CPQ to ETO - All in One
Companies usually have different options when it comes to strategically choosing the right production method. It is important to recognize the ever-growing demand for individualized products which naturally leads to conflict especially with the increasing time pressure companies are facing. The good news is that this conflict can be solved with customX. Why is our software so efficient? It becomes evident when you take a look at the different production methods:
Different production methods at a glance
Build to Order / Make to Order
Build to Order describes typical contract manufacturing. Manufacturing only begins when an order has been placed and – other than with the Build to Stock approach – there is no supply of goods kept on hand for sale. Delivery times for this approach are much longer than it is the case for stocked goods.
Assemble to Order / Configure to Order
The Assemble to Order Approach (Configure to Order) enables companies to offer individual solutions that are based on customer requirements. The method here is putting together predefined elements and assemblies. The advantage: Satisfying customer needs with only one base product. The disadvantage: Predefined elements do not allow a wide variety of customer solutions. Also it is a very time-consuming approach.
Engineer to Order (ETO)
The Engineer to Order Approach takes it one step further. Engineering and manufacturing only start after the actual order intake. That means all products are highly individualized, but at the same time this approach is cost-intensive, time-consuming and delivery times are long. Cost calculation is often based on rough estimates and experience and exact calculations are only available after the engineering has been completed. ETO is often used in highly individualized sectors like the building industry, customized machine building or the engineering of large plants.
Sales Support – Achieve Individuality with CPQ
A good way to prepare contract manufacturing is using so-called CPQ software which enables a rule-based configuration process that includes automated pricing and quoting. Nevertheless this software only supports the preparation process and not the actual project planning phase. Also this approach is not very flexible and limits the variability of products as it only allows the assembling of predefined elements.
Ideal Solution: Automated ETO with Short Delivery Times
The configuration software customX as a CPQ system enables users to individually and flexibly design products based on rules. There are no limitations caused by predefined assemblies as it is the case with the Assemble to Order approach. The customer or sales employee simply designs the product as desired and customX automatically and on demand calculates the exact price and all quotation documents. And it does not stop there – customX also automatically generates technical documents like manufacturing drawings and models. Often the entire project planning phase can be automated with this ETO approach. The result: An effective Engineer to Order Process with short delivery times, low costs and documents that are 100 % error-free.