One of the reasons behind an industrial company’s success is having integrated systems that can foster customers and supply chain collaboration and provides visibility to operations which addresses the challenges developed during the manufacturing operations. Engineer to order (ETO) is a new innovative approach followed by the companies to design and manufacture a product based on client’s specifications. There are two phases attached to the process of the tailor-made product. The first is the activities added to the product during lead time and second being the unknown engineering details and specification of the product. Manufacturing such type of product requires a substantial amount of design and engineering analysis.
ETO is a complex ‘one of a kind’ process which aids in manufacturing a new, unique product that has no fixed design. ETO firms use these techniques to boost sale and improve profit margins of a company. ETO product requires the mandatory involvement of both the client and company to work together. Such enterprises provide end to end manufacturing of unique product by working closely with the client from quote to invoice process. ETO is found in every other industry, for example, power plants, electrical switchgear, industrial cranes, fire trucks and many more. The growth of the industry has increased the overall demand for the customised products which in turn has fragmented the market. An ETO firm responds to this fragmented market by fabricating one of a kind product.
The Non-Identical Process Flow
Best designs are often the results of a strategic plan and its process flow. However, ETO organizations don’t follow any sequencing steps leading to the manufacturing of the on-demand product. The general way of designing a product is to create a design, get customer’s approval, test it, change according to specification, re-submit it and finally send it again for final client approval. As engineer to order is a complex process, it requires an on-going documentation of every step, the company takes in manufacturing.
A Glance into ETO Challenges
When multiple parties are working together, problems are bound to arise in the manufacturing process. As the product is not fully engineered, virtually everything is unknown to the manufacturing company. The pre-production process involving drawings, performance data, and lead time, all are unknown. To access these, customers must be involved with the company throughout the project. Insufficiency in time to develop detailed design within responsible time can make enterprises in estimating lead time and associated costs. Such estimates and guesswork can erode the profit margin of the company. This guesswork can be avoided by creating a contingency plan on price and lead time. However, firms must also be careful with the contingency plans as too much dependence on such a plan can lead to loss of the whole job and not enough plans will affect the profit margin. The information and specification regarding product must flow between ETO firm and customer constantly. This constant flow of information creates chaos for the management. Furthermore, acquiring equipment before and in-between production can affect cost and time issues. The specifications of the components are revised several times. Establishing ground rules upfront will make both clients and company happy.
Talking About the Solution
One approach in solving problems is to build a separate system just for them. Costs can be estimated based on previous and similar projects. More accurate estimates will account for a better production. Linkage of Engineer design and manufacturing removes re-keying of data from CAD to ERP. In the production phase, monitoring work will improve quality control mechanism. Material tracking from purchase to assembly will aid in maintaining inventory. Consequently, this tracking will enable quality control and will help in detecting defected parts and batches.
It’s important for the executives to observe the trends of technology to improve their overall ETO manufacturing. Companies should form a commune with these trends and use them in order to increase their production. Connectivity has been the major drive force in the recent trends. The firms that adopt these trends and break traditional ways and prove their value to the customers will thrive in the upcoming competition. Internet of things has connected machines together from all around the world. IoT will continue to shape the industries in upcoming years by integrating machines. Analysts expect IoT to connect thirty billion machines, generating $1.9 trillion by the year 2020. By using IoT, the industry will be able to fine-tune the production phase. This huge control will aid in tracking, analysis and streamlining operation that too with the lowest cost. IoT does bring the security vulnerabilities along with it and that’s why Cybersecurity will also play a crucial role in upcoming trends. These unwanted assaults will render companies in brand erosion and monetary losses. A company needs to form partnerships with the right cybersecurity providers to tackle these cyber-attacks. The software will also play a major role in the technology. It can be integrated into every machine assisting humans to eliminate preliminary mistakes and will also aid in the monitoring system, providing data, and managing data.
Industries can’t wait to see how the technology advancements will unfold. It’s also exciting to see that manufacturers are making the necessary investments for their employees to make sure their investments in new systems and equipment will pay off, enabling them to compete globally through 2020 and beyond.