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Depending on the business sector and our positioning, different pull strategies are possible.

Make To Stock (MTS)

Manufacturing to store is to produce based on a sales forecast. The products are not yet sold or ordered, but will only be used to make stock for immediate availability.

These are generally products with little diversity where demand is large and predictable (constant or seasonal). We find for example the products of consumer goods type canned, laundry…

It can also be a regulatory stock. This is the case of the pharmaceutical sector where it is necessary to guarantee a minimum of X months of stock and thus guarantee the availability.

  • Advantage : No customer waiting to get the product.
  • Disadvantage: High storage cost, possibility of stock not selling, may result in product obsolete at time of sale.

Assembly To Order (ATO)

Assemble with the order is to assemble the final product at the request of the customer. Components and subassemblies are produced based on a forecast.

This strategy allows the company to offer customizable products, including many options, while limiting inventory levels. For example, we find the automobile that allows, from a catalog of options, the customer to have a product closer to his request while limiting the cost. The manufacturer only has to store finished subsets to make the final product.

  • Advantage : customizable product, little stock. 
  • Disadvantage: requires a low final assembly lead time to respond quickly enough to the request.

Make To Order (MTO)

Produce on order  is to produce only from the moment a firm order has been placed.

This configuration fits for custom-made products. This is the case with the manufacture of custom bike frames, where all the tubes are standard, but their cuts and their assemblies can only be done at the customer’s order..

  • Advantage : limits the stock to that of raw materials.
  • Disadvantage : Stocks of raw materials need to be replenished based on order history, which must be sufficiently reliable. Need to have a lower lead time than market demand.

Engineering To Order (ETO)

Design on command is the ultimate pitch of the fired stream. We are in the most extreme case ofcustom-made , where we only design and produce according to customer demand.

We find this type of production most often in the luxury sector where we will produce unique pieces of clothing, jewelry…

Summary table

Make To Stock

Assemble To Order

Make To Order

Engineering To Order

Level of customization

0

+

++

+++

Cost of the stock

$$$

$$

$

0

Customer Availability

+++

++

+

0

Source

R. Le Moigne (2013) – Supply Chain Management

Y. Pimor, M. Fender (2013) – Logistique et supply chain

H. Stadtler, C. Kilger (2008) – Suplly Chain management and advanced planning

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