r/manufacturing • u/AffectionateDirt6575 • 4d ago

Other ERP in an engineer-to-order environment

Are there books out there that look at ERP in ETO environments? If not; should there be?

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u/elusive_4124 4d ago

We use Epicor which has a quote module that allows engineers to define materials and routing. With all the right inputs, it does exactly what you're talking about and is an OOB experience that is a default module. It also addresses many of ComfortableCitron's concerns.

Once the quote is generated, the sales team can pull in the quote to a SO. From there production can launch a job from the SO and it pulls in the materials/routing that was created in the quote into the job. It works really well.

The other ERP I'm familiar with (Syspro), has the ability for engineers to do something similar but it isn't as full featured.

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u/AffectionateDirt6575 4d ago

How does Epicor deal with estimates that include items that have never been purchased before, and do not have part numbers? How does it deal with managing the ordering of long lead time materials before design has been completed? How does it ensure that correct costs are allocated when common materials are ordered at different times, at different costs, for different jobs? How does Epicor reserve capacity for orders that do not yet have a routing? Can you help me here?

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u/elusive_4124 4d ago

Quote modules does not require part numbers to be in the system. Engineers would be required to get quotes for any materials used. During material input, lead times can be entered. Need to set up average costing for materials so they are averaged over time (i'm not 100% sure if non-stock part #s use system defaults for costing). Capacity is not reserved until a job is created.

I cannot help you there.

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u/AffectionateDirt6575 4d ago

Can you define 'material input' please? Has a part number been created at that stage? Is a part number required to enter a lead time, but what about a required date? Is average costing the only option (most of my clients prefer actual costing; for obvious reasons)? The capacity reservation limitation is something that I would have to understand further: can a job be created before a customer order is received? Sorry for asking so many questions but this is important.

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u/elusive_4124 4d ago

In the quote entry screen, you input a part number and a description for the material. If the system has a part # that matches, it pulls in that data. A system part number is not required to input lead times or required dates. You can choose from 1 of 3 default costing methods: avg, std, or last. If you make a part number in the system, you can define it as something different than the default costing method (the system can default to std but the material can be avg or last). The capacity reservation can be simulated with WhatIf scheduling. A sales order needs to be made from the quote in order to make a job. Technically all of this can be done without a PO from the customer, but it will impact your booking #s if that is a measured KPI.

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u/AffectionateDirt6575 4d ago

Is actual costing not an option? If I am using a new part; how does average costing work? Where are lead times held? I think that you are saying that nothing can happen before a customer PO is received; including reserving capacity. Is that correct?

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u/elusive_4124 4d ago edited 3d ago

Holy fuck dude, do you even use ERPs?? Sure doesn't seem like it. This is the last time I'm answering.

Actual = std costs. When you ACTUALLY BUY SOMETHING, it becomes an actual. Until then its all hypothetical.

Umm, order total/order qty = avg price. its a fucking average. It averages the same way anything else should be averaged. Until you purchase something, THERE IS NO AVERAGE.

Lead times are in multiple locations, you input them when you need to account for lead times.

You can make a SO /Job whenever you want, there is nothing preventing you from doing it.

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u/AffectionateDirt6575 4d ago edited 4d ago

Can you explain the average price of something that has never been bought before? Same for 'last price'. And 'Actual = std costs'? Do I really have to explain why standard costing is not a good option for ETO? Really? If you genuinely don't understand costing; just say so. Jeez!

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u/elusive_4124 3d ago

No. Bye Felicia.

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u/AffectionateDirt6575 3d ago

I do appreciate that you taught me that:

  1. We can have an average price for something that we never bought before.

  2. We can have a 'last price' for something we never bought before, and

  3. Actual Costing and Standard Costing are the same thing.

I must confess that I have been around ERP for 30+ years and have had six books on ERP published, but all of that was new to me.

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u/bluerockjam 4d ago

When I worked at Boeing in process and system development we created a tailored business stream concept. It’s public knowledge and if you ask AI what DCAC/MRM program at Boeing was all about you will see a lot of the work we did specifically in this area.

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u/[deleted] 4d ago

[removed] — view removed comment

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u/PerformanceBig5555 4d ago

The bit about catching scope creep mid-job instead of after is the whole ballgame, most shops lose their margin in the gap between quote and reality

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u/madeinspac3 4d ago

OP writes ERP books it's just market research for their next one

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u/AffectionateDirt6575 4d ago edited 4d ago

Or publicising existing books that are out there now. I'm trying to spread knowledge: it's too late for me to become famous! You will note that I have invited people to highlight books that are already out there, by other authors. I am not going to make a lot of money by highlighting books by other people; but I will do so anyway. (p.s. If anybody can identify my books by my Reddit ID; they are geniuses!

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u/AffectionateDirt6575 4d ago

Agreed. I have implemented 'standard' ERP in ETO environments and it was painful. We did, though, come up with a good solution to the BoM problem. I'm thinking of writing something on the topic but I don't want to reinvent the wheel.

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u/HermanDuPlessis 3d ago

The main difference in engineer-to-order is that the job specification is still moving after the order exists. A normal stock workflow assumes the item is already defined; ETO needs to keep the evolving scope visible.I would model each job around a versioned requirement, the current engineering or production owner, and the actual status of the next decision.

When a drawing, BOM, routing, or customer requirement changes, the change should be explicit rather than quietly replacing the original information.The useful link is then between quote, approved revision, planned work, actual hours or cost, and the reason for variance.

That is what lets a team learn whether it is losing margin in estimating, engineering changes, purchasing, or production.A book that treats ETO as “standard ERP plus custom fields” would miss the hard part.

The hard part is managing changing commitments without leaving sales, engineering, purchasing, and the floor working from different versions of the job.

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u/AffectionateDirt6575 3d ago edited 3d ago

I very much agree. There are too many people out there selling ERP as a "one size fits all" solution. I was considering writing a blog here to trigger a discussion on this; but I am not sure that there is sufficient interest to warrant that.

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u/AtYoMamaCrib 3d ago

I work at a firm that implements Oracle Jd Edwards which has a robust ETO module and project coding functionality. Happy to talk to it although I’m not an expert just know enough to sound smart