Engineer-to-Order ERP | Best ERP for Engineering Companies 2025

Engineer-to-Order ERP: A Buyer's Guide

Engineer-to-order (ETO) companies design and build unique products for each customer. Whether you manufacture custom industrial equipment, specialized process machinery, one-off tooling, bespoke structural steel, or complex electromechanical systems, every order is essentially a project. There is no standard product to pull off a shelf. The BOM does not exist until engineering designs it. And profitability depends on how well you estimated the job before a single hour of engineering was spent.

This is fundamentally different from repetitive or even make-to-order manufacturing, and it requires ERP that is built around projects rather than forecasts. Generic manufacturing ERP -- designed for companies that make the same products over and over -- will fight you at every step. ETO companies need ERP that integrates engineering, estimating, project management, procurement, and production into a unified workflow where the project is the organizing principle of the entire business.

This guide is for operations leaders, engineering managers, project managers, and CFOs at ETO companies who are evaluating ERP. Whether you are a 50-person custom fabrication shop outgrowing spreadsheets, a mid-size industrial equipment manufacturer struggling to connect engineering to production, or a large project-based manufacturer looking to modernize, this page will help you understand what to look for and which vendors serve your segment.

Understanding the ETO Spectrum

Before evaluating vendors, it helps to understand where your business falls on the manufacturing spectrum. ERP requirements change significantly based on your position:

Engineer-to-Order (ETO)

Every order requires significant engineering design work. The product is custom-designed for each customer. The BOM and routing are created as part of the engineering process for each order. Examples: custom industrial machinery, specialized process equipment, one-off marine vessels, bespoke structural steel projects.

ERP implications: You need deep project management integrated with engineering and production. Estimating accuracy is critical. CAD/PDM integration is essential. Engineering change management during production is a daily reality, not an exception.

Modify-to-Order (MTO with Engineering)

You have a base product design that is modified for each customer. The core BOM exists, but each order requires engineering changes -- sometimes minor, sometimes substantial. Examples: configurable industrial equipment, customized packaging machinery, modified pump and valve assemblies.

ERP implications: You need strong configuration management and engineering change processes. The system must handle a base BOM with order-specific modifications while maintaining traceability between the standard design and customer variants.

Configure-to-Order (CTO)

Products are assembled from pre-engineered options and variants. Engineering involvement is limited to selecting and validating configurations rather than designing new components. Examples: switchgear, modular conveyors, configurable motor control centers.

ERP implications: You need a product configurator and rules engine rather than deep engineering integration. Standard manufacturing ERP with configuration management may be sufficient.

Make-to-Stock (MTS)

Standard products manufactured to inventory based on demand forecasts. Engineering is separated from production by a product development process. Examples: consumer goods, standard industrial components, catalog products.

ERP implications: Standard manufacturing ERP handles this well. Forecasting, MRP, and inventory management are the primary concerns.

Most ETO companies actually operate across multiple points on this spectrum. You might have some products that are fully engineered to order, others that are modified from base designs, and standard spare parts that you make to stock. Your ERP must accommodate this range without forcing every order into a single workflow.

Why Generic Manufacturing ERP Fails ETO Companies

ETO companies that implement generic manufacturing ERP consistently encounter the same set of problems. Understanding these failure modes will help you evaluate vendors more critically.

The BOM Problem

In repetitive manufacturing, the BOM exists before production begins. The ERP uses it for material planning, costing, and scheduling. In ETO, the BOM does not exist when the order is received. It is created through the engineering process and often changes during production.

Generic ERP assumes a stable BOM. When you try to use it for ETO, you face these problems:

• Material planning fails because MRP cannot run against a BOM that does not exist yet. You end up ordering long-lead materials before engineering is complete, based on estimates rather than engineered quantities.
• Costing is wrong because the BOM-based cost roll-up does not reflect the actual cost of engineering the product. Engineering hours, which are often a significant portion of the total cost, are tracked separately (or not at all).
• Production scheduling is disconnected from engineering because the ERP does not know when the BOM will be ready for release to manufacturing.

The Estimating Problem

ETO profitability lives and dies in estimating. If you quote too high, you lose the job. If you quote too low, you win the job and lose money on it. The estimating process in an ETO company is sophisticated: estimators combine historical data from similar projects, parametric calculations, vendor quotes for major components, and engineering judgment to develop a price.

