Nothing excites me more than the resurgence of US manufacturing. It’s comeback has a multiplier effect on the US economy, for every dollar in final sales of manufactured products, $1.33 goes into output. This effect accounts for the largest multiplier of any sector in the economy. I came across this article by Seeking Alpha and condensed it below. The article describes the continued growth in US manufacturing.
In an earlier post, we discussed six points ETO manufacturers should consider when searching for ETO software. Although it may seem easy, finding the right software solution for an ETO environment is actually a time-consuming, difficult process.
Unlike traditional manufacturers, who are usually preoccupied with producing better products by fine tuning certain repetitive processes, ETO manufacturers face a variety of unique challenges, which put a lot of responsibility on operations managers. To manage ETO environments efficiently and reduce cost overruns, which are significantly higher in the ETO sector than in traditional manufacturing, manufacturers need native ETO software solutions, which can be integrated seamlessly into organizations. In continuation to our previous blog post, here are five more points to consider when choosing an ERP solution for ETO manufacturing.
- Flexibility: ETO companies are no longer required to implement massive, complex, and costly one-size-fits-all software solutions. Today, they can find dedicated, fully integrated yet flexible ERP systems, which provide all the tools an ETO manufacturer may need to meet industry-specific requirements for project visibility and control. As ETO manufacturers must synchronize a variety of processes, from the acquisition phase to production scheduling and shipping, in order to ensure compliance with customer specifications, work more efficiently, and reducing waste, a series of agile ETO software solutions have been developed to allow manufacturers add more functions and applications as new requirements arise.
- Visibility: An effective ETO system should provide real-time visibility into all operations to facilitate engineering and production tracking along with the pro-active management of various areas, including product and process design, scheduling, quality, etc. Since full process traceability is critical for competitive planning in high-precision manufacturing environments like ETO, you should look for an ETO solution with advanced tracking features, which can trace flow paths upstream and downstream from any point. These features can help minimize and even eliminate many issues, including inefficient order flows, missing inventory, late and inaccurate deliveries, and even non-recoverable expenses, which often translate into profit margin disappointments.
- Planning: ETO operations are inherently complex processes. This means that they cannot be managed with traditional production planning and scheduling systems. Since ETO processes require time-efficient planning and monitoring along with exception-handling tools, specialized software solutions focus especially on the pain points that most ETO manufacturers complain about, making available advanced alerts for execution deviations, planning alternatives, capacity or duration requirements, etc.
- Deployment model: Not only ETO software implementation and maintenance can be a nightmare for in-house IT teams; costs will also be higher for organizations. Therefore, anticipating and understanding the effects a specific deployment model can have on your entire business is critical to prevent various issues that may lead to costly disruptions. As you may already know, a cloud deployment model provides one of the best software alternatives for ETO manufacturers not only because it delivers a cost-effective, comprehensive suite of business applications, but also because it supports continuous adjustment and improvement. Additionally, cloud-based solutions can be customized and configured for each manufacturer.
- Performance: A very important aspect for an ETO manufacturer is that cloud-based solutions make integration with other applications faster and easier. With a cloud system, any engineer can accomplish more in less time, regardless of whether he’s closer to engineering design or to manufacturing processes. Thanks to the advanced features and interfaces included in the latest ETO software products, engineers can now steer projects across different departments, create custom designs without using complicated codes – now, this can be done by simply selecting, dragging, and dropping certain elements – and then adapt designs almost instantly to changing customer needs.
Any ETO manufacturer whose top priority is a high return on investment already knows that profit is partially realized from process enhancements resulting from effective ETO software. But choosing the right ETO solution for your organization can be a daunting task, even if you’ve learnt the aforementioned points by heart. If the wrong system is chosen, costly workarounds that need to be instituted to correct deficiencies may bury your business; conversely, if the right system is selected, chances are that you’ll be able to exceed expectations. This will help you conquer new markets and expand your business beyond geographic borders.
Anyone who has worked in the engineer-to-order (ETO) manufacturing sector long enough knows that regular enterprise software solutions require significant customization to meet the needs and demands of ETO manufacturers. Since most ERP systems aren’t specifically designed for project-oriented environments like ETO, but for traditional manufacturing, finding an ETO software solution able to meet unique ETO manufacturing requirements isn’t easy. Things tend to become even more difficult if we take into account additional aspects, such as increasingly complex processes typically accompanying business growth.
Though a regular ERP solution can help ensure accuracy and consistency of manufacturing operational data and processes, below are six points any ETO manufacturer should consider to make the right software choice.
- Functionality: Each approach to manufacturing a specific product brings along a new set of unique challenges, including tossing specifications and engineering changes back and forth between customers, ETO manufacturers, and third parties; meeting tight deadlines; and working with multiple parties for producing complex items. An ETO software solution that can help address all challenges directly and simultaneously will make the difference between success and failure. To make the most of an ETO system, it should include complex functionality for project monitoring, control, and budgeting. Specifically, it should allow you to create budgets, track labor and time, specify work breakdown structures, report data, define project predecessors and successors, revise activities, adjust engineering and manufacturing bills of materials (BOM), roll out designs directly into production, and calculate and compare actual costs to forecasts and budgets as projects progress.
- Integration: The capability of an ETO software system to integrate with existing computer-aided design (CAD) solutions is another essential point. A system supporting CAD integration eliminates double entries and human error by enabling users to import and export product-related data, such as technical drawings, graphics, quotations, and prices. The best software solutions allow users to attach and view on demand videos, images, and extensive documents.
- Updates: To be truly useful, an ERP system developed for ETO manufacturers should provide access to the latest financial and technical data so that informed, timely decisions can be made. Additional features should include capacity planning functionality, client/vendor management tools, and warning systems that can be set up for different project components, including inventory, budget, deadlines, etc.
- Operations: Although the most complex ERP systems may include functionality to support ETO manufacturing processes, the gold standard for this sector remains project-based solutions (PBS). Part of advanced ERP systems, PBS focuses exclusively on project management, offering 360-degree visibility into various production areas, ranging from inventory levels and individual item costs to complex manufacturing operations. For example, if you’re manufacturing a product repeatedly, you can use PBS not only to determine product costs, but also to calculate and track additional costs according to the customizations required by a particular client. Without PBS, it would be very difficult to perform complex operations, track costs, and estimate profits for each project.
- Reporting: Reporting along with revision control is critical to help maintain project items up to date. An ERP system fully optimized for ETO manufacturing must include sophisticated reporting features to help identify out-of-specification items in inventory. Based on complex reports, engineers can revise old items and implement specific corrective actions (returns, reorders, or adjustments) to bring them up to new specifications. An ETO software solution lacking adequate revision control and reporting capabilities is quite useless, as it may fail to help ETO manufacturers meet project specifications.
- Vendor: Finding an ERP vendor specializing in ETO manufacturing is as important as selecting the right software solution for your company. Since the company offering the software takes care of many aspects, including system implementation, maintenance, and staff training, it will have a direct impact on business efficiency, performance, and results. When selecting a vendor, ask him to present software functionality in a fashion that mirrors your operations. As with any other enterprise software solution, a good understanding of your business needs is paramount.
The points outlined above can help you understand how to go about selecting enterprise software that truly meets your needs. The right ETO software solution not only facilitates superior product management, but also establishes the best pathway to business success.