Many Aerospace, Defense Firms Dissatisfied with Project Operations Software, Study Says
By: Deltek May 13, 2014
Project-based operations that improved on-time and on-budget performance by 10 percent or more were nine times as likely to also improve dramatically on key financial metrics such as net profit margin and cost of compliance. Nearly every project-based manufacturer feels it is important for their company to improve on end-to-end project management, but less than half of the companies in project manufacturing, aerospace and defense (A&D) and maintenance, repair and overhaul (MRO) sectors with project-based operations make wide use of any recognized category of commercial software system. This includes limited use of enterprise resources planning and quality management (QMS) systems.
These are just a few of the findings in the research report Profitable Programs: Transforming Project-based Operations. The report – designed to capture the current state of project-based manufacturing and MRO – was co-authored by Jeffrey Hill and Julie Fraser of Iyno Advisors.
Part of the challenge for many project-based operations is that the software they use is not well suited to their business. Only 13 percent of respondents report that their enterprise software is well-designed for the types of projects and manufacturing they perform. Program and project-based businesses are different, and only a few enterprise software providers truly support all of the processes these companies need. Most software also does not offer end-to-end information flow for a project from enterprise accounting through to plant operations and timekeeping. This makes measuring earned value management a moderate or major challenge for more than 60 percent of the industry.
The research clearly shows that those who do have both enterprise resources planning and manufacturing execution systems that interoperate are more likely to have improved on key operational metrics such as customer complaints, product quality, and project on-time and on-budget.
The research findings are based on a February 2014 online survey of more than 250 respondents in aerospace manufacturing (16 percent), aircraft manufacturing (12 percent), MRO or service (9 percent), military or government operation (9 percent), defense equipment (9 percent), avionics or custom electronics (6 percent), satellites and related equipment (2 percent), and suppliers to those industries (23 percent) as well as other project-based industries (14 percent). The companies surveyed were of all sizes, and nearly evenly split between a focus on government and commercial contracts. In addition to the online survey data, the report includes material gathered from telephone interviews with experienced practitioners in these industries.
The report will be available from the Deltek web site on May 14.