Prepared by:

ETO and Creating

‘Parts on the Fly’

Using Oracle EnterpriseOne v9.1 Engineer to Order (ETO) Manufacturing to create Parts Lists and Routings without prior creation of BOMs and Routings

Keith Figgins, CPIM

Agenda

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1. Project Requirements for ETO

2. What is ETO? When to use it?

3. ETO and Parts on the Fly (POF)

4. Attachments

Project Requirements

• Utilize EnterpriseOne v9.1 to replace legacy Epicor systems

– Users had flexibility to create Projects and WO’s without creating Item Masters or Branch Plant records. No standard BOMs or Routings were used.

– Historical Projects and WO’s were copied for new customer orders and then revised based on engineering requirements.

– Multiple WO’s were linked together under a Project to determine Actual Production Cost vs. Estimated-Contractual cost.

• Solution

– Implement E1 v9.1 ETO to link project WO’s together for managing purchasing, production, and costing.

– Develop innovative solution to address users requirements to create WO’s, Parts, and Routings without requiring Master Data configuration.

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Brief Overview of ETO

JD Edwards supports 6 kinds of Manufacturing

1. Discrete

2. Process

3. Rate Based

4. Project

5. Engineer to Order

6. Demand Flow (Lean)

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Differences between MTS/MTO and ETO

• Make to stock (MTS) & Make-to-Order (MTO) are

similar.

• In MTO, production work orders are linked to sales

orders.

• In MTS, production work orders are based on sales

forecast.

• MTS is a usually associated with the industrial revolution

mass production techniques, where in anticipation of

demand for quantities of goods, they are produced and

stocked in warehouses.

• The advantage of producing for stock/sales is that you

are able to spread production evenly over a given time

period, avoiding most of the hectic scenes that often

characterize make-to-order production.

1. What is Engineer to Order (ETO)?What

• Supplier and ETO manufacturer interactions are more critical, as ETO customers order unique items.

• ETO materials are project specific and items are not frequently used or ordered,

• Components usually have long lead times, compared to MTS manufacturers.

Key ETO ERP characteristics include:

• Tight scheduling is expected with no scope of error.

• Unique components and end items

• Enhanced inventory control (by Project) and Vendor management (by Project)

• Evaluating actual manufacturing costs against quotes provided to project customer.

What is ETO?

Examples of ETO Products

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When to use ETO vs. MTO?• Costing (Actual Cost, Job Cost). Need ability to

manage multiple WO’s under a single project while

managing and consolidating multiple WO costs

(WBS-Work Breakdown Structure)

• Need ability to link and track non-manufacturing

tasks/activities with a project for a finished item(s)

(Engineering, Long lead Time Purchases, Services)

• Monitor quotes and estimates against actual costs.

• Purchasing (Material Management) needs visibility

to purchase, inventory, and issue materials by

project. Project Requirements Planning (PRP)

• Need to link to multiple WO’s together for Planning

(scheduling) with WO sub-assembly dependencies

and Start when Finish (MS Project)

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MTS/MTO verses ETO Summary

Suppliers

Customers

Manufacturer

Engineer to Order

• Finished Item: unique Design Requirements

• Non-Standard Components

• Actual cost measured against Budget-Quote

• Longer Manufacturing Cycle

• Unique Outside process requirements

• Multiple WO’s and PO’s tracked to a Project-Finished Item

Make to Order• Mostly static BOM and Routing

• Similar end items and components

• Standard Costs measurement

• Commonality permits maximum shop floor efficiency and utilization

• Standard Outside Processes

Engineer to Order Project Manufacturing

Purpose of functionality

Engineering. WBS.

Planned/Actual cost

management

Process visibility through

Production Number

(Pegging)

Target industryDesign/Fabricate/Deliver/Inst

all

Custom

Fabrication/Configured

Scope of production method ETO, CTO CTO, MTO, MTS

Frequency of sales order Almost one time only Repetitive

Production volume Low Low to High

Total throughput time Months to years One day to a few months

Which number to peg? Project Number Production Number

What can be pegged? SO, WO, PO Forecast, SO, WO, PO

ETO vs. Project Manufacturing

Comparison ITEMS JDE E1 ETO Project Manufacturing

Multiple Deliverables YesOne demand per Production

Number

Dependencies between

tasks/deliverablesYes No

Types of Work OrdersManufacturing, Service,

EquipmentManufacturing Only

How to peg the number to

all orders?

Auto-assign Project number

through PRP or Project

Workbench

Auto-assign Production Number

to orders through MRP, assign

at Inventory Issue or Re-assign

manually through Production

Number Workbench

Can Inventory be reserved

for project?Hard Project Commitment

Standard Commitment

Functionality

Which orders can be

aggregated?N/A PO, Inventory

Cost roll-up Based on Project WBSBased on Manufacturing Cost

Roll-up

Licensed Under Manufacturing Management Requirements Planning

Differences between ETO and Project Mfg.

ETO Phases Overview

Oracle EnterpriseOne Engineer to Order provides

information and mechanisms to move a project

through these four phases that are commonly

associated with projects:

• Project initiation

• Project planning

• Project execution

• Project close

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ETO is Cross Functional

ETO utilizes almost all of the EnterpriseOne ERP systems

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ETO and Creating ‘Parts on the Fly’

Using E1 v9.1 Engineer to Order

Manufacturing to create Parts Lists and

Routings without prior creation of BOMs

and Routings

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Engineer to Order (ETO) Supposition:

• ETO creates Work Orders within a Project that consists

of standard inventory parts and parts that will be used

only once.

