Make-to-Stock Process

Make-to-stock process occurs when a purchase order is issued to the manufacturing unit for storing temporarily or for a longer period as stock than against a customer order. This represents a decision-making structure to determine the appropriate product delivery for different products in a manufacturing system. The proposed approach gets the decision maker to benefit from the strategy. The process of manufacturing in make-to-stock process environment adds the value of the products through mixing, separating, forming, machining, and chemical processes. Make-to-stock products are specified to be shipped from finished goods, are completed prior to the receipt of the customer order, and generally produced in according to the sales.

Factors of Make-to-Stock Process:

One of the main factors involved during manufacturing which reduces the lead times to the customers. Since the clients are not desired to wait for their requirements until the manufacturing process are driven to anticipate their demand. The manufacturer needs to be ready in stock when a client demands in order. This leads to reduce in orders. Most companies aims their future demands based upon the historical client orders. Moreover, a consumer requirement will be varied according to the each member of the chain who observes the pattern of customers and which turns into a set of demands on its suppliers. Make sure for the accurate and collaborative demand forecasting. By providing business partner visibility into stock and by collaborating on a single shared forecast of customer demand,  can positively impact a set of key business to create a value across partners.

The manufacturer tries to satisfy the customer’s requirements and then the goods are forecasted. He keeps track of the material in stock either in the manufacturing plant or according to his distribution centers in the chain. This approach would help to keep goods closest to the location at which he is confident about the demand and also reduces time to deliver it. The interface with the Process Control System (PCS) helps to transfer the process parameters from R/3 to PCS and other way is a unique feature to the process. It helps to monitor the process performance and check it.

Benefit of Make-to-stock Process:

The primary benefit of make-to-stock process is when a customer has several options to acquiring the product. In such case, the customer views that there is a delay in acquiring material from one supplier and he immediately contacts another supplier. This process makes the manufacturer to keep the material ready and satisfy the customer requirements instantly. This leads to reduce in orders and lead times.

Questions:

• Explain about Make-to-stock process.
• What are the benefits of Make-to-stock process?