Engineer to order is a production approach characterized by:[1]
To speed up delivery time, the adoption of concurrent engineering, integrated product team, and lean product development methodologies are used. The critical path methodology is also essential. To speed up the delivery time, many companies use customization approach (In SAP terminology it is called Variant configuration) where in, the most part of the BOM components and routing operation elements could be created automatically based on the design inputs received during quote/sales order stage. This approach speedup the BOM and routing creation process, there by help ETO companies to respond quickly to customer requirement.[citation needed]
Engineer to order environments must employ a flexible and adaptive, demand-driven approach to the manufacturing process. It is usually the right solution when details on a customer order are not provided and engineering development must be added to product lead time.[2]
ETO is a technique that is leveraged to boost sales and improve margins for those companies with customers needing solutions that are tailored to fit their own unique environment. It begins with selling product concepts that don’t have fixed designs and are expected to result in a new, unique end product. This could be any product, from enterprise software applications to special aircraft to a pair of jeans. But the typical ETO environment usually deals with the design and build of unique custom engineered complex machinery and industrial equipment - one in which there is heavy involvement of the following engineering disciplines; mechanical, electrical, mechatronics, software, manufacturing and systems engineering. The ETO company works with its customers to develop new products that satisfy the customer’s requirements and specifications.