The line between manufacturing and construction is becoming more and more blurred as traditional “construction” companies begin to fabricate parts of the finished product off-site or in a factory. A couple of concrete examples include a company that fabricates building walls in a factory and another that assembles entire bathrooms for hotels in a factory. After assembly is completed, the final products are shipped to their designated job site for installation. While prefabricating components of the job is a great way of improving profit margins, flexibility, and quality, managing these processes on the back end can be tricky if your ERP solution is set up for traditional construction projects instead of ETO.
Manufacturing the same widget, over and over, is a far cry from constructing a building or a bridge. However, engineer-to-order (ETO) manufacturers, which make high-value products to the desired specifications of their customers, appear very similar to their construction peers. In fact, as construction companies transition more of their jobs to the factory floor, their business models may more closely resemble that of an ETO manufacturer than that of a traditional contractor. While these changes may not affect how you talk about these projects internally, your ERP system may be getting lost in translation and might require the implementation of different modules or functionality to maximize efficiencies.
The infographic below identifies the fundamental differences between ETO and construction projects at a high-level from an ERP perspective.
If your existing business systems are struggling to handle your transition from traditional job management to some of the new manufacturing processes you are implementing, like shipping and inventory, it may be time to re-imagine how your system works for you.
Sikich has industry experts in both construction and engineer-to-order manufacturing that can help you navigate the best-fit solution for your organization. Contact us today to discover a solution that works for you.