Unlocking Swiss Productivity: Why Moving from ETO/DTO to CTO Can Free Up Millions

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The Hidden Cost of Complexity in Swiss Industry

Switzerland is renowned for its high-value manufacturing and innovation. Yet, a recent analysis of the financial results of 10 leading Swiss-listed companies across sectors such as pharma, medtech, automation, and advanced industrials reveals a common challenge:
the cash conversion cycle (CCC) is often extremely long—sometimes exceeding 200 days.

What’s Behind a High CCC?

Many Swiss companies operate with highly customised processes:

  • ETO (Engineering to Order): Each product is engineered from scratch for the customer.
  • DTO (Design to Order): Each order requires a new design, though some modules may be reused.

These models maximise customisation but also lead to:

  • High inventory levels (DIO)
  • Long lead times
  • Capital tied up for months

The result? A high CCC—the time it takes to turn investment in inventory and resources into cash from sales.

The CTO Opportunity

CTO (Configure to Order) is a different approach:
Products are built from pre-engineered modules or platforms, and the final configuration is done only at the last step, based on customer choice.

Our analysis shows that moving from ETO/DTO to CTO, wherever possible, can reduce the CCC by 10–30%.

What Does That Mean in Practice?

Let’s take a hypothetical Swiss company with 1 billion CHF in annual revenue and a CCC of 250 days:

  • If the CCC is reduced by 20% (to 200 days),
  • This frees up capital tied in inventory and receivables by approximately 55 million CHF (calcolo: 1B CHF × 20% × (250/360)).

That’s cash that can be reinvested in R&D, digitalisation, or growth—without raising new debt or equity.

Why Now?

  • Supply chain shocks, geopolitical tensions, and volatile demand make agility and cash efficiency more important than ever.
  • Companies that modularise products, digitalise processes, and adopt CTO/platform thinking will be more resilient and competitive.

Conclusion

The Swiss industrial model is a global benchmark for quality and innovation.
But to stay ahead, it’s time to rethink internal processes:
Moving from ETO/DTO to CTO can unlock millions in working capital, shorten lead times, and boost productivity—without sacrificing quality.

Location: Zurigo, Svizzera

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