Actions

S3

Source-to-Engineering-Order

The collection of processes associated with ordering non-standard materials (raw materials, semi-finished products, finished products) and/or services based on specifications defined by or derived from customer order information. This may include supplier identification, qualification and selection, contract negotiation and new supplier onboarding.

The intention of Source-to-Engineering-Order is to order materials specified by explicit downstream demand (Customer Orders). These materials generally have not been qualified for the application specified or derived from the customer order. Engineering data may be exchanged with the supplying party, new material numbers may need to be created, and a specific reference or customer order detail is exchanged with the supplying party, attached to or marked on the product, recorded in the warehousing or ERP system in order to track individual deliveries.

Source-to-Engineering-Order is an ETO process.

Use Cases

  • Ordering custom components
  • Ordering materials for an industrial project
  • Ordering specialized services applicable to a single customer project

Source-to-Engineering-Order processes are generally the most resource intensive version of the S processes, typically requiring extended lead times.

Notes

(Expectation of) repeat Sales Orders may lead a company to convert these Sourced materials to a standard offering, thus changing the sourcing process from Engineer-to-Order to Make-To-order or Make-to-Stock. This generally is a conscious decision requiring the material to be included in (future) product revision processes. Perfect Order Ratio Orders Defect Free Ratio Order Cycle Time Sourcing Cycle Time Supply Chain Costs Cost Of Goods Sold Distribution Costs Cash Conversion Cycle Days Of Inventory Days Payables Outstanding Engineer-to-Order t:Purchasing Source-to-Pay

Hierarchy

IDNameLevelx
SSource1S
S3Source-to-Engineering-Order2S3
S301Identify Supply Sources3S301
S302Negotiate & Award3S302
S303Create Order3S303
S304Receive3S304
S305Unload3S305
S306Inspect3S306
S307Put Away3S307
S308Transfer3S308
S309Approve Payment3S309

Metric(s)

IDNameLevelx
DP1Perfect Order Ratio1DP1
DP12Orders Defect Free Ratio2DP12
RS1Order Cycle Time1RS1
RS14Sourcing Cycle Time2RS14
CO1Supply Chain Costs1CO1
CO11Cost of Goods Sold2CO11
CO12Distribution Costs2CO12
AE1Cash Conversion Cycle1AE1
AE12Days of Inventory2AE12
AE13Days Payables Outstanding2AE13

Term(s)

IDNameClearx
ETOEngineer-to-OrderETO
S2PSource-to-PayS2P
TLCTotal Landed CostTLC
Source-to-Engineering-Order Source 230000 2 {{{keywords}}} {{{description}}}