Generic ERP treats estimating as a sales function -- a quote with line items and prices. It does not understand that an ETO estimate is really a preliminary project plan with material, labor, and overhead budgets organized by work breakdown structure. When the estimate does not flow into the project execution system, you lose the ability to compare estimated versus actual costs at a meaningful level of detail.

The Engineering-to-Production Handoff

In many ETO companies, the handoff from engineering to production is the single biggest operational bottleneck. Engineering creates designs in CAD and stores them in a PDM system. Production needs BOMs, routings, and work instructions in the ERP. Bridging this gap manually -- having someone re-enter engineering data into ERP -- creates errors, delays, and frustration.

The root cause is that generic ERP and engineering tools (CAD/PDM) do not speak the same language. The engineering BOM (organized by functional assemblies as the engineer thinks about the product) often differs from the manufacturing BOM (organized by production sequence as the shop floor needs it). Translating between them requires intelligence that most generic integrations do not provide.

The Engineering Change Problem

In repetitive manufacturing, engineering changes are controlled, infrequent events managed through a formal ECO/ECN process. In ETO, engineering changes during production are routine. A customer revises their requirements. An engineer discovers a design issue during detailing. A purchased component is unavailable and requires a design revision.

Generic ERP's engineering change management assumes changes are exceptions. In ETO, they are the norm. Your ERP must handle rapid engineering changes -- including impact analysis on already-released work orders, material already on order, and production already in progress -- without bringing operations to a halt.

Essential ERP Capabilities for Engineer-to-Order

Project-Based Architecture

The fundamental requirement for ETO ERP is that the project must be the central organizing unit of the system. Every transaction -- material purchase, labor hour, subcontract, expense, revenue event -- must be traceable to a specific project, and ideally to a specific phase, task, or work breakdown structure element within that project.

This means:

• Project-based BOM and costing: Each project has its own BOM, and costs accumulate against the project rather than against a product.
• Project scheduling integrated with production scheduling: Engineering tasks, procurement lead times, and production operations are all visible on a single project timeline.
• Project profitability analysis: Real-time visibility into estimated versus actual costs at the project level, with drill-down to individual cost elements.
• Revenue recognition by project: For long-duration ETO projects, revenue must be recognized based on percentage of completion or other project-based methods.

CAD/PDM Integration

The integration between your engineering design tools and your ERP is one of the most important technical requirements in ETO. This integration must handle:

• BOM transfer from CAD/PDM to ERP: When an engineer completes a design in SolidWorks, AutoCAD, Inventor, Creo, or another CAD system, the BOM (with all components, quantities, and specifications) should flow into ERP without manual re-entry.
• Drawing and document linking: Work orders and purchase orders in ERP should link directly to the current revision of the relevant engineering drawing.
• Revision synchronization: When a drawing is revised in CAD/PDM, the corresponding BOM in ERP must be updated (subject to engineering change approval).
• Engineering BOM to manufacturing BOM transformation: The integration should support the transformation from an engineering structure (how the product is designed) to a manufacturing structure (how the product is built).

Common CAD/PDM platforms in ETO include SolidWorks PDM, Autodesk Vault, PTC Windchill, and Siemens Teamcenter. The availability and quality of pre-built connectors between your CAD/PDM platform and your ERP should be a major factor in vendor selection.

Engineering Change Management

Your ERP must handle engineering changes as a core workflow, not an afterthought:

• ECO/ECN creation and approval workflow: Formal process for requesting, reviewing, and approving changes with documented rationale.
• Impact analysis: Before approving a change, the system should show what is affected -- open purchase orders for the changed component, work orders in progress, inventory on hand, and other projects using the same part.
• Effectivity management: Changes should be applied with clear effectivity -- this change applies to serial numbers after X, or to orders received after date Y.
• As-designed vs. as-built tracking: The system must maintain a record of what was designed (engineering intent) and what was actually built (including deviations and substitutions), so that you can reconstruct the exact configuration of any delivered unit.

