9 Things to Master as a Manufacturer in Government Contracting

November 18, 2022
manufacturer in government contracting

Not every company has the luxury of being able to mass-produce the same product and satisfy the needs of all customers.

Apple, for example, might be able to design a handful of iPhone models and rest comfortably knowing that they have a product line that appeals to customers of all types. On the other hand, companies that undertake bespoke, engineer-to-order or make-to-order manufacturing projects don’t enjoy the same economies of scale that mass production delivers.

To produce products that are each unique but also share certain similarities while baking as much efficiency into their operations as possible, these companies apply an approach to production called project manufacturing.

What is Project Manufacturing?

Project manufacturing is a process for manufacturing companies that design and build products based on very specific customer requirements used to complete each order. The Aerospace and Defense (A&D) industry is an excellent example of this. Final products tend to be unique and very complex, which requires the manufacturer to collaborate directly with the customer throughout the engagement to ensure they meet all specifications and that the customer is satisfied when the work is done. The A&D industry is also highly regulated and government contracting manufacturers must adhere to the DFARS (Defense Federal Acquisition Regulation Supplement) and specifically the MMAS (material management and accounting system) if they want to be successful in winning contracts.

At a high level, project manufacturers have their work cut out for them because they need to stay agile enough to respond to shifting customer demands quickly. When project requirements change, this can be easier said than done because manufacturers might not always have the right parts, materials, and equipment on hand.

For project manufacturing companies to keep projects on schedule and ensure their customers are happy, they need to be laser-focused on shop floor activities, statuses, and completions. At the same time, they also need to stay on top of invoicing, materials management, and financial accounting. Using disparate systems that do not talk to each other for these programs can result in additional work when manually pulling data from one platform to sync with data from another platform. It also leaves more room for human error.

However, with the right tools and processes in place — and a robust enterprise resource planning (ERP) solution sitting at the center of every project — it becomes much easier to juggle all these moving parts, keeping projects on schedule and on budget.


"62% of high performing manufacturing businesses have plans in 2022 to integrate their manufacturing operations with their financial operations."

2022 Deltek Clarity Government Contracting Industry Study


Keep reading to learn about nine areas project manufacturing companies need to consider for each project — and how an ERP solution ties them all together, creating more efficiency in your operations.

9 Areas of Operations that Project Manufacturers Need to Master

It’s no secret that project manufacturing is complex. Here are some main pillars of project manufacturing that organizations need to pay close attention to in order to achieve the best outcomes.

1. Materials

To meet customer requirements and keep projects on schedule, project manufacturers need to ensure they have the materials required for each job on hand. Otherwise, delays can derail their projects substantially — particularly with the supply chain issues the world is dealing with.

To ensure the right amount of supplies are available at the precise moment they’re needed — and that they procure those supplies at the best possible prices — companies use a process known as materials requirements planning (MRP). As a result, they receive automatic notifications as to whether they need to expedite, reschedule, or cancel orders to maintain optimal levels of supplies.

2. Orders and Inventory

Due to the complexity of the products they work on, it can be challenging for project manufacturers to stay organized. A sales order entry (SOE) system solves this problem by centralizing all vital information — including shipping addresses, expected due dates, quantities, prices, products, descriptions, and payments — in one place.

Additionally, leading project manufacturers use inventory systems to track all asset inventories, project-owned inventories, and other customer or government-furnished inventories under their purview. That way, they know where everything is at all times.

3. Manufacturing

For government contractors who manufacture products and need visibility into costs at the project level, it’s beneficial to use a business system that combines project accounting, Material, inventory, purchasing and supply chain management in one solution. Having deep visibility into the costs of a manufacturing project is essential to a government contractor’s success when executing contracts and winning new contracts. When you’re able to efficiently plan, procure, track inventory and build, you’re able to maximize productivity for your organization.

4. Production

It’s vital for project manufacturers to keep tabs on what’s happening on the production floor. This is where a manufacturing execution system (MES) can be particularly helpful.

An MES can help teams accelerate production and reduce waste by offering real-time visibility into production processes. At the same time, such a system enables project manufacturers to easily see who’s working on what, how close the work is to being complete, what corrective actions they need to take to keep the project on schedule, and more.

5. Time

As is the case with any manufacturing project, managers need to pay close attention to how much time workers spend on the floor. To do this, they can use a shop floor time system that captures start and stop times and supports complex pay, overtime, union rules, and multiple shifts. The right system will enable employees to make scheduling requests and get manager approval at their own leisure. What’s more, it will also prepare them to be compliant with relevant government requirements.

Without the right tools, keeping track of time spent on the floor can be incredibly time-consuming and expensive. Luckily, integrating your shop floor time solution with your manufacturing execution system makes it possible to automate this process.

6. Information

For project manufacturers, doing the best work requires exceptional communication. Simply put, teams need access to real-time information to ensure parts are available, production stays on schedule, and customers can expect the final products on time.

To facilitate the flow of information across the organization, it’s important that all of the systems mentioned above can communicate with each other and share information. Otherwise, projects can get delayed and run over budget — leading to customer frustration.

7. Progress

When production equipment needs repairs, sticking to schedules becomes much harder. As such, project manufacturers need to have a plan for maintenance, repair, and overhaul (MRO). Due to the complex nature of today’s systems, project manufacturers need to manage these operations with software. Ideally, your MES will integrate with your MRO operations for further efficiencies.

8. Compliance

Compliance policies demonstrate your corporate commitment to following the government’s rules. They also lower your risk of exposure. With solid policies in place, the chances of noncompliance reduce significantly. As an organization that does systems engineering and has government customers, you’re required to meet MMAS compliance as well as other regulatory standards like CAS (Cost Accounting Standards), DFARS and CMMC (Cybersecurity Maturity Model Certification).

To ensure you meet compliance, begin preparation early by first doing your own assessment of where your business needs to make improvements and put a plan together to methodically work towards achieving regulatory compliance.

9. Automation

Not only do manual project manufacturing processes slow down production, they also open the door to errors that can cause further delays (e.g., somebody misreading a screen and assuming enough materials are on hand when they aren’t). By baking automation into the foundation of your project manufacturing processes, you can streamline the flow of information across these critical systems while ensuring all stakeholders have access to the real-time data they need to do their best work.

How an Integrated ERP Solution Helps with Project Manufacturing

As you can see, managers need to pay attention to many different facets of project manufacturing to build the best products and achieve favorable outcomes with each project.

This is why best-in-class project manufacturing companies rely on an integrated, project-based ERP to build efficient processes, decrease project costs, streamline collaboration, and keep their fingers on the pulse of each project.

The end result? Projects stay on time and on budget — and customers are delighted with the end product.

For more information on what you can do to optimize your approach to project manufacturing, download our free guide on how to build a foundation for success.