THE ETO DIFFERENCE: Invoicing on delivery vs. Process Billing by Milestone
February 13, 2005 (Press Release) --
A repetitive manufacturer invoices on delivery; an engineer-to-order manufacturer does progress billing by milestone.
Manufacturing enterprises are far from uniform, of course, most obviously in size, resources, and end products. Behind those visible distinctions, however, are corresponding differences as well in their automation and collaboration technology needs, reflected in their respective partnerships, and in the enterprise solutions they choose to facilitate sought-after efficiencies. The interaction between suppliers and ETO (engineer-to-order) manufacturers, for example, is far more critical than that between suppliers and their repetitive manufacturer customers. In many instances, the materials requested by ETO enterprises are unique to particular jobs or applications at hand and are ordered infrequently. Lead times are typically compressed, with tight scheduling and no margin for error.
The nature of ETO manufacturing, therefore, presents its own series of challenges. A yacht builder, for example, constructs individual and exclusive custom vessels—no two luxury boats are exactly the same. Such distinctions make a tremendous difference in how midmarket ETO manufacturers handle their ERP (enterprise resource planning) and SCM (supply chain management) requirements:
According to TR Cutler, spokesperson for the ETO Institute, www.etoinstitute.org, "These types of distinctions are the precise purpose of this organization. The focus is not on manufacturing sectors, but rather the manufacturing process. There is an opportunity to consider the unique technologies and tools available for Engineer-to-Order manufactures."
Cutler estimated that there are just under 30,000 "pure" ETO manufacturers in North America yet noted, "Increasingly there are manufacturing companies that are generally repetitive in the manufacturing process yet now want to offer ETO solutions for their demanding customers."
Thomas R. Cutler
ETO Institute
954-486-7562
www.etoinstitute.org
info@etoinstitute.org
Manufacturing enterprises are far from uniform, of course, most obviously in size, resources, and end products. Behind those visible distinctions, however, are corresponding differences as well in their automation and collaboration technology needs, reflected in their respective partnerships, and in the enterprise solutions they choose to facilitate sought-after efficiencies. The interaction between suppliers and ETO (engineer-to-order) manufacturers, for example, is far more critical than that between suppliers and their repetitive manufacturer customers. In many instances, the materials requested by ETO enterprises are unique to particular jobs or applications at hand and are ordered infrequently. Lead times are typically compressed, with tight scheduling and no margin for error.
The nature of ETO manufacturing, therefore, presents its own series of challenges. A yacht builder, for example, constructs individual and exclusive custom vessels—no two luxury boats are exactly the same. Such distinctions make a tremendous difference in how midmarket ETO manufacturers handle their ERP (enterprise resource planning) and SCM (supply chain management) requirements:
According to TR Cutler, spokesperson for the ETO Institute, www.etoinstitute.org, "These types of distinctions are the precise purpose of this organization. The focus is not on manufacturing sectors, but rather the manufacturing process. There is an opportunity to consider the unique technologies and tools available for Engineer-to-Order manufactures."
Cutler estimated that there are just under 30,000 "pure" ETO manufacturers in North America yet noted, "Increasingly there are manufacturing companies that are generally repetitive in the manufacturing process yet now want to offer ETO solutions for their demanding customers."
Thomas R. Cutler
ETO Institute
954-486-7562
www.etoinstitute.org
info@etoinstitute.org
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