9 Essential Elements of Project Manufacturing

Written by: Jody Twining, Senior Marketing Manager

Not every company has the advantage of mass-producing a single product that meets the needs of a broad customer base. For those involved in bespoke, engineer-to-order, or make-to-order manufacturing, the process is far more intricate. These businesses don’t benefit from the economies of scale associated with mass production. Instead, they rely on a specialized approach known as project manufacturing to create unique products efficiently.

In this article, we will explore:

• What is Project Manufacturing?
• 9 Areas of Operations that Project Manufacturers Need to Master
• How an Integrated ERP Solution Supports Project Manufacturing

Project manufacturing, sometimes referred to as 'project-based manufacturing', is a production process tailored to companies that design and build products based on specific customer requirements.

This approach is common in industries like Aerospace and Defense (A&D), where final products are often unique and complex. These products require close collaboration with customers throughout the project to ensure all specifications are met and satisfaction is achieved.

Additionally, A&D companies must navigate strict regulations and adhere to standards like the Defense Federal Acquisition Regulation Supplement (DFARS), which includes Material Management and Accounting System (MMAS), to secure government contracts.

For project manufacturers, the key to success lies in remaining agile enough to respond quickly to changing customer needs and evolving market demands. However, this can be challenging, as it requires having the right parts, materials and equipment readily available at all times.

To keep projects on schedule and ensure customer satisfaction, project manufacturers must maintain a sharp focus on shop floor activities including quality control, inventory management and financial accounting.

Relying on disconnected systems can lead to inefficiencies and errors, but with the right tools and processes in place—especially a robust enterprise resource planning (ERP) solution—managing these complexities becomes much easier.

Keep reading to discover nine critical areas that project manufacturing companies must master to ensure success and how an integrated manufacturing ERP solution ties them all together for more efficient operations.

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Project manufacturing is inherently complex. Here are the key pillars that organizations must focus on to achieve optimal outcomes.

1. Materials: Ensuring the availability of materials is crucial to meeting customer requirements and keeping projects on schedule. With ongoing global supply chain challenges, project manufacturing companies must use materials requirements planning (MRP) to maintain optimal supply levels. This process provides automatic notifications to expedite, reschedule or cancel orders as needed.
2. Orders and Inventory: Due to the complexity of their products, project manufacturing companies can struggle to stay organized. A sales order entry (SOE) system centralizes essential information—such as shipping addresses, due dates, quantities and prices—making it easier to manage. Additionally, advanced inventory systems help track assets, project-owned inventories and customer or government-furnished inventories, ensuring everything is accounted for at all times.
3. Manufacturing: For government contractors, visibility into project-level costs is essential. A business system that integrates project accounting, materials management, inventory, purchasing, quality and supply chain management provides the insights needed to execute contracts successfully and win new business. Efficient planning and inventory management are critical to maximizing productivity in project manufacturing.
4. Production: Keeping track of production floor activities is vital in project manufacturing. A manufacturing execution system (MES) offers real-time visibility into production processes, helping teams accelerate production, reduce waste and monitor progress. With an MES, manufacturers can easily identify who is working on what, track completion status and take corrective actions to keep projects on schedule.
5. Time: Accurate time tracking is essential in any project manufacturing process. A shop floor time system captures start and stop times and handles complex pay structures, overtime, union rules and multiple shifts. The right system allows employees to make scheduling requests and get manager approval easily while ensuring compliance with government requirements. Integrating this system with an MES automates the process, saving time and reducing costs.
6. Information: Effective communication is critical for project manufacturing. Teams need real-time access to information to ensure that parts are available, production stays on schedule and customers receive their products on time. By ensuring that all systems—like MRP, MES and SOE—can communicate and share data seamlessly, manufacturers can avoid delays and budget overruns.
7. Progress: Equipment maintenance is a critical aspect of sticking to production schedules in project manufacturing. Manufacturers should have a plan for maintenance, repair and overhaul (MRO) operations, ideally managed through integrated software. Connecting your MES with MRO operations further enhances efficiency.
8. Compliance: Strong compliance policies reflect a company’s commitment to meeting government regulations and reducing the risk of noncompliance. For companies working with government contracts, compliance with MMAS, Cost Accounting Standards (CAS), DFARS and Cybersecurity Maturity Model Certification (CMMC) is mandatory. Preparing for compliance should begin with an internal assessment and a strategic plan to address gaps.
9. Automation: Manual processes in project manufacturing slow down production and increase the risk of errors. By incorporating automation into your operations, you can streamline information flow, make your operations agile, reduce errors and ensure that all stakeholders can access the real-time data they need to perform at their best.

Managing the complexities of project manufacturing requires careful attention to many different facets of the business. This is why leading project manufacturing companies rely on integrated, project-based ERP solutions. These systems help build efficient processes, reduce project costs, streamline collaboration and provide real-time insights into project status.

The outcome? Projects are completed on time and within budget, leading to satisfied customers and successful outcomes.

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