If You Build It, They Will Come – Engineer to Order and Project Manufacturing | Part 3

In this blog series, John Walczak, CPIM discusses the JD Edwards EnterpriseOne Manufacturing functionality: Engineer to Order and Project Manufacturing. This week, John uses one of our clients as a case study to show how he approached building a vision and a strategy for specific functionality to fit the Client’s requirements. The case study helps illustrate the flexibility of JD Edwards EnterpriseOne Manufacturing and the benefits of deploying the appropriate functionality.

engineer to order and project manufacturingOur Client is a privately-held manufacturer that builds, installs and maintains energy management solutions for utility and industrial customers. The Client was a divisional spin-off of a larger entity. They had implemented JD Edwards EnterpriseOne very rapidly with little process analysis. The result was a deployment of standard Make to Order functionality in an environment where the end product is a large, highly customized project. In addition, changes to the business environment over time resulted in strong growth in the replacement and upgrade parts business—a segment characterized by smaller, but still customized, projects.

Corning Data’s Vision Tour analysis concluded:
  1. The rapid change of ERP systems led to the Client’s inability to understand and take advantage of JD Edwards’ functionality or optimize the system to support the business.
  2. The business had changed, but the processes to support an old business model remained in place.
  3. The Client developed processes, including many manual, paper-producing processes, to circumvent the system rather than taking advantage of JD Edwards native functionality.
  4. The Client was not taking advantage of the software tools they already owned. They had created inefficient processes that drove higher operational costs.
  5. From a financial point of view of the initial purchase cost and ongoing annual maintenance costs of JD Edwards, the Client’s software was a significantly under-performing asset.
  6. Some fundamental areas of the software required significant re-implementation in order to support the business.
  7. Many areas in the implementation, training and usage of the software needed improvement.
  8. The recommended changes to processes and software configuration would bring meaningful results: a reduction of order lead times of up to 10 percent and a savings in production costs of almost 15 percent.

Corning Data’s Vision Tour analysis identified a lack of differentiation in how the Client’s system was configured for different types of orders. The Client has treated all orders the same, regardless of size or complexity. They had created work arounds and customizations to make the standard Make to Order manufacturing functionality fit a more project-based environment. Many of the modifications did nothing more than simulate standard JD Edwards Engineer to Order and Project Costing functionality, but resulted in a configuration that did not support the Client’s business process.

The inflexible work arounds and customizations made it difficult to adapt processes as the business changed. As the Client transitioned to a heavier mix of replacement and upgrade parts orders, they did not configure systems to simultaneously support Make to Stock, Make to Order or Partially Engineered to Order as unique business processes. The existing sub-optimal Engineer to Order configuration also became sub-optimal for these other manufacturing approaches, leading to more work arounds and customizations.

Edwards EnterpriseOne has the native capabilities to support all of the multi-mode manufacturing requirements of the Client’s business. The Client just did not have the expertise to use them to their potential.

The Corning Data Solution

Corning Data addressed the problem of the broad mismatch in system configuration and business requirements by evaluating each type of order. Next, we worked with the Client’s team to redesign processes and reconfigure the JD Edwards system to specifically handle the unique characteristics of the order types. With Corning Data leading the project, the client substantially re-implemented much of the functionality supporting their Value Chain process, including Sales Order, Inventory, Procurement, Manufacturing and Financials. We helped the Client deploy Engineer to Order to control large projects while smaller projects used JD Edwards Project Manufacturing to minimize operational overhead. The result was not only a JD Edwards EnterpriseOne system configured to efficiently handle the Client’s multi-faceted business, but an internal team fully enabled to support future challenges and changes.

Next week, we’ll go further into how Corning Data enabled our Client’s complete digital transformation. Stay tuned!

John Walczak, CPIM is Vice President of Software Solutions. He assists clients in creating a vision for their technology footprints that facilitate business strategies and objectives. A member of the JD Edwards family for nearly 25 years, John has been an active participant in Quest International presentations and demonstrations. John was a long time certified member and instructor of APICS.