Estimating and Quotation Management

ETO estimating is a specialized discipline that generic quoting tools do not address:

• Parametric estimating: The ability to estimate costs based on product parameters (weight, size, complexity, materials) using historical data from similar projects.
• Detailed estimating: Building up an estimate from individual material, labor, and overhead line items organized by work breakdown structure.
• Estimate-to-project conversion: When a quote is won, the estimate should convert directly into a project plan with budgets, without re-entering data.
• Historical estimate analysis: Comparing estimated versus actual costs on completed projects to improve estimating accuracy over time.
• Multiple revision tracking: ETO quotes often go through many revisions. The system should track each revision and the reasons for changes.

Procurement for Long-Lead Items

ETO procurement is challenging because you often need to order critical materials before engineering is complete:

• Early procurement: The ability to create purchase requisitions or orders for long-lead items based on preliminary engineering, before the complete BOM is finalized.
• Vendor quoting for project-specific items: Many ETO components are not catalog items. Your purchasing module needs to handle RFQ processes for custom or engineered components.
• Project-allocated inventory: Materials purchased for a specific project should be reserved for that project, not consumed by MRP for another job.
• Expedite tracking: With long lead times and critical path dependencies, procurement needs visibility into which items are on the critical path and tools to manage expediting.

Project Scheduling and Capacity Planning

ETO scheduling must bridge engineering, procurement, and production:

• Integrated project scheduling: A single timeline that shows engineering tasks, procurement lead times, and manufacturing operations for each project.
• Capacity planning across projects: Visibility into resource utilization across all active projects, identifying bottlenecks before they cause delays.
• What-if scheduling: The ability to model the impact of a new order on existing project schedules before committing to a delivery date.
• Critical path analysis: Automated identification of the critical path through each project, highlighting which activities will delay delivery if they slip.

Document Management

ETO companies generate enormous amounts of documentation for each project: engineering drawings, specifications, test reports, certificates, customer correspondence, and as-built records. Your ERP should either include document management or integrate tightly with a document management system, with documents linked to the relevant project, work order, or purchase order.

ERP Vendors for SMB Engineer-to-Order Companies

Small and mid-size ETO companies with $5M-$250M in revenue need ERP that addresses their project-based workflow without the cost and implementation timeline of enterprise platforms.

Epicor Kinetic

Best for: ETO manufacturers that also do configure-to-order and need flexibility across manufacturing modes.

Epicor Kinetic is one of the most popular ERP systems in the ETO mid-market, and its strength is versatility. The system handles ETO project manufacturing, CTO configuration, and MTO workflows within a single platform, which is critical for companies that operate across the manufacturing spectrum.

The project-based manufacturing module allows you to create project-specific BOMs and routings, track costs against project budgets, and manage engineering changes during production. Epicor's integration with major CAD platforms (SolidWorks, AutoCAD, Inventor) through partner connectors is solid, and the estimating module supports both parametric and detailed estimating.

Epicor's Advanced Planning and Scheduling (APS) module is particularly strong for ETO, providing finite capacity scheduling across multiple projects with visual Gantt-based planning. The system identifies resource conflicts and allows planners to evaluate the impact of new orders on existing commitments.

Where Epicor falls short: the native CAD/PDM integration is through partners rather than built-in, which means integration depth and quality vary by partner. Complex ETO companies with very deep BOM structures (10+ levels) should validate BOM management performance during evaluation.

Typical cost: $75K-$300K implementation, $40K-$150K annual subscription.

Infor CloudSuite Industrial (SyteLine)

Best for: ETO manufacturers with complex project management needs and deep BOM requirements.

Infor CloudSuite Industrial has particularly strong project-based manufacturing capabilities. The system's Project Manager module integrates project planning with production scheduling, procurement, and cost tracking. Each project has its own WBS, and all costs (material, labor, overhead, subcontracting) accumulate against WBS elements with real-time visibility.

Infor's BOM management is among the deepest in the mid-market. The system handles multi-level BOMs with revision control, effectivity dates, and engineering change management with impact analysis. For ETO companies building complex products with deep BOM structures, this depth is important.

The integration with CAD/PDM systems is available through Infor's PLM Accelerator and partner connectors. The system supports both direct CAD integration (for simpler setups) and PLM-mediated integration (for companies using Teamcenter, Windchill, or similar platforms).

The trade-off: Infor CloudSuite Industrial is more complex to implement than Epicor or SYSPRO. The project management capabilities are deep but require careful configuration to match your specific project workflows. Budget more time for implementation and training.

Typical cost: $100K-$400K implementation, $50K-$175K annual subscription.

