In todays world of more complex manufacturing, companies are looking for manufacturing methods that are unique and that will allow for level of differentiation from their closest competitors to allow them to enjoy sustained margins. The issues companies face range from difficulty in estimating, purchasing, building, testing, shipping, on-site tryout and debug and then final commissioning. These complex manufacturers can use technology to help sustain a manufacturing advantage over the long term. The modern technology offered by software providers and their implementation resources continually comes back to the following key areas listed below.
Invest in new technology. While many ETO companies do not think twice about spending $250,000 on new equipment to make their plant more efficient, they balk at spending the same amount on ERP (Enterprise Resource Planning) software that will have a much more dramatic bottom-line impact than a single machine tool. The areas of technology are not only focused on costing and accounting systems, and includes CAD, project management, PLM, and Configuration software. The companies who view spending money on infrastructure as a competitive advantage typically outperform companies who elect to not spend the capital on further developing their infrastructure.
Focus on niche markets. Trying to compete without differentiation with a "commodity" machine builder is futile. Creating a niche focus of expertise creates product and industry sector distinction. Typically, the larger, more complicated and robust equipment requires additional services and support and generate an alternative revenue stream. That revenue stream can become the predicatable factor in the operating budget as they require well trained technicians to service the complex equipment.
Lean thinking throughout the whole organization. Lean manufacturing drives costs and can free up all important cash, which is critical in a competitive world economy. Lean supports profitable growth by improving productivity and quality, reducing lead times, and freeing resources. For example, it frees office and plant space and increases capacity so companies can add product lines, in-source component production, and increase output of existing products. ETO manufacturers that implement lean initiatives take advantage of renewed economic growth by increasing sales while controlling costs.
New markets. Most engineer to order manufacturing organizations are small family-owned businesses that have traditionally relied exclusively or predominantly on the domestic market. Overseas markets represent huge growth potential for ETO manufacturers. Even domestically, ETO manufacturers are finding untapped sectors such as automotive transplant factories that require automation equipment. The smaller and more nimble companies are able to better adapt to the changes requested of their customers in a shorter amount of time, allowing them to take advantage of technology shifts long before their larger competitors have a feel for the change required.
Board of directors typically are concerned about the issues facing them while operating an ETO manufacturing business: too much regulation, the cost of health care, unfair competition from overseas. Waiting for the government to do something about these issues, these small, often privately owned companies will suffer the consequences of inaction by withdrawing themselves from the landscape. The ETO manufacturers that are going to survive are implementing some of the strategies described above. Truly lean and progressive engineer to order firms will always thrive, even during difficult economic times. - 15465
Invest in new technology. While many ETO companies do not think twice about spending $250,000 on new equipment to make their plant more efficient, they balk at spending the same amount on ERP (Enterprise Resource Planning) software that will have a much more dramatic bottom-line impact than a single machine tool. The areas of technology are not only focused on costing and accounting systems, and includes CAD, project management, PLM, and Configuration software. The companies who view spending money on infrastructure as a competitive advantage typically outperform companies who elect to not spend the capital on further developing their infrastructure.
Focus on niche markets. Trying to compete without differentiation with a "commodity" machine builder is futile. Creating a niche focus of expertise creates product and industry sector distinction. Typically, the larger, more complicated and robust equipment requires additional services and support and generate an alternative revenue stream. That revenue stream can become the predicatable factor in the operating budget as they require well trained technicians to service the complex equipment.
Lean thinking throughout the whole organization. Lean manufacturing drives costs and can free up all important cash, which is critical in a competitive world economy. Lean supports profitable growth by improving productivity and quality, reducing lead times, and freeing resources. For example, it frees office and plant space and increases capacity so companies can add product lines, in-source component production, and increase output of existing products. ETO manufacturers that implement lean initiatives take advantage of renewed economic growth by increasing sales while controlling costs.
New markets. Most engineer to order manufacturing organizations are small family-owned businesses that have traditionally relied exclusively or predominantly on the domestic market. Overseas markets represent huge growth potential for ETO manufacturers. Even domestically, ETO manufacturers are finding untapped sectors such as automotive transplant factories that require automation equipment. The smaller and more nimble companies are able to better adapt to the changes requested of their customers in a shorter amount of time, allowing them to take advantage of technology shifts long before their larger competitors have a feel for the change required.
Board of directors typically are concerned about the issues facing them while operating an ETO manufacturing business: too much regulation, the cost of health care, unfair competition from overseas. Waiting for the government to do something about these issues, these small, often privately owned companies will suffer the consequences of inaction by withdrawing themselves from the landscape. The ETO manufacturers that are going to survive are implementing some of the strategies described above. Truly lean and progressive engineer to order firms will always thrive, even during difficult economic times. - 15465
About the Author:
Chuck R Stewart writes about business productivity for various publications. He specializes in helping customers in the area of engineer to order manufacturing, especially engineer to order software .
