How PLM ERP Software Integration Solves the Top 6 Challenges in ETO Manufacturing

From digital transformation to fast-moving supply chain changes, Engineer-to-Order (ETO) manufacturers are constantly navigating unforeseen obstacles. Although most of these challenges are beyond a manufacturing company’s direct control, there are many ways to improve internal operations and achieve greater agility, flexibility, and success.

Integrating Product Lifecycle Management (PLM) and cloud-based Enterprise Resource Planning (ERP) software is one way to overcome industry-wide obstacles and stay competitive in a crowded marketplace.

In this article, we’ll explore the benefits of integrating your PLM and ERP solutions into one seamless platform, such as Microsoft Dynamics 365 Finance & Operations. More specifically, you’ll learn how to overcome six of the most common ETO manufacturing challenges while learning how to improve your team’s productivity.

Note: Even though most customers, commentators, and consultants still call it Dynamics 365 Finance & Operations or D365FO, Microsoft now technically licenses it as Dynamics 365 Finance and Supply Chain Management.

How is Engineer-to-Order Manufacturing Unique?

When compared with make-to-stock or make-to-order, a deeper level of customization is involved in ETO engineering. In ETO, manufacturers are responsible for creating new products based on bespoke customer specifications, making it nearly impossible to mass produce or quantify needs ahead of time.

The ETO process is so customizable that manufacturers must be prepared for additional layers of complexity and spontaneous, one-off requests. Personalization emphasizes the importance of correctly managing intricate, detailed processes in a sustainable way.

How the ETO Process Impacts Customer Relationships

There’s an added layer to ETO transactions—in-depth customer conversations. Because ETO manufacturers produce final products that satisfy unique requirements, they also have to collaborate closely with customers throughout the development process.

Engineer-to-order is also different in that it provides:

• In-depth understanding of customer needs that are easily influenced by broader economic trends, safety or compliance regulations, and consumer demands
• Long-term partnership between producers and customers when a reliable, well-tested product is brought to market
• Greater ability to design one-of-a-kind products that have no prior blueprint or product model to follow

While this heightened involvement results in greater innovation, it also leads to more complex requests and last-minute changes. In order to build long-term relationships with customers and maximize lifetime value, manufacturers need foolproof internal systems that minimize friction and reduce churn.

What Are the Major Challenges of Engineer-To-Order (ETO) Manufacturers?

Finding effective solutions begins with understanding the core challenges faced by ETO manufacturers. Let’s examine the top six challenges and consider how PLM ERP integration can help resolve them.

1. Juggling stakeholder inputs creates a coordination conundrum

ETO projects–such as customized construction machinery or bespoke military equipment– involve a wide range of stakeholders. The corresponding group of partners might also include engineers, designers, suppliers, customers, and end users.

Coordinating with such diverse groups (all with specific needs and expectations) can be a logistical hassle. Managing group input is often complicated, resulting in delays or inefficiency.

How PLM-ERP integration solves this

Combining PLM and ERP systems centralizes diverse stakeholder information to one place. This results in clearer communication, and it also fosters stronger collaboration and more productive working sessions.

With real-time access to project data, stakeholders have relevant information to stay in alignment with project goals. Manufacturing partners can also reduce misunderstandings and keep projects in motion.

2. Complexity increases with continuous customer involvement

ETO manufacturers deal with highly complex products that require input from customers at every stage in the journey. Because each new product is unique (ranging from electrical equipment to custom medical devices and orthotics), design always meets specific needs at a given time. As real-time input leads to unpredictable changes, the complexity of each new ETO project might change mid-production.

While the end products often bring immense value, their complexity sometimes makes the overall production process more time-consuming.

How PLM-ERP integration solves this

Integrating PLM and ERP systems allows for seamless communication between design and production teams—from the start of a project until its completion.

A simplified integration also ensures that every customer requirement is documented and easily accessible. With more transparency, ETO manufacturers reduce moments of miscommunication and confusion, thus streamlining the development process.

In this way, complex customer interactions are managed more efficiently, improving the final product quality.

3. Data silos scatter product information

In many ETO manufacturing environments, product information is scattered across different systems and departments. For instance, information about a product’s part number, quantity, and customer details might be located across multiple systems, making it difficult to manage and track. These “data silos” produce blind spots that hinder the product’s completion.

Without a single source of truth, ETO manufacturers struggle with errors, delays, and costly rework. Unfortunately, customers often view these issues as “red flags” and may lose confidence in a producer’s quality or commitment.

