A big problem for engineer-to-order (ETO) businesses is that they have many unique requirements that make traditional ERP systems unsuitable. The engineer-to-order sell is relatively small and the businesses themselves also tend to be small. The result is that the larger ERP software businesses 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 generate-to-stock, assemble-to-order, generate-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 measure . There is generally 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 dont 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 distinctive industry segment. Other synonymous terms are "project-based" or "custom" manufacturers. ETO companies typically have specific 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 businesses contruct unique products constructed to customer specifications. Each merchandise requires a unique set of merchandise numbers, bills of material, and routings. Estimates and quotations are required to win business. Products are complex with long lead times, typically years or even years. Unlike standard products, the customer is heavily involved throughout the entire develope and manufacturing process. Engineering changes are a explicit way of life. Material is purchased not for inventory but for a distinct project. All actual costs are allocated to a project and tracked against the original estimate. Once complete, the product is typically installed at the customers site. In most cases, aftermarket services continue throughout the life of the merchandise ."

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 understanding and to discuss challenges and business issues.

Thomas R. Cutler
info@etoinstitute.org
www.etoinstitute.org
954-486-7562