Key Takeaways
- In ETO manufacturing, bottlenecks between procurement and engineering can be detrimental. It’s important to give procurement early access to the BOM to keep the project running smoothly.
- Don’t think of optimizing the supply chain as a big overhaul. Instead, remember that you’re streamlining your processes and improving your workflow.
- Find ways to automate your processes. Not only does it free up your staff, but it also reduces errors. The best ERP warehouse management system is one that fits your ETO workflow and speeds up each project.
If the engineering department of an Engineer To Order manufacturing company acts as the brains of an organization, then the shop would most certainly be the backbone.
The materials and parts in the shop prop up the business and it’s these pieces that allow the production line to build the final product. Any congestion in the supply chain or bumps in the overall efficiency in procuring materials will ultimately slow down the manufacturing process and even create unexpected downtime at Engineer To Order (ETO) job shops.
Unfortunately, some custom design manufacturers keep procurement in the dark until the drawings and designs are 100% complete. Due to the manual process of collecting the bill of materials (BOM) from spreadsheets and the ever-changing requirements that ETO organizations deal with on a daily basis, engineers prefer to perfect the BOM before signing off and letting procurement start gathering required materials.
However, without an optimized procurement and supply chain in place, the company can suffer. This makes it imperative for manufacturers that build Engineer To Order products to run a streamlined and efficient procurement workflow to boost overall productivity across the entire enterprise.
Managers at ETO manufacturers can incorporate these tips to improve workflows and efficiency:
1. Don’t hesitate to reorganize
Although overhauling might seem like a waste of resources, a quick reorganization can ultimately streamline the workflow and boost the overall efficiency of the workers. This leads to additional cost savings and potentially a bump in profit margins.
While there are numerous ways to effectively organize, each company will have to determine what best suits its needs.
2. Require vendor delivery commitments
One of the biggest obstacles to maintaining an efficient supply chain is delayed deliveries. If a shipment of materials arrives late, it creates a backlog of products and potentially leads to a flurry of confusion. By instead communicating to vendors when materials are required, there are fewer surprises and inconveniences for both sides. This is difficult for ETO manufacturers, though, because part tracking, both internal and external, is either non-existent or unreliable. Procurement software can help, especially when it’s combined with an ERP warehouse management system.
3. Automate as much as possible
Manual data manipulation techniques and spreadsheets can slow down and introduce human error into the process. Implementing automation can reduce the level of data errors and boost efficiency. This, like procurement software, helps confirm you buy the right parts and materials. It also ensures you receive them at the right time for the best prices.
4. Implement a highly specialized ERP system
Total ETO, an ERP system designed for Engineer To Order companies, utilizes a separate engineering screen. They manage entire projects and individual jobs by displaying a structured bill of materials hierarchy instead of a flat BOM. Being able to visualize the BOM, ETO manufacturers have more flexibility to the materials and modifying requirements for changes. Total ETO integrates with any CAD system to collect BOM and vital part information, further reducing double entry.
The unique hold-and-release system allows engineers to release long lead items and completed assemblies to procurement early. But they’re still able to hold back assemblies that remain in the design phase. The BOM is not static, meaning engineers can continue to change designs and required parts even after releasing to procurement. Total ETO reconciles these changes automatically to flag and highlight items that need attention from procurement quickly.
By getting this information to procurement quickly and efficiently, they’ll spend less time on clerical work. When more time can be spent sourcing goods you’re more likely to get the best prices and delivery. This makes a big difference, allowing projects to ship more quickly and more profitably. Most ERP warehouse management systems can’t make the same promises, and procurement software has limited functionality.
Custom Machine Builders have always been innovative, their creativity and commitment to problem solving is impressive. Conversely, it’s also impressive to see what an ERP designed for Engineer To Order manufacturers can do. It’ll be more compatible with Custom Machine Builders than a typical ERP warehouse management system. Experience it yourself, request a demo today.
Written by RJ Ahuja
