Something about Supply Chain Management Operations Strategy

Following are Supply chain Management operations Strategies

Make to stock is the best strategy for standardized products that sell in high volume. Larger production batches keep manufacturing costs down, and having these products in inventory means that customer demand can be met quickly.

Make to order is the preferred strategy for customized products or products with infrequent demand. Companies following this strategy produce a shippable product only with a customer order in hand. This keeps inventory levels low while allowing for a wide range of product options.

Configure to order is a hybrid strategy in which a product is partially completed to a generic level and then finished when an order is received. This is the preferred strategy when there are many variations of the end product and you want to achieve low finished-goods inventory and shorter customer lead times than make to order can deliver.

Engineer to order, which shares many of the characteristics of make to order, is used in industries where complex products and services are created to unique customer specifications

Strategy When to Choose This Strategy Benefits
Make to stock For standardized products selling in high volume Low manufacturing costs; meeting customer demands quickly
Configure to order For products requiring many variations Customization; reduced inventory; improved service levels
Make to order For customized products or products with infrequent demand Low inventory levels; wide range of product options; simplified planning
Engineer to order For complex products that meet unique customer needs Enables response to specific customer requirements

Now days I am reading a book “STRATEGIC SUPPLY CHAIN MANAGEMENT “ written by SHOSHANAH COHEN & JOSEPH ROUSSEL above is extract from that