Manufacturers Face ERP Software Selection Challenges with the
ETO Institute
A big problem for engineer-to-order (ETO) companies is that
they have many unique requirements that make traditional ERP
systems unsuitable. The engineer-to-order market is relatively
small and the companies themselves also tend to be small. The
result is that the larger ERP software companies are more
focused on the needs of the larger and more numerous repetitive
manufacturers.
In the manufacturing software industry the terms are clearly
recognizable. The differences between make-to-stock,
assemble-to-order, make-to-order, and engineer-to-order are
clearly understood.
These distinctions are not so clear for those in manufacturing
evaluating software systems for the first time. There is often a
mismatch in how they describe their business. Companies may
describe themselves as job shops or even make-to-order when they
are really engineer-to-order.
Software vendors do not help the situation. Many vendors don't
want to eliminate themselves from opportunities so they cast
their net as wide as possible. They claim to support a multitude
of manufacturing styles when on closer examination they are best
suited to one.
The term engineer-to-order (ETO) denotes a style of
manufacturing rather than a specific industry segment. Other
synonymous terms are "project-based" or "custom" manufacturers.
ETO companies typically have distinct characteristics about the
way they conduct business that differentiate them from discrete
or repetitive manufacturers.
According to Thomas R. Cutler, spokesperson for the ETO
Institute, "ETO companies build unique products designed to
customer specifications. Each product requires a unique set of
item numbers, bills of material, and routings. Estimates and
quotations are required to win business. Products are complex
with long lead times, typically months or even years. Unlike
standard products, the customer is heavily involved throughout
the entire design and manufacturing process. Engineering changes
are a way of life. Material is purchased not for inventory but
for a specific project. All actual costs are allocated to a
project and tracked against the original estimate. Once
complete, the product is typically installed at the customer's
site. In most cases, aftermarket services continue throughout
the life of the product."
The ETO Institute (www.etoinstitute.org) is an independent
organization committed to helping North American
engineer-to-order (ETO) manufacturers compete more effectively
in an increasingly competitive global environment. Our resources
section provides a list of articles and white papers focused on
manufacturing and, in particular, engineer-to-order. The
bulletin board provides a forum for organizations to share ideas
and information and to discuss challenges and business issues.
Thomas R. Cutler info@etoinstitute.org www.etoinstitute.org
954-486-7562