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.
