Engineer-to-Order & Configure-to-Order: The Software Manufacturers Need to Succeed

Project management can be challenging for manufacturers who offer engineer-to-order (ETO) and configure-to-order (CTO) services. Working with customers to design and bring complex products to life requires extraordinary accounting, budgeting, planning, and project visibility. Without the right systems in place, time, resources, and credibility are lost.

With millions of dollars on the line, ETO and CTO manufacturers need a better software solution.

Project Management for ETO vs. CTO Manufacturers

ETO and CTO manufacturers are similar. Both offer customizable, made-to-order manufacturing solutions. Many of their customers are other manufacturers who want to invest in unique, long-lasting equipment and devices. They may work on a project for several months or years and must provide their customers with detailed project updates, including an expected timeline, budget and post-production maintenance services and warranty.

Both need a powerful ERP solution, like Microsoft Dynamics 365 Business Central, to optimize planning, budgeting, tracking, and end-to-end project management. Where ETO and CTO manufacturers differ, though, is in the complexity and breadth of their projects.

CTO Manufacturers

CTO manufacturers offer a predetermined set of configurations for customers to choose from when designing a product. It is similar to when a car manufacturer provides customization options in an online configurator, letting you choose from model, paint, interior design, and four-wheel drive. If a customer wants to buy a model that is not pre-configured to have the option for four-wheel drive, the rule-based engine informs the customer and disallows the combination.

This means that whatever software solution a CTO manufacturer uses must act intelligently based on pre-configured data sets. If the program allows the customer to choose four-wheel drive when it’s not really available, the manufacturer won’t be able to make the vehicle.

ETO Manufacturers

On the other hand, ETO manufacturers create fully customized, one-off projects for their customers. Many aspects of a final ETO product are custom-built, with engineers collaborating with the customer to ensure the design meets their long-term needs. In addition, ETO manufacturers may customize parts in-house with unique SKUs that may never be used for another project, meaning their software solution must keep track of various special parts and product details.

Whereas a CTO manufacturer offers a set of customization options, an ETO manufacturer allows customers to, essentially, build their own hotrod from the ground up.

Such a high level of complexity means that ETO manufacturers need a software solution that provides end-to-end project tracking, including project management that spans from design and assembly to shipping and maintenance. Their technology should also provide updates in real-time so that teams can plan ahead for scope changes.

ETO vs. CTO Software Considerations

Managing projects with spreadsheets and emails isn’t sufficient for large-scale projects. Outdated management tools like Excel are prone to error and don’t offer the visibility you need to oversee planning, budgeting and assembly.

CTO Project Management Software

If you are a CTO manufacturer, an intelligent software solution that makes smart recommendations based on pre-configured customization options is critical.

For example, suppose item A (leather seats) and item B (cloth seats) represent two variations of a single customization option. In that case, the program should understand that customers cannot choose both options – they can only pick one (leather or cloth seats). The program should also understand that it cannot show sub-options from item A if a customer decides on item B – it must stick to the correct path; otherwise, the final product will not be viable. For instance, if a customer wants cloth seats, the program should not let them choose a color only available in leather.

Unfortunately, not every ERP is intelligent enough to handle thousands of separate configurations (that branch out into even more complex options the more specialized they become). For a truly effective solution, you need a customized, third-party solution to integrate with your ERP.

Sikich’s team of experts can help you find a solid third-party configurator to integrate with Microsoft Dynamics 365 Business Central. With the two systems, you’ll gain a well-rounded suite of tools to confidently oversee project goals and create the perfect product for your customers.

ETO Project Management Software

Unlike CTO software, an ETO solution will not need to remember a vast number of item pairings and customization options. However, it will need to be robust enough to track hundreds (or thousands) of sub-projects and data points across the project’s lifecycle. For this, you need a powerful ERP solution (Business Central) and a unique plug-in built for ETO that provides the additional features necessary for ETO project management.

Your ERP and applications should offer everything you need for success, including:

  • Visibility into the project’s progress: This should include design changes, assembly updates, supply chain issues, task times, allocation of labor and timelines.
  • Cost control tools: These features help your team forecast project costs and identify scope changes before they become a problem. This includes insight into profitability, invoicing, and vendor products and services.
  • Task planning: Planning tools will help you allocate labor effectively and stay on track – enabling you to optimize operations and avoid unforeseen setbacks and delays.
  • CAD integration: Your ERP should connect seamlessly to your CAD so your engineers can update the project’s design, material list and operations steps in real time.
  • Automation: By automating budgeting, quote (CPQ) workflows, proposals, routings, BOMs and part number generation, your teams will have more time to focus on strategic tasks.

Everything must come together smoothly when building a unique solution from the ground up. Many manufacturing companies provide elements of both CTO and ETO. The right technology, backed by Business Central, will make it easier to manage projects, ensure they don’t go over budget and provide the visibility you need into every step of the build.

Sikich’s HEADSTART for ETOs is built on Dynamics 365 Business Central. We developed this solution to help manufacturers address these complex business needs, including selling, designing, manufacturing, shipping, and servicing. As a unified platform, it connects ETO processes and activities in a single, user-friendly solution.

To learn more about Sikich’s HEADSTART solution, Business Central, or how to integrate third-party CTO applications into your tech stack, contact our team of experts and schedule a consultation.

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. In addition, this publication may contain certain content generated by an artificial intelligence (AI) language model. 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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