- Always the most up-to-date real-time data directly from SAP
Project Schedule using relationships and duration set in network activities.
Noveco Gantt Chart provides the following key functionalities:
- Graphical representation of project WBS, Networks, activities, relationships, milestones, maintenance and production orders
- Reschedule maintenance and production orders by changing dates of related project WBS or network activities
- Schedule project sections by drag & drop
- Drag & drop or stretch network activities to reschedule all related project elements automatically
- Schedule only part of the project by simply selecting project element and clicking “Schedule” button. The system uses concept top-down and left to write scheduling leaving top elements not affected.
- See Plan and Actual POC on project chart instantly
- Actual duration, Earliest and Latest dates
- Set Date Constrains and fixed intervals between activities
- Automatically re-distribute project costs and work demand
- Complete and seamless integration with project dates in SAP PS
Built Inside SAP
Directly Into SAP ECC Or S4 HANA-No Interfaces, No Middle, Always Real-time
Our Customers
Noveco is a suite of software programs developed with extensive
industry experience and deep knowledge of SAP functionality
