How Manufacturing Can Benefit from Project Management

Linh Tran, Wednesday 05 October 2016 | Reading time: unknown

Manufacturers are no doubt familiar with project management. Many project management methodologies actually have their origin in manufacturing, such as Kanban, Lean or Six Sigma

As a continuation to our "Project Management in Different Industries" series, we'll take a closer look at four more industries that can benefit a lot from project management: manufacturing, the legal industry, the insurance industry, and the health industry. The start makes manufacturing, an industry that has shaped project management a lot, but which can also learn a lot from project management. 

Pain Points of the Manufacturing Industry

The manufacturing industry has very specific challenges and pain points to deal with. The main pain points are schedule, cost, scope and quality. This probably sounds very familiar to project management professionals, as these are the four corners of the Devil’s Quadrangle. The biggest challenge for manufacturers is to produce a high quality product in the shortest amount of time possible. Reducing the time to market can be vital for organizations to gain a competitive advantage, keep production costs low, and keep the scope in check. However, this can’t be done at the expense of quality as product quality is directly related to customer satisfaction and profit.

Another pain point of manufacturing is the fact that it involves a multitude of interdependent processes. This makes scheduling challenging since successor processes are dependent on their predecessors and vice versa. Not only that, manufacturers also have to take into account that the quality of the product is kept at the same level at each step of the process.

Here is a summary of some of the biggest pain points manufacturers face (Source: Brandeis University):

  • Forecasting timelines, budgets and clearly define scope
  • Meeting quality, cost and on time delivery goals
  • Controlling scope creep and change orders
  • Controlling project progress while overseeing multiple contractors over long periods of time
  • Securing cost-effective materials and resources
  • Managing changing client expectations and demands

5 reasons why manufacturing should implement project management methods

Project management can help the manufacturing industry mitigate some of these challenges and enables manufacturers to produce better products, in the shortest amount of time and at the lowest cost. While it might be difficult to stay focused on project management methodologies while keeping the production schedule, it is definitely worth it. Here are the 5 reasons why manufacturers can benefit from project management:

1. Increased flexibility

Methods such as Lean project management enable the production team to work more flexibly while avoiding unnecessary steps in the process. These unnecessary activities are often called “wastes” in Lean, which means that these are activities that don’t add any value to your production process. Lean helps you streamline manufacturing processes, which in turn increases efficiency and leads to a more quality output. Eliminating excess processes gives you more flexibility to react to unforeseen events. Depending on the situation, you can quickly adapt your production to customer demand, without costly shortages or oversupplies.

2. Easily track progress

Project management is not just about planning, but tracking and controlling the project’s progress. Using traditional project management tools such as the Gantt chart and a work breakdown structure to plan production, helps manufacturers bring structure into the process, and it also enables them to track the project’s progress. It allows them to identify any delays in the schedule and which steps are necessary to deliver the product successfully (see critical path).

3. Better risk management

One of the most important aspects of project management is risk management. Every project manager knows that even the best planned project can be thrown off track by an unforeseen event. As manufacturing involves so many processes that built upon one another, the smallest inconsistency, such as a loose screw for example, can throw the production schedule off. Automation has helped manufacturing increase the efficiency of the production and output, but automation is also prone to malfunction. A machine can always break down and you will need to have contingency plans for that and other events, or you risk a complete halt of production which can be very costly. Effective risk management involves the following steps:

  • Risk identification: Identify all possible risks that could affect your production schedule, budget and quality.
  • Risk assessment: Assess and prioritize which risks are more likely to occur and which will have the biggest (negative) impact on your project.
  • Risk response plan: Decide on the steps you will take to avoid or eliminate the risk, or how to mitigate its impact on your production.
  • Risk status monitoring: Circumstances can change and so do risks, which is why you need to constantly monitor and control risks and make adjustments to your risk management plan if necessary.

4. More effective tool utilization

The manufacturing industry is familiar with tools that facilitate more effective and efficient production of goods. Utilizing the right project management tools equally helps manufacturers create better production plans, control production processes, manage risks and measure and quantify success. It also enables more effective collaboration between team members and across departments. A project management tool with a document management system makes it possible to retain knowledge and best practice lessons for future projects.

5. Continuous improvement

The goal in manufacturing and project management alike, is to improve continuously. It’s important to improve production processes, products and tools utilization. To do so, it’s important to combine project management skills and methods with established manufacturing methods to increase the efficiency and effectiveness of processes and products. Improving always goes hand in hand with ‘change’. Change is not easy to come by and it can be time and resource consuming, but it is important for a business to grow. Implementing project management methods can help manufacturers improve, to ‘get better at getting better’ so to speak: By streamlining processes, by carefully tracking and measuring the progress of the production, by tightly controlling risks, and by utilizing available PM tools to their fullest potential. 

Read our other "Project Management in Different Industries" blog posts: 

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