Martin met again with Robert Jolliffe for the Business Central Manufacturing Show. He is our first guest, who is on the podcast for the second time. If you missed the first episode with him (in which we searched for the secret sauce of Business Central), I suggest you check it out here.
Robert is President & CEO of Sabre Limited in Canada. He has been an ERP consultant for 25 years and holds a Microsoft Engineer designation. In this episode, Robert shares with Martin why Dynamics 365 Business Central is the right system for engineering-to-order (ETO) companies. Of course, he does this thoughtfully and points out what makes ETOs so special.
This question of what characterizes an ETO also marks the starting point of the conversation. According to Robert, ETO’s normally have more engineers than "typical" shop workers. This means that those companies are more engineering-heavy. These engineers are highly technical people, thus managing human resources is much more important than in production or manufacturing, where you would see a lot more scheduling of machines and equipment.
When Rob and Martin try to understand this in the context of Business Central, Robert explains that the ETO does not typically have any predefined routings nor bills-of-materials (BOMs). BOMs are made even after quotation when the order from the customer has been received already. This is because every final output is a highly customized product with a very low quantity. Oftentimes, the batch size is one.
As a consequence, material requirements planning (MRP), inventory control, and safety stocks, which are the backbone of "typical" manufacturing companies are not important for an ETO. Most of the time, materials are just purchased for a specific project. Hence, data is much simpler and more abstract compared to the data required in a non-ETO manufacturing company.
The focus of ETOs is on the designing and creating of a product once the order is accepted. These orders are usually unique. Below are some of the points of focus for a typical ETO:
In terms of managing projects, a lot of ETO customers come from using Microsoft Excel and migrate to Business Central. By using an all-in-one business management software such as Dynamics 365 Business Central, ETOs look for ways to standardize their assembly, purchasing, or planning.
Companies that have recurring project structures or projects with similar customer types can use job templates that contain standardized information. This standardized information then helps to manage the project and to prepare the quote for the customer. Examples are:
Here’s a sample process revealed by Robert to bring this information into action with Business Central:
We invite you to listen to our episode with Robert and learn more about ETO companies, what makes them different from manufacturing companies, their unique processes, the ERP implementation process, and some issues to anticipate.
You can tune in below 👇 or anywhere you get your podcasts.