Key Takeaways
- With Engineer To Order manufacturing, companies can provide custom solutions. While custom manufacturing is rewarding, organizations still struggle with tasks like quoting projects, tracking parts, and managing the BOM.
- Production planning is straightforward for repetitive manufacturers, but for ETO teams it’s challenging, especially without an ERP designed for custom manufacturing.
- When ETO manufacturers integrate their CAD with an ERP that matches their unique workflow, engineers can release the BOM or parts of the BOM to procurement early, improving buying power. Any change orders that happen after the BOM is released is managed by your ERP.
From Concept to Customer: Navigating the Path to Efficient ETO Manufacturing
In today’s dynamic market, the demand for customized, innovative solutions is driving the evolution of Engineer To Order (ETO) manufacturing. As businesses strive to meet unique customer requirements, the art of tailored solutions is in demand. Enterprise resource planning software helps many businesses, even some manufacturers of standard products. ETO organizations, however, need an ERP for custom manufacturing.
The ETO marketplace extends to a variety of industries; aerospace, medical, food and beverage, etc, where standard off-the-shelf products may not suffice. The ability to customize products to exact specifications enables businesses to differentiate themselves and cater to niche segments.
By embracing Engineer To Order manufacturing, companies can offer solutions that aren’t available through traditional manufacturing. Such unique machines can make the ETO manufacturer an industry leader in innovation and flexibility.
While it can be rewarding and inspiring to be a Custom Machine Builder, there’s also a frustrating side to ETO. The entire organization feels it, including sales teams that struggle to quote a project, and accounting departments tracking work-in-progress (WIP).
Engineering, procurement, and manufacturing are at the heart of each ETO project. They work together to ensure all the client’s problems are addressed by their custom solutions. These are also the teams that struggle the most in an Engineer To Order environment.
At least, until, the Custom Machine Builder finds an ERP designed to match their unique workflow; an ERP for custom manufacturing. When that happens – accuracy, efficiency, and profitability increase.
Here we explore how manufacturing processes can be improved in Engineer To Order organizations, including production planning, the BOM, inventory management, and more.
Engineer To Order Manufacturing
Engineer To Order manufacturing is a process of gradually creating and improving a design. Each change is in response to assessments with the client and their needs.
Without knowing the final specifications, or materials required, engineers at an ETO manufacturer often work very closely with their customers.
Building strong relationships with clients and creating innovative solutions can be very rewarding.
This sense of accomplishment, however, can be overshadowed at times by the frustrations that come from an erratic workflow.
ETO processes are more complex, therefore, a successful project requires complete visibility. Otherwise, it’s easy for mistakes to compound; leading to lost profits, wasted time, and irritated staff. An ERP for ETO manufacturing makes a world of difference.
Production Planning
For most manufacturers, production planning is pretty straightforward. Management or teams work together to ensure there’s enough staff, raw materials, and other necessities in time for a project. Such planning helps a manufacturer meet their production deadlines while reducing production time and costs.
However, ETO manufacturers, such as Eagle Technologies, have more difficulty planning production or forecasting demand than standard production lines.
That’s because Integrators, Panel Shops, and OEMs rarely build the same thing twice.
This means design time is much longer. Custom Machine Builders get many change requests from clients, even after parts are purchased… even after manufacturing has begun! This collaboration with clients is time-consuming but it helps ensure they get exactly what they need. Custom solutions like these are usually worth the time and money, especially when working with innovative ETO manufacturing teams.
While production planning is more difficult for original equipment manufacturers (OEMs), there are ways to improve your planning and estimates. Help comes from using an enterprise resource planning (ERP) system that captures data these machine builders are currently missing. This data and more only comes from an ERP designed for custom manufacturers.
The trick, as we mentioned above, is finding an ERP/MRP that matches your workflow. An ERP designed for ETO manufacturing provides Custom Machine Builders with data and solutions that are just as customized as your machines.
Working with an ERP for Manufacturing Changes How You Work with BOMs
Every manufacturer begins its production journey with an idea and a bill of materials (BOM).
Ideally, an engineering team would present the BOM to procurement as early as possible. This helps ensure every part needed is delivered on time, keeping the project running efficiently.
Unfortunately, for Custom Machine Builders, engineers prefer to hang on to the bill of materials as long as possible.
When it comes to custom designs, clients often request changes to the design, even after the BOM has been released. This results in inventory control issues, and downtime as the team waits for the newly ordered parts.
Releasing the BOM early to those handling procurement not only means getting a head start on long-lead items, but it also allows for opportunities to find better prices. If you’re not already working with a preferred supplier, the procurement team needs time to cost out the BOM and find reliable vendors for each item.
