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 ETO job shops.
Unfortunately, some custom-design manufacturers keep procurement in the dark until the drawings and designs are 100% complete. Due to manual process to collect BOMs (bills of materials) 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, it can be a major detriment for the company. 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 engineer-to-order 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, which can lead to additional cost savings and potentially a bump in profit margins.
While there are numerous ways to effectively organize, and 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 as people scramble to find required parts. By instead communicating clearly to vendors when parts and materials are required, there are fewer surprises and less inconveniences for both sides.
3. Automate as much as possible
Manual data manipulation techniques and spreadsheets can slow down and introduce human error into the process. Introducing automation can reduce the level of data errors and boost efficiency, ensuring you buy the right parts and materials, and you receive them at the right time for the best prices.
4. Implement a highly specialized ERP system
Total ETO, an enterprise resource planning system designed specifically for custom-design manufacturers, utilizes a separate engineering screen to manage entire projects and individual jobs by displaying a structured bill of materials hierarchy instead of a flat BOM. With this ability to visualize the BOM, engineer-to-order manufacturers have more flexibility in quickly finding 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, while holding back assemblies that are still 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 quickly flag and highlight items that need attention for Procurement. By getting this information to Procurement quickly and efficiently, Procurement can spend less time on clerical work and spend more time shopping for best prices and delivery, thus allowing projects to ship more quickly and more profitably.