When Construction Companies Adopt Engineer-to-Order Processes

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Engineer-to-order (ETO) companies, also referred to as contract or job shop manufacturers, run highly complex, customer-specific production processes. They build on their deep expertise to win customers, consult with them, and design the industrial and machine products they need. At the end of a manufacturing project, an ETO product usually needs to be shipped and installed..

Some construction firms are adopting an ETO approach to reduce their business’s risk, cost, and complexity. They produce building elements offsite, transport them to construction sites, and place them into a project in progress. With this process, it becomes easier to scale workforces and resources for the requirements of large projects and accomplish the work efficiently. It can pay off to build and deliver complex yet repeatable building elements in this manner.

Construction firms we work with design and pre-build segments of residences, bathroom modules, walls, roof sections, floor sectors, and other project elements. The flexibility, as well as the resource and cost efficiencies of  modular and prefab construction, make good business sense to more and more construction companies.

THE SOFTWARE CHALLENGES FOR PREFAB CONSTRUCTION

As construction firms adapt part of their operations to run more like an ETO business, the ERP and back-office systems designed for a typical construction company may no longer suit their needs. At the same time, they may find it challenging to find an ERP solution that meets their new ETO requirements. Most standard, all-in-one ERP systems typically fit just a portion of ETO companies’ requirements for business and operations management.

When they need to modernize and upgrade their technology, some ETO companies, prefer to adopt multiple systems for sales, manufacturing, services, financials, and back-office functions instead of attempting to consolidate processes on one technology platform. However, that approach has its own challenges. It can reduce the usability of technology, lead to redundant, error-prone data entry, reduce visibility, slow processes, incur high operational costs, and deliver a poor customer experience.

ERP SOLUTIONS AND EXPERTISE TO MEET PREFAB/OFFSITE CONSTRUCTION REQUIREMENTS

Sikich has for many years consulted with ETO and discrete manufacturing companies as well as construction firms to help them achieve their goals and become more productive businesses. In many of these engagements, we deploy enterprise resource planning (ERP) systems and other technologies for these companies.

We have developed a solution and a methodology called Sikich HeadSTART. It augments Microsoft Dynamics 365 Business Central as the cloud-based, back-end ERP system with standardized processes for specific industries. These are preconfigured, tested, and updated based on best practices and insights gathered in many successful implementation projects and as defined by leading industry experts and analysts. HeadSTART follows a deployment methodology that’s designed to deliver tangible business results in a short time.

Sikich HeadSTART for Construction enables such typical industry activities as project management, job material planning, job costing and accounting, subcontractor management, progress billing, contract and change orders, and others. The solution gives construction managers real-time visibility of their operations, performance, and financials, assisted by business analytics to gain insight and answer important questions.

Similarly, Sikich HeadSTART for ETO comes with an arsenal of processes that facilitate the distinct project management, bills of materials (BOM), costing, inventory management, material requirements planning (MRP), and other workflows in ETO businesses. On the Microsoft cloud, both of these industry versions of HeadSTART are highly scalable and secure, and integrate easily with advanced reporting or specialized software tools designed for Business Central.

If your business is on a journey from construction to something more like construction plus ETO, you might think it’s a bad idea to decide on a specific technology platform until you have reached your destination. However, getting there could be much easier with an ERP solution that gives you the flexibility to grow and evolve while supporting your changing requirements. Sikich construction and ETO consultants can work with you to chart your technology path and design a system that makes sense for your business. We are proud of our long-standing client relationships in both industries. We also have the change management and technology expertise to reduce the risk and improve the success rate of shifting business models.

Want to dive a little deeper into the software challenges for offsite construction projects? Please check out our free ebook,  Building a Best-Fit Technology Platform for Offsite Construction.

This publication contains general information only and Sikich is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or any other professional advice or services. This publication is not a substitute for such professional advice or services, nor should you use it as a basis for any decision, action or omission that may affect you or your business. Before making any decision, taking any action or omitting an action that may affect you or your business, you should consult a qualified professional advisor. You acknowledge that Sikich shall not be responsible for any loss sustained by you or any person who relies on this publication.

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