• Historically, creating Item Master, Branch/Plant (B/P) and

BOM records for one time parts resulted in additional

effort and records.

• How can ETO facilitate purchasing one time parts to

reduce entry effort and creating unnecessary records?

• Using Oracle’s EnterpriseOne v9.1, ETO creates WO

parts lists and sub-assemblies for ‘Parts on the Fly’

(POF) that do not require creating Item Masters, B/P

records, BOMs or Routings.

• The POF can be tracked using Lot Traceability and used

in Actual Costing of the Finished Item.

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Overview of ETO Process

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ETO POF Part Configuration:

• The Finished Good item must be a Part with an Item

Master and B/P record.

• Finished good must be setup with costing level 3

(F4101) and B/P Cost 09 = Actual Cost (F4105).

• Create IM and B/P for Generic Component:

Standard (C1) and Inspection (C2 - Receipt

Routing). Lot Processing turned on at component

level.

• Generic Component: Stock type = H. Cost level 3

and B/P Cost 08 = Purchase Base Cost (F4105).

• Create Generic Sub-assemblies like generic

components with different levels for visual clarity

and cost tracking (SA1, SA2, SA3, etc.). Cost level

3 and Cost 09 (F4105).

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ETO POF Configuration Requirements

(cont.):

• Lot tracking is implemented by component and sub-

assembly

• Setup Standard ETO Project configuration.

• PO line type and PO Receiving program (P4312)

auto issues project parts so that POF are auto

issued to Project upon PO Receipt.

• Configure receipt routing for C2 and appropriate

vendors.

• Create ‘Dummy’ BOM and Routing for SAx sub-

assembly to eliminate ‘No BOM/Routing’ Warnings.

• Job Cost not Required.

• Actual Costing is used.

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ETO POF Process:

• Create ETO Project. Add Work Orders for finished item

and sub-assemblies (SA1, SA2, SA3, etc.). SAx re-

used at multiple levels.

• Make sub-assemblies (SA1, SA2, etc.) as Backflush (B)

in the Parent parts list so that completions (P31114) will

auto issue them to Parent with WO Lot number/Cost.

• In WO parts list, add components C1/C2. Cut/paste text

description from an excel parts list. Add proposed

vendor and cost for the POF. Add POF part specs in

attachment. Can also copy parts list from historical WO.

• C2 is Receipts Routing component.

• Create Requisition/PO from the parts list.

• Consolidate Requisitions (OR) to a Purchase Order

(OP) by Vendor (P43060).

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ETO POF Process:

• Print Purchase Order with C1/C2 part and description

and specs from Parts List, Requisition text attachment.

• Receive PO. Part is auto issued to the WO parts list

(Line Type and Processing Option P4312).

• Lot numbers are assigned to each POF (C1/C2) from

next numbers at receipt time.

• Receipt Routing will be called for C2 items.

• WO Routings can also be created on the fly. No Part

routing necessary. Can also copy Routing from a

historical WO.

• Also create Outside Operations on the Fly. No need to

run R31410 Process/Print WO. Outside OP purchase

order will need to be manually priced.

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ETO POF Process:

• POF parts lists and manually created routings will

interactively update Planned Costs in the ETO Work

Bench.

• Completions (P31114) will update actual costs to

Finished item in the F4105 (09 Actual cost).

• WIP Accounting (R31802a) will create GL entries.

• Roll actual WIP costs to ETO Work Bench as needed to

compare actual vs. planned WO costs (R31P301)

• Item/Lot Traceability created from purchased POF

components and Sub-Assembly POF to Finished Item.

• Can inter-mix Stock items with POF (STKT = H for PRP)

• Can inter-mix Stock BOMs and Routings with POF sub-

assemblies (Mixed Mode).

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ETO POF Pro/Cons:

• No creation of unnecessary Items, B/P, BOM, or

Routings.

• Faster creation of WOs when using ETO and POF.

• Requisition consolidation and receipt routing will

work with POF. Fewer PO’s created.

• Outside Ops IM and B/P created interactively. Must

manually create Cost (F4105) or manually cost PO.

• Benefits of ETO: Scheduling, Cost Management

(planned vs. Actual) remain available.

• POF will not work with standard manufacturing, or

standard costing. Can mix POF with standard cost

items.

• POF will not work with MRP/PRP.

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ETO POF SRs:

• 21976680 : Purchasing Receipts Program Over rides WO parts List description when parts Auto Issue at PO Receipt

• 21975662 : Text from Parts list does not transfer to PO when created from P3111.

• 13930254 : Parts Auto issued at PO Receipt to WO Parts List do not equal R31802a GL.

• 22582407 : Consolidating ETO Requisitions to PO’s and Auto Issue at PO Receipt

• 23041792 : Planned Costs not updated until re-enter WO Parts List/Routing and Change Qty/Hrs

• 23049222: Reserved by error occurs when attempting to add WO P/L on new task.

• 23091564: R31804. No accounting batch created when there are AAI errors.

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ETO and POF Attachments

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ETO Pages

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ETO Project Work Bench : Creating a Project

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ETO Project Work Bench : Adding WO’s

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ETO Project Work Bench : POF in Parts List

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CafeOne in ETO

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CafeOne in ETO

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ETO Project Work Bench : Consolidate Req’s

to PO’s by Vendor

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ETO Project Work Bench : Receive PO’s and

Receipts with Lots auto Assigned

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ETO Project Work Bench : Create Outside Ops

PO on the fly.

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Questions & Answers