Work Order
Management
Accountable for work order
management information and want some practical suggestions to reduce
information management costs?
What is work
effort?
Most companies need to track the time and effort it requires to
manufacture
products or provide services. They need this for cost accounting
purposes or for client billing purposes e.g.
- Companies
providing services need to accurately manage time and materials
required for the services to ensure accurate billing; and
- Companies
manufacturing products need to track time and materials used by
employee’s to ensure correct accounting and to help manage efficiency.
What
information is needed to manage time and material?
Effective management requires answers to questions such as:
- What needs to be produced, or delivered?
- What is the estimated cost, in terms of effort
and resources?
- Who will be assigned to the task?
- What is the current status?
What
information is required for work effort management?
Many
companies use the concept of a work order to track time and materials.
These can be sophisticated work order management systems that track:
- What work will be performed?
- What roles are required to complete the work
e.g. project manager, electrician, mechanic;
- Who is assigned to the work order and role?
- What materials and expenses are authorized; and
- What time and effort is required to complete
the work.
Work orders can be used to track effort required to:
- Satisfy a requisition, e.g. a requisition for a
specific quantity of lumber milled to a customer specification;
- Produce a specific product, e.g. build a custom
boat; or
- Maintain a piece of equipment owned by the
company, e.g. planned maintenance or emergency repair.
Work order
management systems may need information from:
- Order entry system, to obtain information about
requisitions;
- Fixed asset management systems, to obtain
information and identification of any assets impacted by the work order;
- Human resource management systems, to obtain
information concerning employee skills and training;
- Inventory
management, to obtain information about products required for the work
effort and to update inventory quantities as products are used, or
produced, by the work effort; and
- Billing management, to ensure that invoices are
produced when work is completed.
What are
some work effort information challenges?
Work
effort and time and material tracking requires input from several key
enterprise management information systems. These systems usually
operate as information silos and require data transfer mechanisms to
synchronize data.
The key challenge I have seen is lack of synchronization between there
individual systems.
What is a
better way to manage this information?
Maintaining
work effort data in a variety of individual databases is less efficient
than storing it in one database and having all applications access the
data as needed. Alternate options include:
- Enterprise
resource planning (ERP),
many companies have invested in ERP systems, which handle most of the
time and material reporting functions and other business functions such
as inventory management and billing management.
ERP should be
evaluated to ensure that they meet business information management
requirements.
- Redesign,
some companies have made investments in an enterprise data model and
new management information systems to access common data. This option
is not as costly as it might appear since much of the analysis work
will be required even if an ERP option is selected. Companies should
complete a cost benefit analysis to compare the cost of re-design with
the cost of ERP.
- Master
data management (MDM) is becoming a common, but expensive,
means of ensuring synchronization of key data among applications.
Companies
should complete a cost benefit analysis to compare the cost of MDM with
the cost of re-design or ERP.
Summary…
Work order management information is used by many corporate management
information systems and needs to be managed to avoid storing redundant
data.
There are several options for ensuring efficient
information management and these options should be explored to
determine cost benefits on a case-by-case basis.
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