Running an engineering-to-order company with Dynamics 365 Business Central

I met again with Robert Jolliffe for the Business Central Manufacturing Show. He is our first guest, who is on the podcast for the second time. Robert is President & CEO of Sabre Limited in Canada. He has been an ERP consultant for 25 years and holds a Microsoft Engineer designation.

In this episode, Robert shares why Dynamics 365 Business Central is the right system for engineering-to-order (ETO) companies. Of course, he does this thoughtfully and points out what makes ETOs so special.

This question of what characterizes an ETO also marks the starting point of the conversation. According to Robert, ETO’s normally have more engineers than "typical" shop workers. This means that those companies are more engineering-heavy. These engineers are highly technical people, thus managing human resources is much more important than in production or manufacturing, where you would see a lot more scheduling of machines and equipment.

When we try to understand this in the context of Business Central, Robert explains that the ETO does not typically have any predefined routings nor bills-of-materials (BOMs). BOMs are made even after quotation when the order from the customer has been received already. This is because every final output is a highly customized product with a very low quantity. Oftentimes, the batch size is one.

As a consequence, material requirements planning (MRP), inventory control, and safety stocks, which are the backbone of "typical" manufacturing companies are not important for an ETO. Most of the time, materials are just purchased for a specific project. Hence, data is much simpler and more abstract compared to the data required in a non-ETO manufacturing company.