World Trade Magazine Profiles Value of ETO Institute

World Trade Magazine’s article “Engineer-to-Order Manufacturers Find Little Global Competition” features information from the ETO Institute (www.etoinstitute.org).    The ETO Institute is an independent 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.

According to Thomas R. Cutler, author of the article is also spokesperson for the ETO Institute, “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.”

The manufacturing recession from 1999-2003 within the North America economy, resulting in the loss of over 2.5 million jobs in the United States alone. The machine tool industry for example, is down 50% from its peak. ETO companies were 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 had a significant impact on the company; in the ETO world, the loss of a large contract can be devastating. After all you cannot reduce an order size of one!

Those ETO companies that survived are now thriving because the products manufacturers simply cannot be outsourced and produced globally, when so much of the installation must occur on the plant floor. While this distinction provides a competitive advantage, The ETO Institute has become a resource to help ETO companies find the right solutions to maintain a lean methodology and appropriate technology.

ETO Institute

www.etoinstitute.org

Thomas Cutler

888-902-0300