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ETO Institute


ETO Institute

ETO Institute

Ft. lauderdale, , United States

Engineering Products - Manufacturer, Services,
Proprietorship Firm Since 0

The ETO institute is a nonprofit 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.

Why The ETO Institute?
While there are many trade organizations focused on specific industries, ETO manufacturers are defined by the characteristics of their business processes rather than by a single industry group. Our goal is to help companies with similar business issues, regardless of their industry.

Challenges Facing ETO Companies :
The recession has hurt every sector of the North America economy, manufacturing especially hard, with the loss of over 2.5 million jobs in the U.S. Alone. The machine tool industry for example, is down 50% from its peak. ETO companies are affected differently than repetitive manufacturers, as they rely on a small number of high value contracts from a small number of customers.In the repetitive world, the loss of one order may not have a huge impact on the company, or the order quantity may be reduced. But in the ETO world, the loss of a large contract can be devastating. After all you cannot reduce an order size of one!

A Recovery Under Way?
Emerging from recession life will be different. Many domestic ETO companies are weaker and many have closed their doors forever. There is a danger in believing that when the economy improves, everything will be back to normal. We have seen business relationships between customer and supplier built up over many years disappear when a lower cost supplier enters the market. We are now competing in a global economy, and customers are used to purchasing at the lowest price. Companies must operate at optimum efficiency to thrive in today?s global economy

Our Goal :-
Our goal is to help provide information to ETO companies to help them make more informed decisions. Our view is that North American manufacturers can be competitive in the global economy but must adopt new technology and business processes.

Unfortunately many companies that decide to invest in new technology make the wrong choice. This is primarily because they could not find the right information to make an informed decision. Many of the vendors that provide solutions to ETO companies are niche players in their respective markets and are not as well known as their larger rivals. The Internet has helped, but it can still be difficult to find the right information. Our goal is to become a resource to help ETO companies find the right solution to their problems.

Products :

We Provide services of a list of articles and white papers focused on manufacturing and, in particular, engineer-to-order. ETO :- 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. 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 customer?s site. In most cases, aftermarket services continue throughout the life of the product. Estimating :- As each job is unique, an estimate is necessary to produce a customer quote. In many cases estimates are constructed from previous jobs that had similar characteristics. In some industries where there is a high volume of Requests for Quote (RFQ), companies use a summary where they estimate using groupings or ?buckets? of labor hours and material dollars. Here they estimate at a high level before constructing a more detailed estimate. Some companies have built sophisticated Microsoft Excel templates to assist in the estimating process, and Excel is the tool of choice for most companies. Build to a Project or Contract? :- Here, terminology may be different from company to company. The terms project, job, and contract are sometimes used interchangeably. In some companies the term ?contract? refers to the legal document spelling out the terms and conditions of the agreement. The term ?Project? refers to schedule of work and the ?Jobs? is the individual segments of work that comprise the project. Whichever term is preferred, an ETO company uses the project/contract/job as a scheduling mechanism and as a cost collection mechanism. Purchasing :- In some cases material is purchased only once for a specific project. The subcontractor or supplier may be involved with the original design and specification of material. In many cases the design engineer will specify the part to be purchased. For any material purchased, the actual cost is allocated to the project. Engineering Change :- In an ETO environment, engineering changes are a way of life. As the customer is heavily involved throughout the whole engineering and manufacturing process, changes to the design are inevitable. Critical to the profitability of a project is to record and monitor the changes to determine who bears the responsibility for any additional cost. Project Management :- ETO and project-based manufacturers appoint a manager for each project. Project managers are ultimately responsible for ensuring that the project is delivered on time and within budget. Microsoft Project is the tool of choice for many companies, not only for managing the project but also for communicating status with their customers. Actual Costing :- ETO companies use project accounting and collect actual costs rather than the standard costing method used by most repetitive manufacturing companies. All actual costs are allocated to a project and monitored against the original estimate. Monitoring actual costs against the original estimate ensures that profit margins are maintained. It is essential to know the Estimated Cost to Complete ? what?s still needed to deliver the project. Installation :- Many projects require installation at the customer?s site. Once the assembly is complete, the equipment is broken down into major assemblies and shipped to the customer?s location. Here the equipment is reassembled and typically goes through a certification process before acceptance by the customer. Progress or Progressive Billing :- Progress or progressive billing is sometimes called milestone reporting. Due to the long lead times in the ETO world it is common business practice to receive partial payments, typically based on a percentage of the total bill, when a significant milestone is reached. Revenue Recognition :- For projects with long lead times, companies may need the ability to recognize revenue based on the percentage of actual expenses incurred, rather than against final shipment of the product. Aftermarket Services :- After installation and acceptance, the equipment is usually covered by a warranty. ETO companies, particularly machine tool and industrial equipment suppliers, provide aftermarket services including maintenance, repair, and spare parts. For a more detailed description of the business processes of an engineer-to-order company, please download the white paper : Project-Oriented Manufacturing: ?How to Resolve the Critical Business Issues That Impact Organizational Competitiveness? by Preston Blevins CFPIM, CIRM. Industries :- Engineer-to-order is a style of manufacturing rather that one specific industry grouping. Some examples of industries where you will find ETO companies are :- ? Dies, Tools & Molds ? Machine Tools ? Industrial Cranes and Hoists ? Farm Machinery & Equipment ? Metalworking Machinery ? Construction Machinery ? Foundry Equipment ? Mining Machinery ? Industrial Automation Equipment ? Oil & Gas Equipment ? Medical Equipment ? Industrial Tractors and Trailers ? Custom Boat Builders ? Power Generation Equipment ? Conveyors & Material Handling Equipment ? Food Industries Machinery ? Paper Industries Machinery ? Transportation Equipment ? Communications Equipment ? Fabricated Metals ? Custom Sign Makers

Contact Info

ETO Institute

3032 S. Oakland Forest Dr.
Suite 2803
Ft. Lauderdale - FL 33309 () United States

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