What is Engineer-to-Order?
Engineer-to-order (ETO) is a way of making things where different product versions are made just for each customer. It is often used in chemical, medical, and industrial machinery fields where goods must be customized or engineered uniquely before being sent to the customer.
With the engineer-to-order method, manufacturers can set their goods apart from rivals because customers can pick custom designs that meet their needs. Additionally, because each item is made specifically for each customer, delivery times are usually longer than those involved with mass production.
Synonym
- ETO
In the engineer-to-order process, the customer and the engineering team work together to create, build, and deliver a product that meets the customer’s exact needs. There are several steps in the process:
Configuration of the Product
The first step is after the customer, sales, and tech teams work together to determine what the customer wants and needs. CPQ (Configure Price Quote) software lets the customer and salesperson work together to make a valid product configuration and a correct price quote. Visual configuration features in CPQ for production let you make 2D or 3D images of the product to improve the buying experience and ensure the company makes the product exactly how the customer wants it.
Based on these needs, the engineers then make a complete design proposal. This usually includes specifics like size, form, materials used, and other features the customer has requested. Work on making the product or service can start as soon as both sides agree to the design proposal.
Getting Components
Next, the parts needed for production must be bought from sellers who meet specific standards, such as those for quality control and cost control. Depending on the complexity of the job, getting different parts or vendors from different places might be needed. Once all the needed materials are found, they can be assembled into a single unit according to the plan instructions.
Making things
All the parts are assembled at this point in the ETO process, and the finished product is made according to its plans and design requirements. This could involve putting things together by hand or using machines based on what is needed for quality standards, cost savings, and production efficiency.
Making sure of the quality
The next step is testing and quality assurance, which ensure that all the parts work together as they should and meet any quality standards specified in the design specification. Any problems at this point need to be fixed before the end product or service is put together or delivered.
The delivery
Finally, after completing all testing and quality assurance checks, the finished product is given according to the agreed-upon standards and timelines set out in both parties’ contracts.
Because they are more personalized, ETO processes often cost more than mass production methods. However, they give users more choices about how the product looks and works.
Advantages of Engineer-to-Order
Engineer-to-order (ETO) is a business that focuses on making unique solutions tailored to each customer’s needs. This business model is better than traditional ways of making things in many ways, such as being more flexible, providing better customer service, and being able to adjust more quickly to changes in the market.
Customization: One of the best things about an ETO business plan is that it lets you make products or services that fit the needs of each customer. Businesses can create solutions that meet the exact needs of each customer by customizing a product or service for them. This makes the customer happier and more loyal. Customization also lets companies make unique goods and services, giving them an edge in their field.
Being flexible
Another good thing about the ETO business plan is that it can be used with different production cycles. Companies can make custom solutions whenever someone asks for them, and the lead times are usually shorter than for mass production of standard goods. This method is also flexible, so companies can quickly adapt to last-minute changes or customer requests to give them the best solutions as quickly and efficiently as possible.
Possible savings on costs
Scalability is another way that ETO can help companies save money; they can quickly increase or decrease production cycles based on their needs without having to pay set costs for buying large amounts of stock all at once. Because this business plan is custom, it also doesn’t require the costs of research and development that come with making new products. Since every item is different, there are no extra R&D costs after the initial design step. Lastly, ETO could lower shipping costs because orders can go straight from suppliers to customers instead of going through a central warehouse first. This saves money on transportation costs.
Support for Customers: Another benefit of ETO is better customer service because it lets businesses focus on each customer instead of making a lot of goods for a large market segment. Businesses can give better service when offering personalized solutions because they know each customer’s wants and preferences better.
Cons of Making Things with ETO
In some cases, ETO manufacturing can be helpful, but it also has some problems.
Price Goes Up
One problem with engineer-to-order production is that it costs more. There are often extra costs for materials and design that wouldn’t be there if the same product were mass-produced because each one is made to order for a particular customer. Also, testing may take longer than making generic goods because the customer’s needs must be met.
Needs Specialized Skills
Engineer-to-order manufacturing also has a downside: it needs specific skills and knowledge that can be hard to find in the market. Sometimes, businesses need to hire outside experts or consultants who can make unique designs that meet customer needs. Because more work needs to be done, this also makes prices go up.
More time to make things
Another problem with ETO is that it can take much longer to finish than standard mass production methods because it is customized. Research and development often need more time than planned because of project deadlines. This can make each order take longer and cost more. Also, the cost per unit can get very high because each order needs extra planning and setup services. This makes it hard for businesses to stay competitive.
Software for Engineers to Order Manufacturing
Engineer-to-order (ETO) manufacturing software helps businesses oversee the creation of custom-designed goods. It has many features that can help businesses streamline their engineering processes, such as making thorough designs and specifications, keeping track of orders, and managing inventory.
Companies can use the software to help them design, configure, simulate, plan resources, analyze costs, and handle a product’s lifecycle. This makes sure that all orders from customers are filled quickly and correctly. It also helps businesses stay competitive in the global market, which changes quickly by letting them quickly make new goods or changes to old ones.
ETO manufacturing software helps develop new products. It has many other benefits, such as making the production process more flexible and making it easier to see how projects are going. By using ETO software, companies can cut down on mistakes in production schedules and avoid expensive delays caused by wrong data or poor communication between customers and suppliers. The software also gives makers real-time data on how well their production is going so they can make intelligent choices about their processes.
It’s also worth mentioning that ETO manufacturing software is scalable, which means it can be used for both small and big projects. It’s the perfect answer for any business that wants a complete plan for managing its custom engineering jobs.
ETO manufacturing software can be used in many fields, such as aircraft, automotive, medical device manufacturing, electrical equipment manufacturing, and industrial machinery manufacturing. Businesses using this kind of technology can boost production while lowering costs. On top of that, they can give customers goods that are highly customized to their needs and wants in less time than they could without the software.
Businesses can simplify their quote-to-cash process with ETO software because it works with other business operations software like CPQ, ERP, and billing.
Integration of CPQ
CPQ (configure-price-quote) integration with engineer-to-order manufacturing software is changing the way companies make unique goods and services for their customers. By streamlining the configuration, price, and quoting process, CPQ helps businesses make quotes for custom goods and services quickly and correctly. With CPQ, data accuracy is better because automated processes only allow proper product configurations to happen. This helps reduce the waste of ordering and setting up products incorrectly. CPQ integration with ETO also makes it easier for makers to keep track of what customers want so they can better serve them in the future.
Putting ERP Together
Companies can improve efficiency, react faster to customer needs, and streamline product flow by combining engineering-to-order (ETO) software with enterprise resource planning (ERP) systems. The integration of ERP makes sure that all data linked to the engineering-to-order process is always up-to-date and easy to find.
ERP software helps keep production running smoothly by providing real-time information on parts and raw material availability. It helps build better customer relationships by giving them more accurate information about when their orders will arrive and how they are progressing. ERP software can also be used to keep track of packages as they move from the plant floor to the customer.
Integration of Billing
Firms can save time and money by combining billing and engineer-to-order manufacturing software. When companies automate their billing, they don’t have to manually put data into different systems or spend extra time checking the information. Integrating these two systems also makes it easier and faster for manufacturers to keep track of customer orders, handle inventory, set prices, make invoices, and send bills to customers on time.
