White Paper: From Engineer-to-order (ETO) to Configure-to-order (CTO)

How to respond to growing complexity in discrete manufacturing.

From ETO to CTO

This White Paper analyses inherent complexity drivers of ETO, and reviews approaches aimed at containing variety by converting to a configure-to-order (CTO) methodology.

Introduction

Engineer-to-Order (ETO) is a proven way of driving sales and securing margins pursued by many companies in the investment goods machinery sector.

However, in an environment of global value chains and competitive pressure, a growing number of companies are experiencing cost and efficiency issues in their ETO business that are the result of an elevated degree of project and supply chain complexity.

Consequently, many of them are looking for approaches to evolve from a reactive engineer-to-order (ETO) approach, into a proactive configure-to-order (CTO) type of strategy.

Topics:

  • The challenge of ETO: controlling complexity
  • Identifying complexity drivers
  • Understanding complexity
  • From vision to mission
  • Establishing the right balance between variance and cost
  • How to carry out a variant value analysis
  • Defining the supporting IT infrastructure

ETO manufacturers are finding that every time the number of variants is doubled, the related costs increase by 20% to 30%...