Total ETO takes care of these concerns; an ERP & MRP designed custom manufacturers. The software allows you to track changes to the BOM at any stage of a project.
Your team will also have more freedom, accuracy, and confidence as information is easily shared across departments.
Inventory Management
Proper inventory management is critical to all manufacturers. Too much inventory can take up resources like capital and warehouse storage. Too little inventory, however, can result in longer lead times for customers and lost revenue for the company. If manufacturers of standard products have a difficult time, how is an Integrator, Panel Shop, or OEM supposed to manage inventory?
Many Custom Machine Builders struggle by manually entering parts and stock. This isn’t just exhausting, it often leads to simple errors that cause complicated, expensive problems. Other Engineer To Order manufacturers try inventory management software. However, since the majority of manufacturers build standard products, most of those platforms fail instantly for ETO.
Your ERP Should Provide Features for Engineering
For Engineer To Order manufacturers, the solution lies in an ERP/MRP that matches their workflow, an ERP for manufacturing. Most ERPs focus on accounting more than any other department. ETO builders need the focus to be on design and engineering. The software should be able to integrate flawlessly with your computer-aided design (CAD) system such as SOLIDWORKS and Inventor. Doing so makes your BOMs dynamic.
They adjust in real-time, so they can easily manage any changes made to the design and update procurement with the latest BOMs immediately. As discussed above, early access not only prevents downtime but allows the procurement team time to source the best materials at their best prices.
Inventory management for Engineer To Order is simplified and accurate with Total ETO. It’s easy to search the system for previously used parts, along with their complete history. Your team can save time by grouping common parts or suppliers across multiple projects. You can also add to PO’s quickly, making revisions as changes occur, including revised delivery dates. Plus, you can set automatic inventory reorder points. This ensures requisitions appear in purchasing for stock that falls below your ideal levels.
Quality
There are a lot of differences between Engineer To Order manufacturers and make or build to order organizations. One thing they have in common though is the importance of quality in their work. As a Custom Machine Builder, your clients originally came to you because of your innovative reputation and creative solutions. They keep returning – largely due to the quality of your work.
Quality is a reflection of your business. It’s a culmination of your employees’ skill and commitment, as well as your business processes and standards. There are also different ways to approach the subject of quality:
- Quality control (QC) often focuses on meeting specifications and tolerances. Mechanical parts should operate efficiently, safely, and exactly as designed. Electronics often require testing using meters that measure the flow of electricity. Quality standards and testing will vary between manufacturers and industries. That’s why there are a variety of quality control charts. Machinists and engineers often use these to determine how well the finished product executes its tasks.
- Quality assurance (QA) on the other hand refers to best practices. It’s what management and by extension, employees do to ensure quality standards remain high and are consistently met. To do this, the team typically has protocols in place to evaluate all stages of production. Their goal is to find areas for improvement; it’s a proactive approach that works well for many manufacturers, including Engineer To Order manufacturers.
Both QA and QC require a committed team and reliable data. This can be difficult for ETO manufacturers. Engineers at these organizations are extremely busy, and without the right ERP, they lose the necessary data.
A Remarkable Difference with ETO ERPs
When a Custom Machine Builder uses an ERP/MRP designed specifically for Engineer To Order manufacturing, the entire team from engineering to procurement, sales, accounting, and manufacturing have reduced workloads.
This alone can help increase the quality of your final product. However, when you start working with the data that Total ETO collects and organizes, you’ll end up simplifying your processes, making them more efficient, accurate, and profitable.
Total ETO makes it easy to track your project workflow and see reporting metrics at all stages. This empowers management with real-time information. You’ll also be able to:
- Set project milestone dates for key events.
- Link your files to the project for quick reference without creating duplicates.
- Add notifications for key staff as each department completes its tasks.
- See project costing, material status, and more in dozens of pre-designed reports. Or add your own customized reports to the system.
- Export any report directly to Excel, Word or PDF.
- Eliminate the procurement-engineering bottlenecks when you integrate your ERP with CAD systems including SOLIDWORKS and Inventor.
Lean Principles in ETO Manufacturing
The application of lean principles in Engineer To Order is instrumental in optimizing operational efficiency. It’s a priority for many manufacturers to minimize waste and improve productivity. By embracing lean methodologies, businesses can streamline their workflows, eliminate non-value-added activities, and maximize resource utilization.
Thereby driving continuous improvement and delivering exceptional outcomes with precision and speed. One of the core tenets of lean manufacturing in the ETO context is the relentless pursuit of operational excellence through the elimination of inefficiencies. Working with an ERP for manufacturing is the best way to boost efficiency.
Raising the ETO Manufacturing Bar
Engineer To Order is a growing manufacturing sector built around flexibility. It’s fair to say that a dynamic marketplace requires Dynamic BOMs.