SYSPRO

Best for: Mid-market ETO manufacturers that want a balance of project-based manufacturing and ease of use.

SYSPRO serves the ETO market with its project-based manufacturing and costing modules. The system supports project-specific BOMs, routing, and cost tracking, with good integration between purchasing, production, and project management. SYSPRO's user interface is generally considered more intuitive than Infor's, which translates to faster user adoption.

SYSPRO's strength for ETO is its flexibility in handling mixed manufacturing modes. Companies that do a combination of ETO, MTO, and MTS can manage all three within a single system without forcing everything into one workflow. The financial management module provides solid project costing and profitability analysis.

The limitation: SYSPRO's engineering change management and CAD integration capabilities are not as deep as Epicor or Infor. Companies with very complex engineering-to-production handoff requirements should evaluate these areas carefully.

Typical cost: $60K-$250K implementation, $30K-$120K annual subscription.

Global Shop Solutions

Best for: Smaller ETO and job shop manufacturers that need shop-floor-centric ERP.

Global Shop Solutions is designed for the job shop and small ETO manufacturer. The system covers quoting, job management, scheduling, inventory, purchasing, and shipping with a focus on shop floor operations. The visual scheduling module provides drag-and-drop job scheduling across work centers, which smaller ETO shops find intuitive and productive.

Global Shop Solutions' estimating module supports detailed cost buildup from materials, operations, and overhead, and estimates can convert directly into jobs. The system's shop floor data collection integrates with the job management module to provide real-time visibility into job status and labor cost accumulation.

The trade-off: Global Shop Solutions is purpose-built for smaller manufacturers. Companies that are growing toward the upper end of the mid-market ($100M+ revenue) or that need deep multi-entity financial management, advanced project portfolio management, or enterprise-scale reporting may outgrow the platform.

Typical cost: $40K-$150K implementation, $20K-$75K annual subscription.

JobBOSS2

Best for: Small job shops and ETO manufacturers that need an affordable entry point with fast implementation.

JobBOSS2 (by ECI Software Solutions) is designed for small job shops and ETO manufacturers. The system focuses on the core workflow: quoting, job management, scheduling, purchasing, and shipping. Implementation timelines are typically shorter than larger systems because the scope is more focused.

JobBOSS2's quoting module handles detailed cost estimating with material, labor, and burden calculations. The shop floor module provides real-time job tracking and labor data collection. For small ETO shops that are currently running on spreadsheets or legacy systems, JobBOSS2 represents a significant step up without the complexity of a mid-market platform.

The limitation: JobBOSS2 lacks the depth of project management, engineering change management, and CAD/PDM integration that larger ETO companies need. If your projects involve significant engineering design work (as opposed to fabrication or machining from customer-supplied drawings), you may need a more engineering-integrated platform.

Typical cost: $20K-$75K implementation, $10K-$40K annual subscription.

SAP Business One

Best for: ETO companies that want SAP's ecosystem credibility and a growth path to S/4HANA.

SAP Business One serves the ETO market through its production module and a network of partners that have built ETO-specific extensions. The platform provides solid financial management, basic production planning, and inventory control. Partner solutions add project-based manufacturing, estimating, and engineering change management capabilities.

The advantage of SAP Business One for ETO is the migration path. Companies that expect to grow significantly can start on Business One and move to SAP S/4HANA as their complexity increases, staying within the SAP ecosystem. The partner network for Business One is large, which provides options for implementation support and industry specialization.

The limitation: SAP Business One's native manufacturing capabilities are not as deep as Epicor or Infor for complex ETO production. The project-based manufacturing workflow relies heavily on partner add-ons, and the quality and support of those add-ons varies by partner.

Typical cost: $50K-$200K implementation, $25K-$80K annual subscription.

ERP Vendors for Enterprise Engineer-to-Order

Large ETO companies with $250M+ in revenue and complex, multi-site operations need platforms that handle enterprise-scale project manufacturing with deep configuration management and global operations support.

SAP S/4HANA

Best for: Large ETO manufacturers with complex multi-site operations and deep project-based manufacturing requirements.

SAP S/4HANA's Project System (PS) module, combined with its Production Planning (PP) module, provides the deepest project-based manufacturing capability at the enterprise level. The PS-PP integration allows companies to plan, execute, and cost complex projects that span engineering, procurement, and production across multiple plants.

