ERP
Manufacturing
Make-to-Order and Engineer-to-Order Manufacturing: How ERP Handles One-of-a-Kind Work
Why Custom Manufacturers Need a Different ERP Approach
Standard ERP setups often assume repeatable products and predictable demand. But make-to-order (MTO) and engineer-to-order (ETO) shops live in a different world: long lead times, unique designs, heavy engineering involvement and project-based margin risk. To work, your manufacturing ERP system must support deep order-level configuration, project costing and engineering integration.
From Quote to Order: Estimating and Configuration
MTO/ETO ERP workflows support:
- Detailed quoting with configurable BOMs and routings.
- Pulling templates from similar past jobs for faster estimates.
- Capturing engineering hours, materials and subcontracting in the quote.
When a quote converts, the ERP system creates a project, job or sales order with linked work orders and purchase requirements.
Project-Based Work Breakdown Structures
Engineer-to-order manufacturers often use project-oriented ERP capabilities:
- Work breakdown structures (WBS) defining phases and deliverables.
- Budgeting for materials, labor and overhead at task or phase level.
- Integrated project schedules aligned with production and procurement.
This structure is essential for tracking progress and costs on large, complex jobs.
Engineering Integration: CAD, PLM and Change Control
ETO businesses need tight alignment between engineering and production. ERP integration helps you:
- Import BOMs from CAD/PLM into ERP jobs.
- Manage revisions and engineering change orders tied to projects.
- Communicate design changes to purchasing and the shop floor.
This reduces rework and miscommunication on custom builds.
Job Costing and Margin Control
Because each project is unique, job costing in ETO ERP is critical. ERP tracks:
- Materials issued to the job.
- Engineering and shop labor hours.
- Subcontract services and freight.
Comparing actuals to estimates throughout the project helps you spot margin erosion early and adjust scope, design or purchasing decisions.
Final Thoughts
ERP for make-to-order and engineer-to-order manufacturing must support project-based workflows, deep integration with engineering and robust job costing. When configured correctly, it gives custom manufacturers the control they need to deliver one-of-a-kind products on time and on budget—without losing sight of profitability.
- Top Expert
Nathan Rowan
Program Research, Editor, Expert in ERP, Cloud, Financial Automation
