This case study describes a process automation project carried out at a medium-sized Portuguese industrial company in the metalworking sector, with 85 employees, annual revenue of 12 million euros and made-to-order production operations. The company faced operational efficiency challenges that were limiting its growth and affecting project profitability.
The case illustrates how automating information processes (not physical production) can generate significant results in industrial companies, with controlled investment and measurable returns.
Company context and challenge
In recent years, the company had invested in modern production equipment (CNC, laser cutting, robotic welding), but its administrative management processes remained largely manual:
- Quoting: each quote was prepared in Excel by a senior engineer, taking between 4 and 8 hours. The company received 40 to 60 quote requests per month and could only respond to 70 percent of them.
- Production orders: created manually in the ERP (PHC) from the approved quote. Transcription took 30 to 45 minutes per order.
- Time recording: operators logged their hours on paper at the end of the day. Data reached the ERP with a 2 to 3 day delay.
- Production reports: compiled manually in Excel, available only at the end of each week.
- Invoicing: manual verification of deliveries, invoice creation in the ERP, sending by email. Average invoicing time after delivery: 5 to 8 days.
Diagnosis and process mapping
The diagnosis revealed three central problems:
| Problem | Quantified impact | Root cause |
|---|---|---|
| Response time to quotes | 30% of requests unanswered; estimated loss of 1.2M euros/year in orders | Manual process, dependent on 2 people |
| Lack of visibility into real costs | 20% of projects found to have a negative margin after completion | Production data delayed by 2-3 days |
| Invoicing delays | Average DSO of 72 days; strained cash flow | 5-8 days between delivery and invoice issuance |
The mapping identified 47 points of manual transcription between systems and 12 processes as candidates for automation, prioritised by impact and feasibility.
Solution implemented
The project was divided into three phases, implemented over 6 months:
Phase 1 (months 1-2): ERP integration and time recording
- Installation of shop-floor terminals for real-time time recording.
- Automatic integration with PHC: production times automatically feed the cost centres.
- Real-time production dashboard showing the status of each order, accumulated times and deviations from the budgeted figures.
Phase 2 (months 2-4): Semi-automatic quoting
- Creation of a database of standard times by operation, material and complexity, automatically fed by actual production data.
- A quoting tool that pre-fills times and costs based on historical data, leaving the engineer to validate and adjust.
- Automatic conversion of an approved quote into a production order in the ERP.
Phase 3 (months 4-6): Automated invoicing and reporting
- When the production manager marks an order as completed, the system automatically generates the invoice in the ERP and sends it to the customer.
- Weekly profitability reports by project, customer and type of work generated automatically.
- Automatic alerts when a project exceeds 80 percent of its budgeted time (see financial automation).
Quantified results
After 6 months of operating with the new processes:
- Quote response rate: from 70% to 95%. Average response time reduced from 5 days to 1.5 days.
- Projects with negative margin: from 20% to 4%. Deviation detection became real-time, allowing corrective action during production.
- DSO (Days Sales Outstanding): from 72 days to 48 days. Invoicing on the same day as delivery.
- Back-office time: a reduction of 2.5 FTEs (full-time equivalents) in administrative tasks, redeployed to higher-value functions.
- Estimated revenue recovered: 800,000 euros in orders that previously went unanswered.
Timeline and investment
| Phase | Duration | Investment | Estimated annual return |
|---|---|---|---|
| Phase 1: Integration and time recording | 8 weeks | 25,000 euros | 85,000 euros |
| Phase 2: Quoting | 8 weeks | 30,000 euros | 120,000 euros |
| Phase 3: Invoicing and reporting | 8 weeks | 20,000 euros | 65,000 euros |
| Total | 24 weeks | 75,000 euros | 270,000 euros |
The project's ROI was 260 percent in the first year, with payback in under 4 months (see how to calculate automation ROI).
Lessons learned and recommendations
- Start with the data. The first phase focused on capturing production data in real time. Without reliable data, automating the following processes would have been impossible.
- Involve the team from the start. Operators were consulted on the design of the recording terminals. Resistance to change was minimal because they understood the system eliminated paperwork, not jobs.
- Measure before and after. KPIs were defined before launch and measured monthly. This made it possible to demonstrate value to management and justify each subsequent phase.
- Don't automate bad processes. Before automating quoting, it was necessary to standardise the naming of operations and materials. Automating a disorganised process amplifies the disorganisation (see common mistakes).
- Phased implementation. Dividing the project into 3 phases with tangible deliverables every 8 weeks kept up momentum and allowed adjustments along the way.