For ETO, S/4HANA's strength is the ability to manage very large, complex projects with thousands of WBS elements, deep BOM structures, and integrated capacity planning. The in-memory HANA database provides real-time project cost rollups and profitability analysis that batch-based systems cannot match.

SAP's integration with PLM systems (including its own SAP PLM and third-party platforms) is the most mature in the market. The engineering-to-manufacturing BOM transformation, including structure conversion and change management, is a well-established process in SAP implementations.

Typical cost: $1M-$10M+ implementation, $400K-$2M+ annual licensing.

Infor LN

Best for: Complex ETO manufacturers that need the deepest BOM management and project-based manufacturing available.

Infor LN (the enterprise tier of the Infor manufacturing platform) was designed from the ground up for complex project-based manufacturing. The system's data model natively supports multi-level BOMs with effectivity, revision control, and configuration management at a depth that few competitors match. For companies building products with very deep BOM structures and complex configuration requirements, Infor LN is often the strongest technical fit.

The project management module integrates with manufacturing, providing end-to-end visibility from engineering through production to delivery. The system supports percent-of-completion revenue recognition, project-based cost accumulation, and earned value management for large ETO projects.

Infor LN's strength is manufacturing depth. The trade-off is complexity: the system requires experienced implementation partners and longer implementation timelines. User interface modernization through the Infor CloudSuite wrapper has improved the user experience, but the underlying complexity remains.

Typical cost: $750K-$5M+ implementation, $300K-$1.5M+ annual subscription.

IFS Applications

Best for: Project-based manufacturers that need strong project management and a modern user experience.

IFS has built a strong reputation in the ETO segment, particularly for companies where project management is as important as manufacturing management. The platform's project-based manufacturing module integrates project planning, engineering, procurement, production, and financial management into a unified workflow.

IFS differentiates on usability. The interface is more modern and intuitive than SAP S/4HANA or Infor LN, and the platform's approach to configuration (rather than customization) tends to result in faster implementations and smoother upgrades. For ETO companies that have struggled with user adoption on older platforms, IFS is worth evaluating.

IFS's document management and engineering change management capabilities are built into the core platform, providing tight integration between engineering documentation and production operations. The system also supports service and maintenance operations, which is valuable for ETO companies that provide aftermarket support for the equipment they manufacture.

Typical cost: $500K-$5M+ implementation, $250K-$1.5M+ annual subscription.

Microsoft Dynamics 365 Supply Chain Management

Best for: Large ETO companies that want Azure-powered analytics and strong Microsoft ecosystem integration.

Microsoft Dynamics 365 Supply Chain Management addresses ETO through its project-based manufacturing capabilities and partner-built ETO extensions. The platform's native integration with Azure, Power BI, and the broader Microsoft stack provides strong analytics and reporting capabilities.

Partner solutions built on Dynamics 365 add ETO-specific workflows including estimating, project-based BOMs, and engineering change management. The platform's extensibility through the Power Platform (Power Apps, Power Automate) allows companies to build custom workflows for ETO-specific processes without traditional development.

The trade-off: Like SAP Business One, the depth of ETO-specific functionality depends heavily on the partner solution. Microsoft's core platform provides the financial management, manufacturing, and supply chain foundation, but ETO workflows are delivered through the partner ecosystem.

Typical cost: $500K-$4M+ implementation, $200K-$1M+ annual licensing.

Oracle ERP Cloud

Best for: Large ETO companies with complex financial management needs and global operations.

Oracle ERP Cloud's project-based manufacturing capabilities handle large-scale ETO operations with integrated project costing, procurement, and production management. Oracle's financial management depth -- multi-entity, multi-currency, multi-GAAP -- is a strength for ETO companies with international operations and complex financial structures.

Oracle's supply chain and manufacturing modules support project-specific BOMs, complex routings, and integration with PLM systems. The platform's cloud-native architecture means regular updates without disruptive upgrades, which is valuable for companies that want to stay current without major IT projects.

Typical cost: $750K-$6M+ implementation, $300K-$1.5M+ annual subscription.

