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Can Oracle CPQ will replace ETO (Engineer-To-Order) Solution?

 



The Organization Sales Lifecycle can be divided into 3 micro-processes: "Lead to Opportunity," "Opportunity to Order," and "Order to Invoice". Data flows in real-time after integration of these 3 micro processes. An opportunity is generated, completed configuration, and pricing is authorized, For the Outbound data to flow from Oracle Sales Cloud flows directly into Oracle CPQ Cloud further integration is required. After this an ERP system (Oracle EBS) can get relevant opportunities, Processes the order-creation cycle, and create an invoice.




A sales opportunity can be implemented into a quote and later into an order in less time using Oracle ICS (Oracle Integration Cloud Service). Data will be made in sync between Oracle CPQ Cloud, Oracle Sales Cloud and Oracle EBS in real-time after the integration complete.


There is growing demand for configure to order, engineer to order features to transform a major portion of client business while retaining current business capabilities.We can use single set of main product data between Oracle EBS and Oracle CPQ Cloud thru integration.


Oracle CPQ alone cannot support engineer-to-order process due to below challenges in ETO solutions. But below blog gives some steps to overcome these challenges.


Challenges of an Engineer-To-Order (ETO) product:


Each approach to getting a product designed and manufactured brings along its own set of challenges;


Implement some of the common issues associated with an engineered to order approach by using below steps.


A high level of end customer participation is required in design and manufacturing of the product for an engineered-to-order method. A complex product becomes reality when multiple parties' works with a good process and good design approach. If Process and Design breaks which leads to manufacturing phase.


With engineered-to-order method production knowledge and specs are constantly flows between the ETO solution provider and the end customer. Product knowledge (design specifications, requirement files, engineering changes,) is often runs back and forth many times between the ETO Solution Provider and the end customer, either party can become confused if the exchange of product knowledge is poorly managed. For example, it might be challenge to answer questions like how much and what inventory should be lined up for production.


Because engineered-to-order products are customized, they are often manufactured from difficult to source parts, costly parts and highly engineered components. It is time consuming, laborious and costly causing issues before and during production runs to acquire required product components.


ETO solution providers often face challenges when managing engineering modifications because finalizing engineering specs can often require several reviews. Hence it is important to define how engineering modifications will be handled in a contract, which includes determining what types of modifications will be considered or rejected and what you will charge for engineering modifications. By establishing the base rules upfront, you can ensure both parties are happy and understand cost impact as updates come through.


Below are the ways to tackle ETO challenges and create a strong foundation for success.


It is important to manage and store product data and even though challenges can arise with the engineered-to-order method. Benefits can be achieved by documentation during design and manufacturing stages. As major customization to be done for products during Engineer-To-Order method, we need to maintain information of all the product knowledge.


Create efficiency in processes by these steps, ensure you have plan for gathering and managing documents from the beginning of the project to end of project. Without collecting documents risk is high and hit organizational problems. Hence initiate early to scale up with greater efficiency and lesser errors.


It is also important to ensure you are in fact building what the customer ordered. Be certain that all customer demands have been both documented and approved throughout the production process. To show customer requirements are being met include this information in a design and manufacturing plan. Keep in mind too that the product needs to meet not only the requirements of the customer, but also should fulfill the appropriate quality and compliance requirements. An ETO solution provider can publish final product document of end customer specifications with the product when engineered-to-order project is complete.





ETO or PLM Solution should provide a way for manufacturers to manage product data electronically, including part numbers, BOMs and engineering changes. If we build the software as cloud-based then it is easy to get started. The system should also be designed to support product data collaboration between multiple parties.


The benefits gained from a BOM and change management system easily outweigh the expensive product problems that can arise during the design and manufacturing stages. ETO Solution will capture, manage, and reuse corporate intellectual property to automate engineering processes for manufacturers. This will simplify business processes and increase the predictability of costs, margins, and on-time delivery.


Oracle CPQ features needs to be extended to support Engineer-To-Order features as stated above to create SINGLE robust solution.


References:

http://www.infosysblogs.com/oracle/2017/01/oracle_bigmachine_cpq_one_solu.html

https://docs.oracle.com/cloud/latest/intcs_gs/ICSUC/GUID-A32F7ADF-FC14-4E58-872A-DFB56CA0A4F6.htm#ICSUC-GUID-A32F7ADF-FC14-4E58-872A-DFB56CA0A4F6

https://www.oracle.com/applications/primavera/solutions/engineer-to-order/index.html

https://cloud.oracle.com/cpq-cloud

















Comments

Briefly touches upon ETO and Oracle CPQ. Nice over view of ETO and Oracle CPQ. Also summarizes, how oracle CPQ needs to be extended to support ETO. Overall, a concise blog on Oracle CPQ and ETO

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