Question

Why does an ETO operation consider product and process design as a production activity? How does it complicate the production planning and control process?

Answer 1

A. The ETO stands for the Engineer to Order. It is the approach used in producing goods. Under this approach, the products are produced as per the specific requirement of the client. This approach includes the process of designing and developing the goods, which is considered as the core activity as it involved the intervention of clients all the time so that the customer’s requirement can be achieved. Therefore it can be said that the ETO operation considers the designing of a product or process as production activity.

B. In the ETO operation, the engagement of the client is necessary and this is the main drawback of this approach. Due to continuous customer interaction, there is less control over the planning and designing process. The ETO Company and customer exchange the information related to designing and developing products and this may lead to a misunderstanding of information from either the parties. This can be a hurdle and complicates the entire production process.