Managing industry transitions in ETO: the case of yard intralogistics

Abstract

Engineer-to-order (ETO) supply chains are configured to deliver unique and complex products to serve specific market demands. If market requirements change, ETO supply chains must adapt to survive and thrive. This paper examines the measures ETO companies should consider to ensure that their supply chains meet the demands of changing business environments. In particular, the paper focuses on how the yard-intralogistics processes of a large supplier are affected by the current transition toward sustainable energy solutions within the oil and gas industry. A comparison between current intralogistics processes and the requirements of emerging product portfolios and project setups reveals the need for process redesign and supply-chain realignment. Current yard-intralogistics processes, which are designed for large-scale projects, lack the efficiency required by the smaller-scale, renewable projects that will be necessary in the future. Our investigation shows that intralogistics processes must be significantly changed and that such a shift will not be possible without addressing operational and organizational structures concurrently. We argue that there are critical interdependencies between operational and organizational measures. The ability of companies to manage this interdependency is crucial for ETO-based industry transitions. A framework for the transformation of ETO companies in the context of industry transitions is presented, highlighting the operational and organizational challenges involved. This framework serves as a guideline for practice and as a reference model for further research.