Make to Stock vs. Make to Order: Advantages and Disadvantages
What is make to order strategy with example?
A make to order strategy is when a company manufactures a product only after it has received an order from a customer. This is in contrast to a make to stock strategy, where products are manufactured in advance and stored in inventory until a customer orders them.
There are several advantages to a make to order strategy. First, it allows a company to tailor its products to the specific needs of its customers, which can lead to higher levels of customer satisfaction. Second, it can help a company to avoid the costs associated with storing inventory, which can be significant. Finally, it can allow a company to respond quickly to changes in customer demand, as there is no need to wait for inventory to be depleted before making new products.
There are some disadvantages to a make to order strategy as well. First, it can lead to longer lead times for customers, as the company needs to wait for an order before it can start manufacturing the product. Second, it can be more difficult to forecast demand, as the company cannot rely on past sales of inventory to predict future customer demand. Finally, it can be more expensive to operate, as the company needs to have the necessary manufacturing capacity in place to meet customer orders.
What is MTS in stock market?
MTS is the ticker symbol for the common stock of MTS Systems Corporation, a publicly traded company listed on the Nasdaq Global Select Market. MTS Systems is a global supplier of high-performance test systems and position sensing solutions. The company's products are used in a variety of industries, including automotive, aerospace, defense, energy, and consumer electronics.
What do you understand by the terms make-to-order & make-to-stock?
Make-to-Order
Make-to-order (MTO) is a manufacturing process in which products are not manufactured until a customer order is received. In make-to-order manufacturing, the customer order triggers the manufacturing process.
Make-to-Stock
Make-to-stock (MTS) is a manufacturing process in which products are manufactured in advance of customer orders. In make-to-stock manufacturing, customer orders are fulfilled from stock.
What is MTO and CTO?
MTO and CTO stand for "manufacturing to order" and "configure to order", respectively. In a manufacturing to order (MTO) system, products are only manufactured after a customer order has been received. In contrast, in a configure to order (CTO) system, products are manufactured in advance and then customized to the customer's specifications.
The main difference between MTO and CTO is the time at which customer orders are received. In an MTO system, customer orders are received before production begins, while in a CTO system, customer orders are received after production has already begun. This difference can impact a number of factors, including lead time, inventory levels, and production costs.
MTO systems are typically used when products are highly customized and require a lot of lead time. This is because MTO systems allow for a greater degree of customization than CTO systems. In contrast, CTO systems are typically used when products are less customized and have shorter lead times. This is because CTO systems are more efficient in terms of production than MTO systems.
What is make to stock process in SAP? The make to stock process in SAP is a manufacturing process in which finished products are produced and stored in stock before customer orders are received. This process is typically used for products with long lead times or when customer demand is difficult to predict.