Managing projects using WebERP

This post is #5 in a series on using webERP, and is a work in progressSearch for “webERP” to find other posts in the series and please visit the demo on dalescott.net.

In this tutorial, I will explore webERP’s project management capability using the Swift Construction Company’s development of the Aircraft Wireless as an example.

Features of using webERP for project management include:

  • Integrated data. Projects, people, hours, expenses, purchases, prototype manufacturing, etc. are managed conveniently in one system.
  • Visible and trusted.
  • Readily scales with users, projects and project complexity.
  • Can be used to save money and even generate revenue. For example, the Canadian SR&ED (Scientific Research and Experimental Development) tax incentive program generally requires detailed project information to support a claim.

Goals

The goals of this exercise will be to:

  • Demonstrate basic project management functionality possible using existing webERP functionality.
  • Determine if webERP is missing any features critical for project management, or which would significantly enhance its ability to be used for project management.

Definitions

Here are some terms in the context they will be used here.

  • Project: A temporary activity to achieve a specific goal. Projects have expenses, milestones, phases and tasks.  Labor, and other expenses, are consumed expended to complete tasks.
  • WBS: Work Breakdown Structure. An ordered tree of tasks and sub-tasks. WBS number: how an individual tasks is identified (e.g. “8.3.2” for a child-of-child task).
  • Gated development process. A water-fall-like product delivery process divided into major phases for clarity. E.g. Investigation (Concept), Definition (Requirements), Design (the real work, including prototyping), Verification (Beta-Test), Pilot (pre-launch process reviews), Production and Termination. A development project is often closed when it reaches Production, with subsequent work allocated to a general-purpose maintenance project.

Tracking Time

The most fundamental aspect of project management is recording the effort spent to achieve a goal, or complete a task. The ubiquitous Gantt chart has become synonymous with project management, but without knowing how much time has actually been spent, it is impossible to know if the plan is optimistic or conservative, and to actually manage the project.  

Many organizations use timesheets to record employee hours for payment, or in the case of salaried employees, to record vacations, sick leave and other time off for payroll and accounting purposes, and the time data may not even be assigned to a particular project, or task. However, if an organization uses timesheets and it undertakes projects, it should be clear there are advantages to having the data in one system, where it can also be available for project management.

I’m using the term Project Management here fairly loosely. It might be more precise to say time recording and reporting, but that’s just where it starts. As Quality people say, you can’t manage a process if you can’t measure it. The first step on the path to effective project management is to record specifically the projects that the organization has determined it will spend effort on, how effort is being spent, and to be able to report the effort spent by project, employee or task. For many organizations, doing just this will provide an enormous payback in understanding where effort is being consumed, and will focus the organization on what it has determined are its key goals.

Two Possible Strategies

webERP does not specifically support project management. However, it is possible to overlay project management tasks onto existing functionality.

  • Manufacturing Strategy. A project is modeled by an item tree. Each project has its own item number. Work orders are used to capture project labor and other costs. As many labor type items can be created as necessary. A labor type can be defined when a stock category is defined for a stock type, which allows for GL entries to recover labor (CR a P&L account and DR WIP) when labor is issued to (or consumed by)  a work order. Labor items can be included in a bill of materials at a particular work center, and work centers can be mapped to labor items. Having created a work order, you then issue materials and labor to it and receive finished goods from it. When all the materials and labor have been issued and the finished goods received from it the work order is closed and the stock of the (unsold) finished items are revalued as necessary.
  • Contract Strategy. A project is modeled by a contract. webERP contract functionality allows for entry of nominal items directly to a contract’s cost, and stock and labor can be issued to a contract work order. If necessary, multiple contracts can be used with each contract a different section of the project (e.g. prototype, software development…). Contracts can have dates associated with them, as well as inter-dependencies, and could be presented using a Gantt or PERT chart. Phil Daintree, founder of the webERP project, discusses this approach in the webERP wiki page Proposed Project Management Model.  

Manufacturing Strategy

The following must already have created:

  • Inventory category for project virtual items
  • Inventory category for labour virtual Items
  • A work centre
  • Customer type
  • Customer price list
  • Sales region

Setup

Create Virtual Inventory Categories

Virtual items have value and a desire to track and manage, but can’t physically sit on a shelf somewhere. Virtual inventory categories must be created to manage projects and the labor they consume.

PRJ Virtual Inventory Category

LABOR Virtual Inventory Category

Create a Work Center

A Work Center is a place where production activities are performed. Resources such as people and machines are associated with a work centre, and together they become the functional planning unit. A work centre must exist before a work order can be created for the work order to reference.

Main Menu -> Manufacturing Maintenance -> Work Centre.

Create a Default Customer Type

Main Menu -> Setup -> Receivables/Payables Setup -> Customer Types.

Create a Default Sales Type

Main Menu -> Setup -> Receivables/Payables Setup -> Sales Types.

Create a Default Sales Territory (Area)

Main Menu -> Setup -> Receivables/Payables Setup -> Sales Areas.

A default price list can also be defined, but is not required unless the customer price list does not provide pricing for some item. (Main > General Setup > System Parameters.)

Create project and labor items

Create a Manufactured item to represent a project (it must be of type Manufactured so that a manufacturing work order can be created),

weberp-create-project-item-manufactured

and a Labour item of type Service/Labour to represent the project labor.

weberp-create-labour-item

Note that the new items will appear in an item search.

weberp-project-labour-items

Create a project BOM

Create a manufacturing BOM for the project item so that a manufacturing work order may be created, although no child items will be included on the BOM.

weberp-create-project-item-bom

Create a work order to capture costs

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Issue labor to the work order

Having created a work order, you then issue materials and labor to it and receive finished goods from it. When all the materials and labor have been issued and the finished goods received from it the work order is closed and the stock of the (unsold) finished items are revalued as necessary.

Report on the project

A few standard reports will provide the basic information to gain a project overview.to understand general project status.

  • Project Summary (list of all projects with consumed labour)
  • Project Labour over Time
  • Project Labour by Activity
  • Project Labour by Employee

TODO replace screenshots with webERP examples.

Project Labour over Time

Project Labour per Activity

Project Labour per Employee

Close the work order

The work order is closed when the project is deemed complete. Don’t leave projects open indeterminately, this will reduce clarity within the organization by taking attention away from the really important projects, and adds clutter to the reporting. It’s better for the organization to decisively kill a non-viable project than it is to starve it to death from lack of resources, and a new project can always be opened if appropriate.

Contract Strategy

Setup

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Create a project contract

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Create a labor item

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Create the project contract work order

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Issue labor to the project work order

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Report on the project

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Close the project

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Summary

Strategy Comparison

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Areas for improvement

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