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Engineer to Order vs. Made to Order:

How to Capture Clients With CPQ Solutions

Manufacturers can take many paths to achieve a successfully completed order. One customer may prefer to customize their product from a list of available options while another might want full creative input from the beginning. This is where it’s important to differentiate between Made To Order (MTO) and Engineer To Order (ETO) — two of the most common methods for designing and building products, offering more personalization than mass production.

While MTO production methods have been around for a long time, ETO manufacturing solutions continue to grow more complex and powerful — requiring close collaboration between the manufacturing company and the client. But now, solutions like Configure, Price, Quote (CPQ) software can go a long way to simplify the complex manufacturing ETO production cycle.

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The Ultimate Guide to CPQ

Differences Between Made to Order (MTO) and Engineer to Order (ETO)

There are two main factors separating made to order and engineer to order:

Customization: Companies that use an MTO manufacturing process have a standardized product that customers can customize in specific ways. This might include size options, decorative components, or upgraded materials. Imagine an MTO fencing manufacturer. They offer picket fences in vinyl or wood and customers can choose different picket sizes, colors, and post caps. Meanwhile, an ETO fencing manufacturer might allow customers to choose everything from the precise shape of the pickets to the spacing between each post to the building materials.
Complexity: When a customer places an MTO manufacturing order, production can begin immediately using the company’s existing designs. With ETO manufacturing, practically every element of a product can be customized. While this may require more work designing and retooling your manufacturing process each time, the flexibility of ETO allows you to meet the specific needs of more customers.

What You Need to Transition to ETO

While engineering to order creates flexibility for manufacturers, the solution also comes with a few hurdles. To become a successful ETO manufacturer, you need a robust CPQ solution to help you tackle challenges like these:

Data management - A more customized and personalized product requires more data, plain and simple. With every new detail a customer adds, data is added as well. You need a management software system that can track all of the changes the product undergoes throughout this process.
Materials acquisition - Quality parts make quality products. CPQ software can help you manage your inventory and remove options that require out-of-stock materials from the available choices. Never again will you have to worry about a client requesting an ETO order with materials that won’t be available for months.
Machine configurations - When manufacturing ETO products, you need to configure your equipment, too. These types of engineering changes may result in additional costs, which need to be automatically factored into the overall price of the product.

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How Configure One Cloud Can Make ETO Easier

If you’re interested in switching to manufacturing ETO, you need software that can keep up. That’s where Configure One Cloud’s CPQ software comes to the rescue. It allows you to create products with hundreds of customization options using parameters set by your engineers.

Our CPQ software can even automate repetitive tasks so your teams can focus on innovating new products. Here’s a look at some of the ways Configure One Cloud software can help:

CAD drawings - Configure One Cloud integrates with CAD software to automate the creation of production models and drawings. In some cases, CAD drawings like this can take weeks. By automating this phase, you can significantly reduce lead times and eliminate human errors. Once your engineers have designed the base product for customers to customize, they can turn their attention to new projects, too.
ERP connection - Configure One Cloud integrates well with a variety of ERP (enterprise resource planning) platforms. This means you can instantly generate a bill of material for precisely what the customer orders using product data from your ERP system. Since both systems work together, you don’t need to keep track of progress across multiple platforms manually. When one system updates, the other will follow.
Competitive advantage - Configure One Cloud gives you an edge against the competition, especially if they aren’t using CPQ software of their own. If you can offer custom ETO products and your competitors can’t, you’re already a step ahead in the global manufacturing environment. Companies that only offer made-to-order products may find they’re becoming obsolete compared to those who are stepping up to innovate.

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