What is Engineer to Order
Engineer to Order (ETO) is a production technique in which each product is created and engineered after receiving a client order. Unlike traditional production processes, where items already exist, ETO work begins when a customer specifies their particular requirements. It is followed by a rigorous requirements discussion. Sales teams acquire technical specs from customers. Engineering teams then analyze the criteria to ensure their viability. Each order may require specific measurements, unique materials, new components, or particular compliance considerations.
ETO is useful in industries that generally produce highly complicated and configurable products, such as industrial equipment, aircraft equipment, specialized vehicles, heavy construction systems, and HVAC and power generation. Clients of these industries usually demand equipment that meets their process, space, performance, or regulatory requirements.
How ETO Differs from Other Manufacturing Models
ETO stands apart from other production methods because the product is not predefined.
- Make to Stock (MTS) involves producing products for inventory.
- Assemble to Order (ATO) or Configure to Order (CTO) involves assembling products using predefined modules.
- Make to Order (MTO) involves starting production after an order but relies on standard designs.
ETO, on the other hand, involves design engineering for every order. This makes the process more flexible but also more complex.
Stages of an ETO Process
Here are the key stages of the ETO process:
1. Requirement Gathering
The customer specifies what the product must achieve. This could include performance requirements, measurements, environmental factors, and regulatory guidelines.
2. Engineering Review
Engineering teams examine the requirements and confirm what is technically possible. They highlight potential risks, design constraints, or material limitations.
3. Custom Design and Modeling
Product designs, drawings, simulations, and structural models are created. Engineers select components, materials, and manufacturing methods that meet the project requirements.
4. Cost Estimation
Since every product is unique, pricing cannot rely on standard lists. Costs are calculated using material needs, engineering hours, supplier inputs, labor, and special tooling.
5. Procurement and Planning
Unique materials or custom-built parts are procured by the production or inventory department. Production planners develop timetables, job instructions, and resource plans based on authorized design.
6. Production and Assembly
Teams manufacture, assemble, and test the product according to the engineered specifications.
7. Customer Reviews and Adjustments
Some ETO projects include milestone reviews where customers validate design decisions, layout drawings, or performance checks.
Benefits of ETO
ETO offers advantages to manufacturers and customers who require tailored solutions:
- High customization to meet exact customer needs
- Strong customer involvement throughout the process
- Greater product differentiation, since each solution is unique
- Reduced price pressure, as customers value technical expertise
- Better alignment with regulatory or industry-specific demands
Challenges in ETO
ETO also involves certain challenges:
- Longer lead times due to design and approval cycles
- High dependency on engineering resources
- Complex procurement because materials may not be standard
- Frequent design revisions, which require careful documentation
- Difficulty forecasting delivery dates when designs evolve
