Investment projects in extractive industries: The role of engineer-to-order machinery

Abstract

Investment decisions in extractive industries increasingly depend on the technological configuration of engineer-to-order (ETO) machinery. This study explores the role of ETO projects in reshaping investment logic within extractive industries. To strengthen conceptual framing, we explicitly distinguished between primary and secondary ETO within the multi-project investment structure. Special attention was given to secondary ETO—the adaptation of standardized equipment to specific geological conditions—which emerges as a critical component of multi-project investment strategies. We clarified that the novelty of the approach lies in treating secondary ETO as an embedded, corrective investment rather than a standalone engineering decision. In addition, we quantitatively assessed the impact of ETO-related expenditures within multi-project investment, using the net present value indicator. This study introduced a model that comprises both the base serial equipment and a custom ETO component, enabling the achievement of the designed performance parameters. To analyze sensitivity, we employed the Box-Wilson experimental design method. Results showed that ETO costs had no significant influence on the response function (i.e., the production volume required to reach breakeven), whereas the most critical factors were the marginal revenue and the project duration. Theoretically, this study reconceptualizes ETO not as an isolated manufacturing decision but as a functional component within broader investment planning. These results reinforce the conceptual distinction between primary and secondary ETO by demonstrating that corrective engineering adaptations embedded in multi-project structures do not alter the financial breakeven logic.

Keywords

Engineer-to-order / Mechanical engineering / Large companies / Investment / Multi-project / Extractive industries

Acknowledgments

None.

Funding

None.

Conflict of interest

The authors declare that they have no competing interests.

Author contributions

Conceptualization: All authors

Data curation: Viktor Artemov

Formal analysis: Viktor Artemov

Investigation: All authors

Methodology: Danylo Cherevatskyi

Visualization: Viktor Artemov

Writing-original draft: Danylo Cherevatskyi

Writing-review & editing: All authors

Ethics approval and consent to participate

Not applicable.

Consent for publication

Not applicable.

Availability of data

The data that support the findings of this study are available from the corresponding author upon reasonable request.

References

[1] Giljum S, Maus V, Sonter L, et al. Metal mining is a global driver of environmental change. Nat Rev Earth Environ. 2025; 6:441-455. doi: 10.1038/s43017-025-00683-w

[2] Fiscor S. U.S. Longwall census: Production declines in 2024. Coal Age. 2024; 130(1):16-22.

[3] Liu D, Wang D. Evaluation of the synergy degree of industrial de-capacity policies based on text mining: A case study of China’s coal industry. Resour Policy. 2022;7:102547. doi: 10.1016/j.resourpol.2021.102547

[4] Fiscor S. Longwall production loses a little steam. Coal Age. 2023; 128(1):18-27.

[5] Sharke P. No run of the mill. Mech Eng. 2005; 127(3):32-35. doi: 10.1115/1.2005-MAR-2

[6] Fortes CS, Tenera AB, Cunha PF. Engineer-to-order challenges and issues: A systematic literature review of the manufacturing industry. Proc Comput Sci. 2023;219:1727-1734. doi: 10.1016/j.procs.2023.01.467

[7] Schulze F, Dallasega P. Lean and Industry 4.0 mitigating common losses in Engineer-to-Order theory and practice: An exploratory study. Flexible Serv Manuf J. 2024; 36:780-820. doi: 10.1007/s10696-023-09503-z

[8] Masi A, Pero M, Abdelkafi N. Modularity and operational efficiency in ETO companies:A study in the machine tool industry. In: Conference XXVI Summer School “Francesco Turco” - Industrial Systems Engineering; 2021. p. 1-7.

[9] Schulze F, Dallasega P. Industry 4.0 application in ETO companies:An empirical comparison. In: IFIP International Conference on Advances in Production Management Systems. Cham: Springer Nature Switzerland; 2023. p. 213-228. doi: 10.1007/978-3-031-43670-3_15

[10] Tedaldi G, Miragliotta G. The role of Engineering-to-Order machinery manufacturers in future Cloud Manufacturing supply chains: A business case and a strategic perspective. Prod Plann Control. 2022; 33(9-10):1011-1023. doi: 10.1080/09537287.2020.1837942

[11] Mustonen E, Harkonen J. Commercial and technical productization for design reuse in engineer-to-order business. IEEE Trans Eng Manag. 2022;71:1271-1284. doi: 10.1109/TEM.2022.3155791

