Reply from pratzy on Jan 16 at 7:22 PM Karin, here is another of my articles. This one describes some of the features that Engineer to order (ETO) manufacturers might look for in an ERP system. I hope you find it useful.
Andy Pratico p: 778-278-6272
The typical ETO organization reflects a unique style of manufacturing:
• New business based on engineered quotations.
• Products designed specifically to the customer's engineered specifications.
• Customer involvement throughout the manufacturing process; from original quote to final assembly and on-site installation.
• Complex products that often require many custom subassemblies.
• Raw materials purchased with long lead times, often times specifically for that one job/Project
The recent shift within the North American manufacturing market has ETO organizations leading a call for change as a means of business survival.
ETO Manufacturing Challenges
Unlike more common manufacturing processes, within ETO manufacturing environments the customer is heavily involved throughout the design and manufacturing process. This constant involvement results in frequent engineering changes.
Another constraint in the ETO manufacturing process are the historically long lead times from purchasing vendors spanning months—even years. These raw materials are usually purchased directly for a specific phase of the overall manufacturing cycle.
Because ETO manufacturers treat each job as a project, all costs and materials are reported to the actual work order and variances are further compared to the original estimate. In many cases, once the production phase is complete, the product is shipped to and assembled at the client's site.
Furthermore, aftermarket services and replacement part sales continue throughout the life of the product.
Requirements Differ between ETO Manufacturers and Discrete Manufacturers
Unlike its repetitive/discrete production counterparts, the ETO manufacturer is faced with maintaining a business model that requires skilled, and knowledgeable Engineers, who are able to design innovative solutions to complex problems.
Another area where ETO manufacturing distinguishes itself is while discrete manufacturers have placed greater emphasis on
manufacturing products offshore, ETO manufacturers have continued to focus their design, engineering, and production of products domestically.
In determining the ERP requirements, it is necessary to take a deeper look at the challenges that ETO manufacturers face in their day-to-day operations:
• Synonymous with Project-Based manufacturing, actual costs are recorded against the specific project task/operations and variance trends are analyzed (compared to the original project quotation).
• Customers are involved with the project from "cradle to grave", resulting in frequent engineering changes.
• Most materials are purchased direct to the project task and often require long purchasing lead times.
• Often the final step of a project will be the actual equipment installation at the customer's site.
• ETO manufacturers rely on skilled and costly engineers, who are charged with project designs that meet the Customers' complex and demanding expectations.
• ETO manufacturers want to know the true labor and raw material costs through the entire multi-level Job
• ETO manufacturers want to schedule all associated sub-assemblies as part of one Job/Project, and drive to Promise Dates given to customers (pull-based)
These are the reasons why ETO manufacturers have difficulties finding capable software solutions.
ETO Manufacturers' have been pleading for improvements, but only a select few ERP developers have returned with a complete solution.
Today's ETO manufacturer should expect their ERP to include:
• Strict Engineering Change Management, including workflow. This should also include revision controlled transaction security, so that obsolete items resulting from engineering changes will not be purchased, transacted, or consumed.
• Functionality such as % complete, revenue recognition, work breakdown structures (WBS) and scheduled due dates/milestones displayed in a Microsoft Project format.
• Linking Engineering with the ERP. Integration at a BOM level with popular CAD and PLM systems. (single data entry minimizing human error)
• Project inventory management. Assigning a segregated "project warehouse" where inventory transactions will be isolated within the project.
• Project and work order feedback that details the actual project costs, including labor and raw material
through all levels of the Job/Project
• True Time & Attendance with integration to popular Payroll systems.
• A visual representation of the entire multi-level Job/Project schedule on one screen
• The ability to identify critical path constraints of a multi-level Job/Project
• Tighter controls regarding long lead time materials, providing for accurate material planning early in the project, and the subsequent alignment of materials to later phases as required.
• Preventative maintenance (internal equipment) and warranty contracts (external aftermarket).
• A Pull-based scheduling system, which drives for on time delivery performance while minimizing Work in Process
| | | ---------------Original Message---------------
From: Karin2
Sent: Thursday, January 12, 2012 12:42 PM
Subject: ERP Comparison for MTO Manufacturing.
I am looking for a good side by side ERP comparison for MTO Manufacturing showing the pros and cons of each system. Does such a creature exist? |
| Reply to this email to post your response. __.____._ |  _.____.__ |
No comments:
Post a Comment