Engineer To Order manufacturers are experiencing a transition in their industry. While overall manufacturing employment in advanced economies such as the U.S. has been declining for decades, the productivity of Custom Machine Builders has increased over the years. This is thanks to automation and the equipment built by Engineer To Order manufacturers.
What Does the Manufacturing Industry Look Like in Perspective?
Numbers from the U.S. Bureau of Economic Analysis and Bureau of Labor Statistics charted these trends between 1947 and 2011. There are a few notable findings of interest for Custom Machine Builders. They also help us understand the growing importance of software designed by and for ETO manufacturers:
- Employment in the manufacturing sector actually peaked in 1980, at close to 20 million persons. It remained there until 2000, when it took a dramatic dive that continued until early 2010. The Federal Reserve Bank of St. Louis estimated there were over 12 million manufacturing employees near the end of 2016. That is slightly higher than in 2010 and roughly equivalent to the level of the late 1940s.
- However, productivity gains have more than made up for the loss in manpower. By early 2012, a factory worker was able to produce as much output in one hour as their equivalent could in an entire day in the 1940s. There are many reasons for this dramatic long-term increase. Advancements in automation is a major component, as well as other upgrades to factories and supply chains. Today’s employees are able to do more with less than their predecessors.
- Although the number of manufacturing employees dropped off recently, the share of manufacturing within the entire economy has been shrinking for decades. It peaked in the mid 1940s during the Second World War and has been declining ever since. This trend demonstrates the industry has not grown as quickly as the rest of the economy; not a comforting thought for those not familiar with ETO software.
Looking ahead, there are many new developments that could continue to remake manufacturing as a whole. The emergence of nanotechnology and 3-D printing, for example. Without a doubt, manufacturers have a lot to adjust to in the years ahead. That’s why their ERP solutions are becoming more important than ever before. It’s also why more and more Custom Machine Builders are learning the importance of specialized ETO software.
The evolving role of manufacturing ERP systems
A modern, highly specialized ERP system is the key component in Engineer To Order manufacturing operations. Throughout your research you’ll learn software designed exclusively for ETO organizations will simplify your processes. It would integrate with multiple critical applications, such as accounting systems and customer relationship management. Such an ERP should also remove the burden of manual spreadsheet-based activities. It would ensure the full business process – from prospecting and estimating to sales and product launch – is handled smoothly. For these reasons, the ERP system must be highly specialized. This makes it easy to implement, intuitive to operate, and cost-effective to maintain. Using a general purpose manufacturing ERP for an ETO organization is like trying to fit a square peg in a round hole.
Does one ERP solution hit all of these marks? Many of them do not. There are several key issues preventing them from being optimal for the workflows of today’s Engineer To Order manufacturers:
1. Unspecialized ERP or General Purpose Manufacturing ERP
General manufacturing principles are highly different than those of the engineer to order manufacturing process. Even similar systems such as MTO and ETO, have significant differences such as the way materials are stocked. Made to order organizations employ a static, or mostly static BOM (bill of material). ETO organizations, however, need to design most projects from scratch. These processes have very different needs from each other, as well as traditional manufacturing organizations.
2. High costs
Implementation costs with most ERP systems is very high. Intimidatingly so for Custom Machine Builders. The time spent implementing can be even more costly due to the difficulty of setting them up. One vendor estimated the typical small or medium-sized business could expect to spend between $150,000 and $170,000 implementing an ERP system. That’s a hefty price tag, especially if the system isn’t a true Engineer To Order software solution. Important variables affecting the price also include the the size of the organization, the number of users and the extent of the third-party integrations. These costs, however, drop significantly if you choose a highly specialized system for your specific niche; another perk for systems that are exclusively for ETO.
3. Difficult integrations
An ERP system is not an island. It needs to be a hub for all of the important applications and workflows within your manufacturing business. It’s a role that will become more vital as innovations become part of day-to-day operations. An ERP system that doesn’t connect to your accounting platform or to your 3D CAD software is one that will cause problems. Instead, choose an ETO software system capable of being integrated with a wide range of CAD and accounting apps.
4. Jack of all trades, master of ….
ERP systems that try to do too much can quickly become the Jack, especially for custom design manufacturers. Highly specialized or verticalized systems will be best for your niche organization. Systems that try to do everything often end up doing nothing well. For example, a system that specializes in Accounting like QuickBooks will be better at general accounting functions than a system that tries to do it all AND accounting.
Total ETO: The ERP System that Meets all Your Engineer To Order Requirements
As an ETO manufacturer, you need an ERP system that can properly support your custom design business. It also needs to be affordable and accessible. Total ETO is the perfect solution in this context.
With Total ETO, you get the only software designed by and exclusively for ETO manufacturers. More specifically, Custom Machine Builders will appreciate:
- Integrations with accounting and CAD are simple.
- Automation features help replace tedious Microsoft Excel workflows
- Implementation is quick and painless.
Best of all, it will know when to innovate and when to integrate.
“With Total ETO, you get software designed by and exclusively for ETO manufacturers.”
As you move from prospecting through shipping, Total ETO is a valuable asset at every step. For example, sales teams find the graphical project tree provided during estimating useful for quotation and negotiation. It also assists with the staging of materials for production. This is critical for keeping track of parts, creating barcodes, supporting quality inspection, and shipping finished goods.
With manufacturing becoming an increasingly automated, creating more work for ETO organizations, ERP systems like Total ETO are more important than ever. Our software solution is designed by and for ETO manufacturers. Don’t leave anything to chance. Learn more today about Total ETO, and how we support Custom Machine Builders.