Difference between revisions of "ETO"

Latest revision as of 02:04, 21 August 2020

Engineer-to-Order is the Supply Chain Configuration Strategy that enables customer-driven requirements to be recorded on the order and design/engineering to be finalized as part of the execution of the order (Order Engineering). Typically these customer-driven requirements are unknown at the time of product design or are variations that are not designed into the product or offering (at the time of product engineering).

Engineer-to-Order extends the capabilities of Make-to-Order to include Order Engineering activities. Configurable Make-to-Order products are generally menu-driven. This implies the configurable part of a Make-to-Order product has been defined as part of product engineering.

Engineer-to-Order is one of the four Supply Chain Configuration Strategies: Make-to-Stock, Make-to-Order, Engineer-to-Order and Reverse Logistics.

Use Cases

• Order Engineering
• Complex construction projects
• Configure-To-Order (exceptional cases)
• In home building: Completely custom home
• In a Retail store: Not a common use case
• In services industries: (Co-) develop a custom offering for a unique client

Notes

Engineer-to-Order does not mean a product is designed completely as part of the Order Engineering process; most use cases have limitations to the extend of customization (requiring engineering) of the product or service. OpenReference recognizes two types of Engineering:

• Product Engineering is a process driven by market requirements and is generally performed prior to marketing the product (and taking customer orders for such product)
• Order Engineering is a Supply Chain process driven by an individual customer order and is generally performed after the product has been engineered (as part of product engineering processes) and after the receipt of a customer order

Another differentiator from Make-to-Order: Engineer-to-Order orders are generally considered project orders.