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To maximize profits, Engineer To Order manufacturers should cut waste

Total ETO

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Manufacturing companies, especially those that build Engineer To Order products, must always be on the lookout for ways to trim waste, improve efficiency and, ultimately, boost profit.

 

Without actively working toward these goals, it can be difficult, and in some cases not even feasible, for an Engineer To Order company to be competitive yet remain profitable.

 

Reducing downtime

Downtime is costly.  The key to reducing downtime at Engineer To Order manufacturers is to ensure materials are available when you need them.

 

Long Lead Items

  • One of the keys is to ensure procurement can start procuring materials earlier. Engineers tend to withhold the BOM until the entire design has completed. Long lead items need to be acted on as soon as possible to avoid delays in shipment.

 

Stay on top of vendors

  • Asking a vendor to deliver the materials you desperately need on time without staying on top of them is a bit like making a wish on a star. It might come true from time to time, but more often than not, you’ll be left wishing you didn’t leave it all to chance. Stay on top of your vendors and ensure they are committed to delivering those much needed parts on time.

Shop around

Long lead items aren’t the only reason to get items to procurement more quickly. The more time procurement has, the more shopping around can be done for savings. Plus you can avoid rush delivery charges and the mad scramble at the finish line.

 

 

Use those left over parts

Most custom design job shops don’t stock much inventory, but most have a pile of left over parts from past jobs. You never know when you might need them again, so keep track of them and ensure you use them first if and when you can.

 

“If manufacturers fail to take the necessary steps to improve production, they can potentially end up with diminishing profits. As various pressures weigh on this sector, companies need to do all they can to trim waste, spur growth and boost profits.”

 

 

Implement a specialized ERP system

Total ETO is the only ERP system designed by and for Engineer To Order organizations.  It allows engineers to release long lead items and completed assemblies early while engineers continue designing the remainder of the project.  Procurement has more time to check inventory and shop around for the best price and delivery, resulting in savings and improved efficiency.  Total ETO also allows procurement to quickly review items on order and stay on top of vendors to ensure timely delivery.

 

Contact Total ETO to request a demo today!

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