Working Smarter & Quality Control Rise to the Top of Deltek Clarity Manufacturing Trends
By Annette Grotz, Product Marketing Manager, Deltek
Sitting atop every government contractors’ list of manufacturing concerns, based on results from the 11th Annual Deltek Clarity Government Contracting Industry Study, are two words – quality control. Given the circumstances the entire world has found itself in with COVID-19, the revelation of this key result probably isn’t being met with much surprise. However, the information in this year’s Study primarily recapped 2019, illustrating that even pre-pandemic, government contractors were concerned and struggling with manufacturing consistency.
More than 380 survey responses across nine business areas were completed when the Clarity Government Contracting Survey concluded on March 2, 2020. Coupled with additional commentary from Deltek experts on what the outcomes could mean for this year into 2021, the Study offers a comprehensive industry snapshot to aid government firms with planning and forecasting.
Clarity on Manufacturing Trends
Most Cited Risks & Challenges
People, data and compliance pose the greatest risks and potential rewards for government contractors in the manufacturing space. Similar to results in other sections of the Study, the in-depth webinar Clarity on Manufacturing Trends reveals that talent is the top concern for a majority of firms (63%). Shortages in qualified candidates is a challenge for many contractors, who require a specific mix of skills, credentials and security clearances to occupy positions on contracts. COVID-19 has made acquiring talent exponentially more difficult, and it has complicated retaining individuals as well.
Compliance requirements is the second most identified risk (48%), with supply chain, quality and security (35%) in a dead heat for the number three spot. Because audits can happen without warning, take time away from a project and harbor the potential for harmful failure, manufacturers often cite compliance as an anxiety.
Most contractors expect engineering change order levels to stay the same or increase slightly in the next year. However, they are less certain about inventory accuracy. Smaller firms indicated they vacillate equally between moderately accurate, about average and moderately inaccurate in regards to inventory accuracy, while medium and larger contractors reported more consistency and confidence. Inventory processes that depend primarily on manual tracking introduce additional risk for manufacturers because it leaves more room for error and non-compliance with material management and accounting system (MMAS) requirements under Defense Federal Acquisition Regulation Supplement (DFARS).
To answer these challenges, manufacturers stated they plan to use subcontractors more, integrate manufacturing solutions with finance, create and promote new, required safety programs, and will invest in new manufacturing software solutions. It is not uncommon for manufacturers to employ more solutions than they can count on two hands to complete projects. With such a heavy reliance on legacy systems, especially with the aftershocks of COVID-19, it would not be a stretch to imagine that many manufacturers are considering making the investment in new integrated solutions sooner rather than later.
Key Performance Indicators & The Process of Going Digital
Tracking manufacturing efficiency and productivity can be subjective for government contractors; however, there are some universal metrics that are generally agreed upon. On-time delivery, for instance, a quarter of Study respondents stated they are not tracking this metric, which pulls the efficiency of their supply chain into question. How are these contractors effectively biding on opportunities if they are unclear on how capable they are to deliver by a requested date?
Bid accuracy, or cost of completion, is also important, tracked by 68% of respondents. It illustrates a manufacturers’ ability to accommodate engineering changes while still being able to deliver. As does percent scrap, cycle time and cost of engineering changes, which round out the top five most tracked indicators.
Digital manufacturing efforts continue for many contractors, with about a quarter working on re-engineering processes. As indicated previously, investments in software integrations and/or new solutions is on the radar for manufacturers, especially as new technologies like robotic process automation (RPA) become more readily available and compliance demands grow.
Explore More Results
On-time delivery and positive financial results are the top motivations for manufacturers in the government contracting space. Re-engineering and improving processes are important tactics to achieve these ends, especially in the wake of COVID-19. Manufacturers are also re-thinking the tools and technology they use, as well as their subcontractor needs to address quality and compliance standards as a counter to the uncertainty.
Access even more results now! Download the in-depth Clarity on Manufacturing Trends webinar to hear takeaways like critical audit practices, cost demands and why subcontractors may be the capacity answer manufacturers are looking for.
Still hungry for additional Deltek Clarity Government Contracting Study results? Explore the complete in-depth webinar series.
You can also download the full Deltek Clarity Government Contracting Industry Study at any time.
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