Define your manufacturing strategy

As anyone knows, a company manufactures a good or a service in order to meet a customer need. Its offer is differentiated on the market by an “Order Winner” – the strong point of the company, which makes it special from the others. The “Order Winner” will influence the entire manufacturing system of the company. Indeed, if the company stands on reduced lead time, it will build a manufacturing system able to manufacture the product as quickly as possible.

Below, we will see what the different manufacturing strategies are, what their differences from each other are and what they consist of.

production

What are the main manufacturing strategies that you can adopt?

There are 4 major manufacturing strategies:

  • Engine to order,
  • Make to order,
  • Assemble to order,
  • Make to stock.

Engine to Order (ETO)

This manufacturing strategy is used for goods requiring either a very strong customization, or the manufacturing of unique pieces (Example: funicular between La Plagne and Les Arcs).
The end customer, in this type of configuration, is very involved in the entire design process, environmental constraints, but also during all steps before manufacturing.

Make to Order (MTO)

The second manufacturing strategy, “make to order”, consists in manufacturing only firm customer orders (pull-flow configuration). In this case, the company will start manufacturing only when it has the order. This manufacturing strategy requires the company to be very responsive in terms of material supply, planning change, or that it has sufficient material stocks to start manufacturing upon receipt of the order.

Assemble to Order (ATO)

The “assemble to order” manufacturing strategy is also called “delayed differentiation”. In this case, a stock of standard semi-finished products is set up. Often a last operation is done to meet the customer’s need. At each sales order, the semi-finished products are assembled or customized to meet customer demand.

Make to Stock (MTS)

The last manufacturing strategy “make to stock” consists as its name indicates in a manufacturing in order to build up a stock to sell it over the orders of customers (advanced flow). This manufacturing strategy corresponds perfectly to standard products, requiring no modification or customization before delivery. Delivery times are usually short.

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