ETO ERP Cost Breakdown

SMB ($5M-$250M Revenue)

| Cost Category | Range | |---|---| | Software Licensing (Annual) | $10,000 - $150,000 | | Implementation Services | $40,000 - $300,000 | | CAD/PDM Integration | $15,000 - $100,000 | | Data Migration | $10,000 - $50,000 | | Training | $10,000 - $50,000 | | Total First-Year Cost | $85,000 - $650,000 |

Enterprise ($250M+ Revenue)

| Cost Category | Range | |---|---| | Software Licensing (Annual) | $200,000 - $2,000,000+ | | Implementation Services | $500,000 - $10,000,000+ | | CAD/PDM/PLM Integration | $100,000 - $1,000,000 | | Data Migration | $75,000 - $500,000 | | Change Management and Training | $100,000 - $750,000 | | Total First-Year Cost | $975,000 - $14,250,000+ |

What Drives Cost in ETO Implementations

• CAD/PDM integration complexity: The depth and quality of integration between engineering tools and ERP is often the single most underestimated cost element. Bidirectional synchronization with complex transformation logic is significantly more expensive than simple one-way data transfer.
• Estimating module configuration: Configuring parametric estimating with historical data requires significant domain expertise and data preparation.
• Engineering change workflow design: Designing and configuring change management workflows that match your actual engineering process (rather than forcing engineers into a generic process) takes time.
• Multi-mode manufacturing setup: Companies that operate across the ETO-MTO-MTS spectrum need each mode configured and tested, which multiplies implementation effort.

Implementation Considerations for ETO

Start with the Engineering-to-Production Workflow

The most critical process to get right in an ETO implementation is the flow from engineering design to production execution. Map this workflow in detail before implementation begins:

1. How does engineering receive order requirements?
2. How and when is the BOM created in CAD/PDM?
3. What approval gates exist before release to manufacturing?
4. How are engineering changes during production handled?
5. How are long-lead materials ordered before engineering is complete?

Getting this workflow right in your ERP will determine whether the system accelerates your business or becomes a bottleneck.

Invest in Estimating Configuration

ETO profitability depends on estimating accuracy. Invest the time during implementation to:

• Load historical project data so parametric estimating has a baseline
• Configure cost roll-up structures that match how you estimate (by project phase, by discipline, by cost type)
• Establish the estimate-to-project conversion workflow so won quotes flow into project execution without re-entry
• Set up estimated versus actual comparison reports so you can improve estimating over time

Plan for CAD/PDM Integration Early

CAD/PDM integration is typically on the critical path of an ETO implementation. Start the integration design early -- ideally in the requirements phase -- because decisions about BOM structure, part numbering, and revision management in ERP must align with how your engineers work in CAD/PDM. Changing these decisions later is extremely disruptive.

Train Engineers, Not Just Operators

In ETO companies, engineers are users of the ERP system, not just consumers of reports. Engineers create BOMs, initiate engineering changes, participate in procurement decisions for engineered components, and review project cost status. Your training plan must include engineering-specific training that shows engineers how to use ERP within their design workflow, rather than treating ERP as an administrative burden imposed on them.

Frequently Asked Questions

What is the difference between ETO and job shop ERP?

Job shop ERP focuses on managing individual jobs (typically short-duration manufacturing orders for machining, fabrication, or assembly to customer specifications). ETO ERP encompasses the entire lifecycle of a custom-engineered product: estimating, engineering design, BOM creation, project management, procurement, production, testing, and delivery. A job shop typically works from customer-supplied drawings. An ETO company creates the designs. If your business involves significant engineering design work as part of the order fulfillment process, you need ETO ERP, not just job shop management.

How important is CAD integration for ETO ERP?

CAD/PDM integration is one of the most important technical requirements for ETO ERP. Without it, someone on your team is manually re-entering BOMs from engineering drawings into the ERP system -- a process that is slow, error-prone, and creates a disconnect between engineering and production. The integration eliminates this re-entry, ensures BOMs in ERP match current engineering designs, and provides shop floor access to current drawings directly from work orders. The specific integration depth you need depends on your CAD/PDM platform and the complexity of your products.

Can we use ETO ERP for standard products too?

Yes. Most ETO ERP systems also handle make-to-order, configure-to-order, and make-to-stock manufacturing. Epicor, Infor CloudSuite Industrial, SYSPRO, and the enterprise platforms (SAP, IFS, Infor LN) all support multiple manufacturing modes. The key is to evaluate whether the system handles the transition between modes gracefully -- for example, when a custom-engineered product becomes a standard offering, can you convert the project-based BOM into a standard BOM for repetitive production without starting over?