[12] Micale R, La Fata CM, Enea M, et al. Regenerative scheduling problem in engineer to order manufacturing: An economic assessment. J Intell Manuf. 2021;32:1913-1925. doi: 10.1007/s10845-020-01728-1

[13] Tian W, Wang L, Bu G. Application of modern machinery design method in mine machinery design. J Phys Conf Ser. 2021; 1748(6):062003. doi: 10.1088/1742-6596/1748/6/062003

[14] Makinde OA, Mpofu K, Popoola API. Review of the status of reconfigurable manufacturing systems (RMS) application in South Africa mining machinery industries. Procedia CIRP. 2014; 17:136-141. doi: 10.1016/j.procir.2014.02.035

[15] Alexander R. The Fourth Industrial Revolution in South African Manufacturing and Connectivity: Case Studies of Automotive and Mining Equipment Manufacturing, along with Transportation and ICT Infrastructure and Services. Sarchi: University of Johannesburg; 2021.

[16] Yeo KT, Qiu F. The value of management flexibility -a real option approach to investment evaluation. Int J Project Manag. 2003; 21(4):243-250. doi: 10.1016/S0263-7863(02)00025-X.

[17] Bai L, Yang M, Pan T, Sun Y. Project portfolio selection and scheduling incorporating dynamic synergy. Kybernetes. 2025; 54(2):996-1026. doi: 10.1108/K-04-2023-0694

[18] Wiers CR. Other Business Contacts. Chicago, Illinois: The Rotarian. Rotary International; 1928. p. 10-11. Available from: https://books.google.li/books?id=H0YEAAAAMBAJ&hl=de&source=gbs_all_issues_r&cad=1 [Last accessed on 2025 Nov 10].

[19] Upadhyay S, Garg SK, Sharma R. Analyzing the factors for implementing make-to-order manufacturing system. Sustainability. 2023; 15(13):10312. doi: 10.3390/su151310312

[20] Pavlenko MV. Clients in the Industry. Ekonomika Promyshlennosti. Donetsk: Institute of Industrial Economics of NAS of Ukraine; 2008. p. 110-119.

[21] Beşikci U, Bilge Ü, Ulusoy G. Multi-mode resource constrained multi-project scheduling and resource portfolio problem. Eur J Oper Res. 2015; 240(1):22-31. doi: 10.1016/j.ejor.2014.06.025

[22] He N, Zhang DZ, Yuce B. Integrated multi-project planning and scheduling-a multiagent approach. Eur J Oper Res. 2022; 302(2):688-699. doi: 10.1016/j.ejor.2022.01.018

[23] Baerenbold R. Reducing risks in megaprojects: The potential of reference class forecasting. Project Leadersh Soc. 2023;4:100103. doi: 10.1016/j.plas.2023.100103

[24] Ashkanani SH, Franzoi R. An overview on megaproject management systems. Manag Matters. 2022; 19(2):129-148. doi: 10.1108/MANM-01-2022-0006

[25] Relich M, Nielsen I, Gola A. Reducing the total product cost at the product design stage. Appl Sci. 2022; 12(4):1921. doi: 10.3390/app12041921

[26] Aksoy DO, Sagol E. Application of central composite design method to coal flotation: Modelling, optimization and verification. Fuel. 2016; 183:609-616. doi: 10.1016/j.fuel.2016.06.111

[27] Cherevatskyi DY. Types of investment projects and annuities that ensure their breakeven. Econ Promisl. 2006; 2(33):98-103.

[28] Serdiuk OS. Concession for completion of prepared mine field stocks with followed liquidation of coal mining enterprises. Econ Promisl. 2016; 4(76):59-69.

[29] Krasnyk V, Cherevatskyi D, Smirnov R, Bash V, Bojko O, Onachenko К. Iron ore extract by the mine method: Regression model of an ecological backpack. ScienceRise. 2024;1:36-42. doi: 10.21303/2313-8416.2024.003609

[30] Amosha OI, Cherevatskyi DY, Bash VO. Regarding the resilience of market entities on the example of enterprises in the extractive industry. Econ Promisl. 2023; 4(104):5-21. doi: 10.15407/econindustry2023.04.005

[31] Wisker A. Miss lonelyhearts. In: The Writing of Nathanael West. London: Palgrave Macmillan; 1990. doi: 10.1007/978-1-349-20834-0_4