How PLM-ERP integration solves this

With an integrated PLM and ERP, manufacturers quickly build a single, reliable source of truth for all product-related information.

One centralized system ensures that all departments can access up-to-date data about a specific project or request.

Instead of making mistakes and chasing down pertinent project details, teams reduce errors and improve efficiency and quality. Clear documentation ensures that all parties are in the loop, whether tracking product versions, revisions, or customer updates.

4. Manual processes drain time and resources

Manual processes are a significant bottleneck in ETO manufacturing, contributing to longer lead times from when a customer requests a product to when they receive it.

For instance, manual (and often outdated) processes used for quoting, invoicing, and scheduling can result in significant delays in getting a product to the customer. Not only can this be embarrassing for strategic customer interactions, but it also contributes to errors and delivery delays.

How PLM-ERP integration solves this

To reduce lead times, manufacturers must bank on more automation. PLM ERP integration automates many manual processes, like data entry and routine documentation. In turn, producers can free up valuable time and resources and focus on higher-level priorities.

For instance, STAEDEAN’s PLM Integration for Dynamic’s ERP includes (among other key features) automated transfer of product data to seamlessly give manufacturers, services planners, and designers access to relevant product data, improving overall production speed.

Automation can also accelerate the entire manufacturing process, ensuring that completed products always meet the highest quality standards before delivery.

5. Inadequate change management loses time and money

Change and evolution are both inevitable in ETO manufacturing, but ineffective change management is often to blame for the bulk of rework and project delays. When changes are not communicated effectively, inconsistencies and errors take place, setting back key milestones and creating frustration for all parties.

Unfortunately, poor management processes also lead to unexpected costs. For example, manufacturers might have to submit rush orders for materials, request expedited shipping, or pay overtime labor to meet strict product deadlines.

These problems also result in a waste of valuable resources, like materials and components, that might have been ordered based on past designs or specifications. To correct the issue, manufacturers hand over more investment while dipping into profit margins.

How PLM-ERP integration solves this

An integrated PLM ERP system provides robust change management capabilities to ensure that updates are well-documented, verbalized, and implemented across all departments.

With cohesive communication between systems, manufacturers enjoy a more streamlined approach that reduces the risk for errors and reproduction. Over time, investing in PLM-ERP integration also reduces operational change management costs.

6. In-depth customization creates tough testing environments

Many types of ETO products require extensive testing. Depending on which industry or specification the product is made for, the testing phase can be lengthy and resource-intensive, but the process is critical for guaranteeing that a product meets customer guidelines and regulatory or compliance standards.

Of course, elaborate testing also means that manufacturers need to adjust the overall project timeline and scope to accommodate extra iterations or changes.

How PLM-ERP integration solves this

With integrated PLM and ERP systems, manufacturers can better manage the testing process so that it’s less unpredictable and chaotic.

With one integrated system, ETOs can automate workflows and guide development timelines based on real data. By overseeing the process from start to finish, manufacturers identify and resolve issues faster, even when those problems aren’t known until the testing window.

With better resources for testing multiple product types, ETO manufacturers can promise faster delivery to ensure that a higher percentage of customizable products work upon delivery.

Do You Need to Integrate PLM and ERP as an Engineer-To-Order Manufacturer?

Keeping PLM and ERP systems integrated means more than simply staying organized throughout production; it’s how manufacturers outrun their global competitors.

PLM-ERP integration offers a more comprehensive view of the entire product lifecycle, from initial concept to final delivery. Additionally, producers often access better data-driven decision-making, higher levels of departmental efficiency, and healthier collaboration with customers who have very specific needs.

Launch an Effective PLM-ERP Integration Today

If you’re an ETO manufacturer facing any of these challenges, a well-integrated PLM and ERP can significantly improve your operations. By centralizing data, automating processes, and enhancing team connections, integrating your core business process management platform with product lifecycle management paves the way for better efficiencies, faster growth, and a healthier bottom line.

At Encore, we specialize in delivering user-friendly, intuitive technology solutions for ETO manufacturers that check all the boxes. By leveraging a tailored Microsoft Dynamics 365 cloud-based enterprise resource planning solution alongside a trusted, purpose-built PLM-ERP Integration Framework from STAEDEAN, you can transform your manufacturing business.

Get in touch with an Encore discrete manufacturing expert today for an overview of your available options.