Industries such as construction, manufacturing, high tech, communications, and energy all feature large-scale projects with interconnected, and often complicated, materials and resource requirements. Given these complexities, project-based organizations often struggle to manage suppliers, material purchases, deliveries, costs, and billing in a connected manner. Instead, workflows are dispersed across field applications, back-office ERP systems, and spreadsheets, which can lead to inefficient communication and coordination between the project management team, back-office teams responsible for materials procurement and delivery, and finance team.

The negative impact of managing large-scale projects in silos

Managing projects in silos negatively affects all business areas — from supply chain and project management to finance and decision-making. From a supply chain perspective, disconnected processes can cause poor on-time delivery performance, material shortages, and an inability to make informed priority and allocation decisions across projects. Materials can be delivered too early or too late, leading to cost implications and project delays, along with confusion in the supply chain and increased expediting costs.

In terms of project management, disconnected systems lead to limited ability to manage resources effectively. Project plans may be unable to consider material availability or manufacturing delays, and there may be an inability to perform effective “what-if” scenario planning, including supply availability. The disconnect between project management and the manufacturing shop floor can also cause issues. For example, changes in the project schedule may not be communicated effectively to the manufacturing team, leading to confusion and potential cost overruns.

From a finance perspective, managing projects in silos means limited visibility to potential late penalty fees along with manual efforts required to analyze the financial impact of project and supply chain plans. Other pitfalls can be difficulty in establishing a bottom-up financial plan, a lack of visibility to predict revenue and margins, poor cash management, and higher costs. Finance can also be impacted if materials are purchased or received before they are needed, resulting in cash flow issues and reduced revenue.

The path forward

Managing these complexities requires an integrated solution that allows for real-time data sharing and collaboration between project management, procurement, supply chain, and finance teams. The goal is to enable better visibility and control over materials procurement, delivery, and installation, ensuring that the right materials and resources are available at the right time, and allow for quick adjustments based on changes in the project schedule. Workflow management and data integration capabilities need to be in place to enable effective scope management, progress measurement, advanced work packaging, permitting, and contracts management.  

The Argano and Oracle Project Driven Supply Chain solution combines the power of Oracle Primavera Scheduling & Project Controls with Oracle Cloud Supply Chain and Project Financial Management solutions to provide an end-to-end solution.

With the right technology and process solutions, project management, supply chain management, and finance teams can work together more effectively and efficiently for large-scale industry projects. Integrating processes across all areas will positively impact the entire project flow — from project initiation, procurement and management of materials, and manufacturing and construction, to billing and revenue recognition.

Learn more by watching our Automating Project Driven Supply Chain Management webinar presented with Oracle, or contact us today.