How do we handle estimating in ERP versus standalone tools?

Many ETO companies currently estimate in spreadsheets or standalone estimating tools. Moving estimating into ERP (or tightly integrating a standalone tool) provides two major benefits: first, won estimates convert directly into project plans with budgets, eliminating duplicate data entry. Second, actual project costs accumulate against the estimate structure, allowing you to compare estimated versus actual at a detailed level and improve estimating accuracy over time. If your ERP's estimating module is not deep enough for your needs, look for integrations with specialized estimating tools that can pass estimate data into the ERP project structure.

What is the biggest risk in an ETO ERP implementation?

The biggest risk is implementing a generic manufacturing workflow instead of a project-based workflow. When this happens, the ERP forces engineers and project managers into processes designed for repetitive manufacturing, and the organization either works around the system (defeating the purpose) or changes its processes to fit the software (reducing effectiveness). The mitigation is to ensure your implementation partner has deep experience with ETO companies -- not just manufacturing companies in general -- and that the implementation is designed around the project-based workflow from day one.

How long does an ETO ERP implementation take?

For small ETO companies implementing a mid-market system (JobBOSS2, Global Shop Solutions), plan for 3-6 months. For mid-market ETO companies implementing Epicor, Infor CSI, or SYSPRO, plan for 6-12 months. For enterprise implementations of SAP S/4HANA, Infor LN, or IFS, plan for 12-24 months. The CAD/PDM integration and estimating configuration are the areas most likely to extend the timeline, so address them early.

Should engineering drive the ERP selection or operations?

Both must be involved, but if you had to weight one side more heavily, weight engineering. In an ETO company, engineering is the starting point for everything -- the BOM, the cost, the schedule, the quality requirements. If engineers reject the ERP system because it creates friction in their design process or forces them into workflows that do not match how they work, the implementation will fail regardless of how well it serves operations. Include engineers in vendor demonstrations, pilot testing, and process design from day one.

How do we handle long-lead procurement before engineering is complete?

This is one of the most common operational challenges in ETO, and your ERP must support it explicitly. The typical approach is to create preliminary or "phantom" BOM items based on the estimate or preliminary engineering, and issue purchase orders for known long-lead items (castings, forgings, motors, specialty materials) against these preliminary requirements. When engineering is completed and the BOM is finalized, the preliminary items are replaced by the actual engineered components, and the purchase orders are reconciled. Your ERP must handle this transition cleanly, including cost allocation from preliminary to final items.

What questions should we ask vendors about ETO support?

Ask these specific questions during vendor evaluation: How does your system create and manage project-specific BOMs that evolve during engineering? Walk us through an engineering change on a project that is already in production. How does your estimating module handle parametric versus detailed estimating? Show us how a won estimate converts into a project plan with budgets. What CAD/PDM systems do you integrate with, and what does the integration include (BOM transfer, drawing links, revision sync)? How does your system handle procurement for long-lead items before engineering is complete? Show us a project profitability report comparing estimated versus actual costs at the WBS level.

Do we need PLM in addition to ERP for ETO?

It depends on your product complexity and engineering volume. If you are a smaller ETO company with a handful of engineers using SolidWorks with PDM, a direct CAD-to-ERP integration may be sufficient. If you are a larger operation with multiple engineering disciplines, complex configuration management requirements, and formal product lifecycle processes (design reviews, engineering release, change board), a dedicated PLM system (PTC Windchill, Siemens Teamcenter, Autodesk Fusion Lifecycle) alongside your ERP is likely necessary. PLM manages the engineering lifecycle; ERP manages the business and production lifecycle. The integration between them is critical.

Next Steps: Build Your ERP Requirements

ETO ERP selection requires more careful requirements definition than most other manufacturing segments because the standard feature checklists do not cover the project-based, engineering-driven workflows that define your business. Before engaging vendors, document how you estimate, how engineering creates and releases designs, how changes are managed during production, and how project costs are tracked and reported.

Build your ERP functional requirements with our free template to get started. The template covers all major ERP modules and can be extended with ETO-specific requirements for project-based manufacturing, estimating, CAD/PDM integration, and engineering change management.