5 Challenges ETO Manufacturers Should Consider in Selecting an ERP System
By: Johnny Nugent
Engineer-to-order (ETO) manufacturers face unique industry challenges that should be kept in mind as they choose their ERP system. Unlike repetitive manufacturers, ETO manufacturers typically face the following 5 challenges:
- Complex engineering design changes
- Lengthy pre-proposal design work
- Extensive engineering collaboration
- Inadequate cost capture
- Poor tool sets for analyzing project profitability
For nearly all ETO manufacturers, the business process begins with the request-for-proposal. The preliminary work leading up to the generation of the proposal is considerable and requires the collaboration of various departments (engineering, estimating, sales, design, and production) to generate a substantial, yet cost effective proposal and quote. The project time frame may be 6-8 months or longer for proposal generation and production may extend beyond a year. This means that your ERP system needs extensive collaboration capabilities allowing your team to share and request information with each other, track communications and design changes, and update quotes and estimates.
Cost capture and profit analysis are other major challenges. Many ETO manufacturers' current MRP systems consist of traditional standard cost, period-based accounting, and do not provide solutions for administering costly, complex, multi-year projects. Without improvement on the front end process and accurate collection of project costs, there is little hope for profitable growth. That's why ETO manufacturers also need to ensure that their ERP solution has extensive cost capturing functionality with reporting and business intelligence capabilities to review and analyze profitability as a project is underway. Click here to learn how Visibility ERP can help your manufacturing business overcome all of these challenges.