Wilmington, MA -- (SBWIRE) -- 01/17/2006 -- Engineer-to-Order Manufacturers face several key challenges that distinguish them from repetitive manufacturers including:
Complex engineering design changes
Lengthy pre-proposal design work
Considerable engineering collaboration
Inadequate cost capture
Poor tool sets for analyzing project profitability
Detailed Challenges of ETO Manufacturers:
The business process begins with the Request-for-Proposal. The preliminary work leading to the proposal generation is considerable and requires the interaction of many departments such as, internal engineering, estimating, sales, design, and production. Together they need to effectively collaborate to generate a substantial, yet cost effective proposal and quote. The project timeframe can be 6-8 months for proposal generation and production may extend beyond a year.
Many ETO manufacturers current MRP system consists of traditional standard cost, period-based accounting and did not provide for the administration of costly, complex, multi-year projects. Without improvement on the front end process and accurate collection of project costs, there is little hope for profitable growth.
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