Production control in engineer-to-order firms

Abstract

During the last decade many engineer-to-order firms have tried to implement MRP II systems, however, the little or no success. The choice of a MRP II system is often based on the wide availability of MRP II software and the fact that the exact reasons why this software is not suitable for engineer-to-order firms are not understood. Therefore, the many implementation failures are not surprising. In the first part of this paper we will discuss the main differences between engineer-to-order manufacturing and the make-to-stock manufacturing (which was the basis for the development of MRP II software). Important characteristics of the engineer-to-order situation are: the important role of the customer order, the customer-specific product specifications and the product and production uncertainty. These characteristics of the engineer-to-order production situation differ substantially from the basic assumptions of MRP II. An engineer-to-order situation thus asks for a completely different production control system. In the second part of this paper we will present a production control framework which better suits the specific characteristics of the engineer-to-order situatio