The Power of Combining Engineer-to-Order and Configure-to-Order

In the machinery industry, the ability to provide tailored products to customers is paramount for success. However, this customization often leads to challenges such as increased product variance, slow lead-to-order processes, limited design reuse, and expensive engineering efforts.

In many companies, quotations are created in a sequential process. Electrical engineering is often one of the last links in the chain. Instead of involving electrical engineering in design decisions at an early stage, developments are often “thrown over the fence.” Slow and error-prone processes are the result.

To remain competitive in this fast-paced business environment, an operating model that balances customization flexibility and process efficiency is essential. In this blog post, we will explore the benefits of combining Engineer-to-Order (ETO) and Configure-to-Order (CTO) approaches and explain how model-based product architectures can help streamline sales processes.

Integrating CTO and ETO Processes with Model-Based Product Architectures

Configurable products offer a promising solution for addressing customer-specific requirements without extensive engineering efforts. Experience shows that approximately 60% of customer inquiries can be handled through configurable products, while the remaining 40% require different levels of application engineering. To avoid losing a significant portion of orders, organizations must have the capability to accommodate both Configure-to-Order and Engineer-to-Order elements in one quotation and application engineering process.

Currently, Configure-to-Order and Engineer-to-Order processes often operate independently with little to no overlap. However, the key to achieving operational efficiency lies in combining the benefits of configurable products with the ability to tailor solutions to individual customers. The question then arises: How can this integration be achieved?

Model-based product architectures provide not only the foundation for configurable products but also offer the necessary flexibility to incorporate engineer-to-order elements. By utilizing such an approach, organizations can break down silos between application and product development, leading to a more streamlined lead-to-order process. Model-based architectures enable efficient customization while leveraging reusable components and standardized modules, resulting in reduced engineering efforts and faster time-to-market.

The Benefits of Combining ETO and CTO

• Reduced Product Variety:

  By combining ETO and CTO processes, organizations can achieve better control over product variance. Standardized modules and reusable components allow for efficient customization, ensuring that customer-specific requirements are met without compromising operational efficiency.

• Accelerated Lead-to-Order Process:

  The integration of ETO and CTO processes eliminates redundant steps, enabling a more streamlined and efficient lead-to-order process. Sales teams can respond faster to customer inquiries, reducing delays and increasing customer satisfaction.

• Improved Cost Efficiency:

  By leveraging model-based product architectures and standardized components, organizations can optimize resource allocation and reduce engineering efforts. This leads to cost savings and improved profitability.

Achieving Competitive Advantage Through Integrated Processes

To thrive in the machinery industry, organizations must strike a balance between customization and operational efficiency. Combining Engineer-to-Order and Configure-to-Order processes offers a powerful solution to control product variance while staying relevant to customer needs. By adopting model-based product architectures, organizations can streamline sales processes, reduce engineering efforts, and accelerate the lead-to-order cycle. Embracing this integrated approach can provide a competitive edge in today’s dynamic market.

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