ERP

How to structure projects professionally

Alexander Lang10/06/2021

Many projects have been getting increasingly complex and dynamic. At the same time, the number of project participants is also climbing. Dealing with these changing conditions requires carefully structured project planning right from the start – the kind of planning that can only be controlled using professional software applications.  

In this post, we’ll take a closer look at the individual components that make up integrated ERP project planning: 

  • process and schedule planning
  • Resource and capacity planning
  • Project controlling

The project structure plan 

A project is defined by its unique characteristics. But that doesn't mean that the project structure plan has to be reinvented every time. Working with project templates gives you a basic structure from which to start. It ensures that the project portfolio can be easily analyzed and evaluated – say, using a business intelligence tool.  

What makes a project unique starts right from the project BOMs for manufacture, as well as the individual assemblies in the project structure plan. The stock list contains master BOMs and individual articles which should, ideally, meet the requirements for profit planning: purchasing terms and delivered prices. 

One decision that deserves careful consideration is what kind of project structure plan is better suited: a structure plan based on project phases or a structure plan built around components. The project structure plan forms the foundation for all subsequent steps of planning – the common thread that ties them together. With this systematic overview, you establish right from the start how your project control will eventually be structured and what project revenues can be allocated for certain items. 

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Profit planning 

Using company resources like articles or services, profit planning can be generated almost automatically from the project structure plan. The expected revenues and profit margins are calculated using the traditional overhead calculation method with or without a costing sheet and surcharges for the various pricing groups. Based on the budget plan, you can 

  • calculate project quotes 

  • organize your project control and 

  • invoice projects. 

Project planners and project controllers no longer have to worry about hourly rates or purchase prices. One exception, however, is special purchased or externally produced parts which require requesting individual pricing based on the project. Thanks to our integrated solution, your staff can forward inquiries straight from the project to the Purchasing Department without all the coordination work that would normally be required. 

Process and schedule planning 

In addition to the planning of costs and revenues, another factor for project success is process and schedule planning. This is where the individual planning processes are derived from the project structure. These processes are subsequently used as a basis for defining the individual process steps and how long they should take. These sub-processes can be linked up through relationships to predecessors. This way, they can be controlled and re-scheduled with restrictions. Meanwhile, you have to determine if you’re going to schedule by the earliest or the latest time – from the start date onwards or from the end date backwards. Predefined milestones make schedule management even more effective. The data obtained is ultimately used for project billing. 

Resource and capacity planning 

Every resource has a certain capacity, depending on the given work time model. The available capacity forms the basis for resource planning. The main question is this: Which resource is scheduled for which project, to what extent and for which time period? The only way to accurately answer this question is to thoroughly plan out your resources. Keep in mind, however, that as you work on the project, daily business will still continue at the same time. And don't forget to factor in absences due to vacations or staff training. So the capacity actually available for project work might be quite a bit lower.  

Our industry solution for project-based manufacturing lets you see at a glance if a staff member is overburdened or able to take on work. 

Planning and execution signal monitor

Project controlling 

Want to know the costs accrued so far in your project and how much is left of your budget?  
How about getting that info for each individual assembly or project phase?  
No problem.  

With integrated project planning, all costs are posted directly to the project – whether it’s the work hours of the project team members, purchasing invoices or travel expense reports. As soon as it’s posted, the information is then available for further analysis. Your staff can access the latest detailed figures from any project level. You’ll know early on how much cost you’ve accrued and whether or not the budget will suffice, in relation to the overall project or a specific plant, assembly and even for individual work packages or purchased parts. This lets the project leaders to identify deviations early, take appropriate countermeasures and indicate inaccuracies in the project status report. 

How do you plan your projects? Is it smooth sailing at every stage, or do you still see a need for improvement?
Why not talk to one of our seasoned industry management consultants? Make an appointment with Alexander Lang today to discuss your specific situation. 

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Author:
Alexander Lang
Industry Manager Project | COSMO CONSULT