The August issue of Tooling & Production highlights, Leaning ETO Project Management. The term engineer-to-order (ETO) denotes a style of manufacturing rather than a specific industry segment. Other synonymous terms are project-based or custom manufacturers. ETO companies typically have distinct characteristics about the way they conduct business that differentiate them from discrete or repetitive manufacturers.

According to Thomas R. Cutler, spokesperson for the ETO Institute, ETO companies build unique products designed to customer specifications. Each product requires a unique set of item numbers, bills of material, and routings. Estimates and quotations are required to win business. Products are complex with long lead times, typically months or even years. Unlike standard products, the customer is heavily involved throughout the entire design and manufacturing process. Engineering changes are a way of life. Material is purchased not for inventory but for a specific project. All actual costs are allocated to a project and tracked against the original estimate. Once complete, the product is typically installed at the customers site. In most cases, aftermarket services continue throughout the life of the product.

The ETO Institute (www.etoinstitute.org) is an independent organization committed to helping North American engineer-to-order (ETO) manufacturers compete more effectively in an increasingly competitive global environment. Our resources section provides a list of articles and white papers focused on manufacturing and, in particular, engineer-to-order. The bulletin board provides a forum for organizations to share ideas and information and to discuss challenges and business issues.

Thomas R. Cutler
www.etoinstitute.org
954-486-7562

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