Project Control and Engineering Change Control in ERP

Project control module is used for organizing long term projects such as building a ship or power plant. The production environment resembles make to order situation where customer order driven purchasing, production, estimating, engineering, planning and control is done. This module also enables in setting up, analyzing and amending the budget for the project undertaken by the organization. A project can be standard one involving standard Bill of Materials, routing and costing structures. However, in most of the cases the project is specific to order, involving customized BOM, routing and costing structure.

Procedure for a Project Control: Following are the activities related to project control module:

  1. Creating a project: A project is a collection of manufacturing and purchasing actions, arising out of a customer order. Thus, a project, part of a project or a project t structure is created by a customer order that have to order policy. A project may constitute various subprojects. The project structure defines relationship between main projects and sub projects.

  2. Project Planning: The purpose of project planning is to maintain various project activities and to maintain relationship between various activities. It also creates a rough cut material planning and capacity planning of the project in order to estimate project lead time and required capacity. The co-ordination of main project with sub projects, planning of material based activities; booking of non order related time to a project is also done through this functionality.

  3. Project Engineering: This functionality is used to customize standard items to the customer’s requirement where project specific variant of standard objects such as customized bill of materials and routing is created.

  4. Making and controlling budget for the project: The purpose of budgeting is to estimate project cost and revenue to be generated, with the help of cost structures, involved with project activities. The method of invoicing (progressive payment) is also defined. Other details related to administration of budget is incorporated under various broad categories and cost grouping. As for example, a construction project may be broadly categorized under site preparation, foundation, construction and finishing. The costing for the same project may also be grouped under material, labor, equipments, subcontracting and sundry expenditure.

  5. Execution of the project: As the project advances, various work in progress (WIP) transactions are generated such as issue of materials, workmen’s hour deployed for project activities, completion and signing off sub projects. Such WIP transactions are monitored, invoiced as well as posted to related ledger by this functionality.

Engineering Change Control (ECC): Through engineering change control module, organizations get effective control over engineering change orders. An end items may have hundreds of components. When improvement is done or a new model is launched, a number of components are changed or replaced. This module provides tools to carry out the procedure to manage this change/development. If a changed component is used in a number of end products, these tools make a where use list and globally replace the component in all the end products.

ECC essentially creates an engineering item from a purchased or manufactured item. This engineering item can be taken through various revisions/versions, such as prototype, previous models, production model, and obsolete model. Next, the revised item is copied to a new or existing manufactured or purchased item. ECC also maintains engineering drawing and documentation through graphic files for each model.

ECC also maintains engineering BOM which unlike production BOM, does not use sequence number but uses revisions to deal with alternate components. After creating Engineering BOM, namely Engineering Change Order functionality is used to change a group of engineering items/BOM to production items/BOM.

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The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to and the content page url.