engineeredtoorder

Engineered-to-order (ETO) is a manufacturing approach in which a product is designed and built to meet a specific customer’s requirements. In ETO, significant engineering design, analysis, and customization occur after the order is received, and the final product is typically unique or highly customized. ETO is common in industries with complex, capital-intensive equipment such as aerospace, defense, oil and gas, mining, power generation, and turnkey plant construction.

Key characteristics include a high degree of product customization, substantial engineering content, long lead times, and project-driven management. The bill of materials evolves through the project, typically starting with a design bill of materials (DBOM) and being refined as procurement and fabrication progress. The process often proceeds through distinct phases: detailed engineering, procurement, fabrication, assembly, testing, and commissioning, with changes controlled through formal change management.

ETO contrasts with make-to-order (MTO) and assemble-to-order (ATO). In MTO, a standard design is configured for a specific order; in ATO, components from standard catalogs are selected and assembled. ETO requires close customer collaboration, specialized engineering teams, robust project management, and integrated information systems (ERP/PLM) to manage scope, costs, schedules, and interfaces.

Risks include scope changes, budget overruns, schedule slippage, and supplier lead-times. Success depends on clear requirements, early collaboration, rigorous change control, effective risk management, and strong integration between engineering, procurement, and manufacturing.

Typical metrics include total lead time, engineering effort, project margin, and on-time completion. Example applications include custom process plants, turnkey industrial equipment, and large-scale infrastructure components.