Engineer To Order Challenges and Solution with Oracle SaaS

A regular product flow in Discrete Manufacturing involves receiving an order, manufacturing it based on a standard design that exists, shipping and invoicing it. However, an ETO (Engineer-To-Order) flow involves a lot more activities before the order could be shipped. These processes run through almost all the departments of the organizations starting with Quoting, Sales Engineering, Product Engineering, Supplier Collaboration, Manufacturing, Quality, Costing, Logistics and Finance. These activities lead to many handoffs between then departments and iterative interactions which make the ETO cycle time very high.

Some of the typical challenges associated with a typical ‘Engineer To Order’ are the following:

·    The overall lead time of manufacturing an ETO product is quite high as it involves a significant amount of engineering and design for each ETO order. Once the specifications regarding the product / Bills Of Material and requested special features are finalized, the Engineering team has to do research, experiments, and prototyping, etc to revert with the feedback on feasibility.

·    The Pricing, Costing and delivery promise date is dependent on components under engineering. For upfront pricing and Order confirmation without knowledge of the final product’s cost may cause a reduced margin if the cost goes higher than estimates.

·    Lack of visibility to the final product’s components and operational needs until research, and engineering is completed which in turn is required to confirm whether the customer expectation can be met.

·    Downstream process of procuring the new components in ETO environment typically require lot more time for the new components / parts with Suppliers during quotation process and require close communication and exchange of inquiries and feedback with Procurement Dept, Engineering, Suppliers, CSR and in turn with Customer.

·    Huge Technical and operational Information flow is involved.  Products need a lot of data gathering relevant to different aspect of BOM, Drawings, Engineering of the product, operational instructions (temperature and pressure at specific operation etc), outside processing, technical specifications (e.g., painting color, number of coats), tagging, packaging and so on, depending on specifications.

·   Demand forecast of new components are usually not available and may not be predictable for future purchases.

·    Higher Testing / Quality Control needs for a product being manufactured first time; the testing cycles may go for more iterations increasing total lead time of the finished good as well as the expense of carrying out this exercise.

·    The Change Orders need further To and Fro communication with the Customer and Internal departments with high volume of data exchange, new action items (e.g., re-engineering) etc leading to further lapse of time.

·    Real time tracking of the Order is difficult due to above mentioned reasons.

·    There is a lot of close collaboration required with Engineering Department for quoting and Sale of ETO based products. The Sales Quote or the Order needs to be verified and confirmed by assigned Engineers before order booking in terms of feasibility, possible variations, and other necessary inputs. This in turn increases the workload on Engineers unpredictably as against the predetermined set of work on the ongoing projects.

In order to address these typical aspects of the Engineer to Order business, Infosys has designed a Oracle SaaS based solution for our ETO customers. Some key features of the solution are the following:

·    A tightly integrated Configure, Price and Quote tool that allows customers the ability to configure and price products that are built to specifications. This is integrated with Order Management to seamlessly create the ETO orders with the required details.

·    Provision to capture ETO requirements for a component at any level of the product.

·    A mechanism to allow engineers to review the ETO quotes, and then accept, reject, or seek further clarification from the CSR and the customer regarding the requirements to confirm the feasibility.

·    The entire product configuration along with the technical information, operational instructions captured, flows to the concerned departments or external parties (Customer or suppliers). After the quote is finalized and accepted, the same quote is as-is converted to Sales Order. This way no information is missed in this entire process.

·    Automatic generation of the initial ETO product and its base BOM makes the process quick and provides early order entry and visibility to manufacturing and planning.

·    Online collaboration with External and Internal parties, real time Transactional data updates available among different systems (e.g. in Oracle Sourcing) which helps with speeding the quote process as well as timely decision making on procurement of Bill Of Material components, Outside processing services etc needed for manufacturing.

·    In line with the above-mentioned benefits, the manual errors in requirement gathering are reduced. The accuracy of information collected from customer improves, in turn helps in more accurate pricing, costing and estimation of delivery promise date to the customer.

·    PLM (Product Lifecycle Management) module is well designed to support product development for items or parts right from inception, design through efficient documentation, capturing requirements, Engineering Change Orders and quality workflows. This module is integrated across other Supply Chain Management modules in Oracle Cloud applications and seamlessly integrated with Computer Added design systems.

·    Document Repositories, Summary of information, Tracking and Tracing capabilities throughout end-to-end Order flow and Product Lifecycle management.

·    Different Dashboards (seeded and customizable) could be developed as per Business needs which help drill down information from macro to micro level.

·    Reporting capabilities of Oracle SaaS is useful to have information related to product specifications, Operational instructions to print or send to concerned departments or external parties.

·    Performance tracking of different entities e.g., Suppliers, products or parts quality issue capture etc are critical for improvements and critical decision making to streamline the processes.

·    Online concurrence and approvals can be taken on change orders.

The ETO process, as explained, involves activities that span across various departments and in the process could introduce errors and delays. The Infosys solution around ETOs attempts to provide an orchestrated solution that contains necessary automation, process framework, integration and tracking needed for managing the ETO business.

Author Details

Bhaskar Bhaskar Iyer P.

Bhaskar works as Senior Consultant with Infosys and has 18 years of experience in IT Consulting for EBS Oracle Supply Chain Management. He worked in various location in Japan, Brazil, Romania etc. He has expertise in various modules e.g. Order Management, Procurement and relevant modules.

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