Manufacturing Environments

Today, since I have been dragged into the world of manufacturing, we will try to shed some light into the most common manufacturing systems, but prior to that, a fairly extensive definition of “manufacture” is needed to understand the several manufacturing processes that a company could choose amidst.

Manufacture can be defined as the process of raw material into a finished product, especially by means of a large-scale industrial operation.

 There are five basic manufacturing or production environments

 

- Build to Stock or Make to Stock, often abbreviated as BTS or MTS, is a build-ahead production system in which production plans are based on sales forecasts or historical demand and goods are produced in advanced and stored in warehouses before they are sold hence, the supply is available before receipt of a customer order.

Build to Stock or Make to Stock are appropriate solutions for low configured products assembled massively.

Hammers, for example, are products that call for a Make to Stock manufacturing system.

- Build to Order or Make to Order, abbreviated as BTO or MTO is an order fulfillment strategy characterized for the end product not being built until a confirmed order is received. This method calls for much customized products where particular conditions need to be addressed to fulfill customer’s indications. However the level of sophistication is high, it does not require as much design lead time as in ETO.

This system is considered optimum for highly configured products like computers, bicycles or automobiles where holding inventories can prove to be very expensive.

Large utility transformers will be produced following the Make to Order approach.

- Assemble to Order also known as ATO is a hybrid manufacture strategy where parts and subassemblies are produced massively as in the Build to Stock strategy, but the assembly of the final product is delayed until an order in received.

 Personal computers are the most common example to illustrate the Assemble to Order manufacturing system.

- Engineer to Order (ETO) is a manufacturing process defined by the total customization of the product according to the final customer requirements. Obviously, as in MTO, in the ETO system, the product is not built until an order is received. This approach is only suitable for specific and very rare items and can be seen as the most extreme evolution of the MTO system.

 Energy plants that need very specific design requirements is an example of an Engineer to Order manufacturing system.

- Mass Customization The product is made in many different configurations mainly from stock components, but is quickly assembled in high volume.

 Finally bicycles are produced nowadays massively but with a certain level of customization.

 The choice of the most suitable manufacture system will be influenced by the following:

- Lead time expectations: Customers will have certain expectations with respect to delivery time; therefore the manufacture process should accommodate the customer delivery time frame.

- Product volume and variety: Primarily volume but also variety will play a significant role in the choice of the manufacturing environment.

- Product life cycle: Depending on the type of product and its life cycle different manufacturing approaches should be considered, and the system chosen might chance as the product evolves through its life cycle.

- The degree of customization: The degree of product design required will have an effect on the lead time and eventually on the manufacture system