Product Functional Structure Model for Engineer-to-Order Production: A Case Study on Drilling Machines

Abstract

Engineer-to-order (ETO) manufacturing is required for designing a product that matches customer requirements. However, firms face challenges when the proposed product specifications need to be changed after the contract has been signed. These changes lead not only to additional costs, but also to lost time for the design, production, and parts supply departments. To correct the product specifications, we propose a product functional structure model for accurately determining the product functional specifications. Using the product functional structure model, the customer requirements can be defined clearly, and unrealizable specifications of a product can be avoided. As a result, the firm can reduce parts inventory costs.