When ETO manufacturers find an ERP that is just as flexible as they are, they begin fostering a commitment to growth and excellence. Workloads are reduced throughout the organization while quality and customer satisfaction continue to rise. Even in the areas where Custom Machine Builders suffer the most, such as production planning, there are still measurable improvements, making these tasks easier and more accurate.
What Other Custom Machine Builders are Saying
“Within weeks of implementation, we were seeing a 31% improvement in our value added work”
Suren Moodley, Chief Operating Officer, Foodmach
“The support has been top-notch. Total ETO is a fantastic group to work with.”
Jason Cleveland, VP of engineering, Eagle Technologies
“Total ETO has given us the tools to win bids successfully and become a world wide competitor”
Tom Hirschler, Purchasing & Logistics Manager, Metform International
Read more reviews and case studies here.
Packages start at $7,500/year for 5 seats and include human-guided implementation and training.
Total ETO is a Totally Better ERP and MRP software, providing better efficiency, accuracy, and profitability for Custom Machine Builders. Our software is easy to implement and use, affordable, and backed by a team of industry experts with a passion for the success of every client.
FAQs About ETO Manufacturing
1. How can my manufacturing department benefit from Total ETO?
A big challenge for Engineer To Order manufacturers is having materials ready for when manufacturing needs them. Total ETO simplifies the staging of materials for production. Receiving can quickly view purchase orders, log received parts, produce quality inspection reports or initiate non-conformance reports.
As items are received or issued from allocated inventory, purchasing is instantly updated on the status of materials by job. Total ETO includes real-time tracking and managing of your inventory, including work in progress (WIP), so materials are available when needed.
Benefits to you:
- Purchasing can source materials and issue POs quickly.
- Materials are available when manufacturing needs them.
- There is no costly delay in the project.
2. Can I track Non-Conformances in Total ETO?
Total ETO, an ERP for manufacturing, includes an effective non-conformance (NC) system, allowing users to raise NCs from several different areas and allows users to track various causes of the issue, such as defective parts, drawing or design errors, and manufacturing errors. Non-conformances are attached to jobs and can have both labor and material costs associated to them. Coupled with powerful searches and powerful reporting, our Engineer To Order software solution provides the ability to identify the causes of non-conformances and allows users to prevent them from occurring on similar future projects. All this from an ERP built for manufacturing.
Benefits to you:
- Engineer To Order manufacturers constantly face non-conformances and need a simple system to deal with the complexity of this process.
- Knowing how to avoid certain errors in the future will affect your company’s bottom line and improve product quality.
3. How does Total ETO track my customer’s “Jobs”?
Total ETO provides top-level project and job structure, allowing typical orders (projects) containing deliverables and services (jobs) to be properly arranged, grouped and tracked. Additionally, our Engineer To Order software hierarchically arranges jobs for better tracking of their expenses, providing costing reports at all levels.
Benefits to you:
- Management can be more efficient with better access to costs and reporting.
- Better control over complex machinery as it can be divided up into smaller easier to manage sections via Projects, Job hierarchies and even at the Assembly level.
- Greater flexibility in all areas including but not limited to estimating, design, manufacturing, procurement, and costing.
4. How does Total ETO manage my Bill of Materials?
Total ETO, an ERP for manufacturing, provides a separate engineering screen to manage entire projects and individual jobs. Quickly and easily produce your bill of materials in a hierarchy, rather than a flat BOM. You’ll appreciate seeing it displayed in a flexible graphical user interface. Seeing the BOM this way gives designers greater flexibility to break down assemblies and easily manage changes, including quantity or parts within the assembly.
Benefits to you:
- Total ETO is an ERP for custom manufacturing. Our software was built by engineers for engineers and understands your need for a structured BOM.
- Fewer setbacks as engineers can logically break up complex machinery into a series of nested sub-assemblies.
- Designers and engineers are more efficient as a structured BOM provides them with a quick and organized means of finding materials and managing change requirements.
5. How are change orders handled within Total ETO?
There are times when your customer will request changes to an order after work has started on it (and occasionally after the design has been issued to purchasing and manufacturing) which affects design time and purchasing efforts. Other times, manufacturing often identifies areas where the design needs to be changed, requiring engineering to modify drawings and the BOM, while purchasing is left to change purchase orders.
These common issues are easily resolved with Total ETO’s change order features. Change orders assist you in estimating the new labor and material requirements for the new scope of work, optionally adjusting the job’s sales price, and involving other users in the process, ensuring they’re updated, and kept in the loop.
Benefits to you:
- You can keep your clients happy.
- Your staff won’t lose valuable time and resources.
- Change requests won’t have such a substantial impact on your bottom line when dealt with in time.
Written by Taylor Dykstra