Human resources slide 1

Business Production
Strategies
By Ajay Patel
 CONTENTS
Human resources slide 2
What is Business Production
Strategy?

Types Of Business Production

Strategy
Make To Stock (MTS)
Make To Order (MTO)
Engineer To Order (ETO)
Configure To Order (CTO)
Assemble To Order (ATO)
What is Business Production Strategy?
Human resources slide 8
The interface between the Sales and Production
departments is a critical one. Very often the two
departments work in silos. All strategies are at the
crossroads between demand and supply. It is a goal to be
agile and fulfill every customers wish on time and on
quantity, but it is also important to minimize waste and
enable smooth replenishment and production. Proper use
of the planning strategy helps achieving both goals.

The ultimate achievement, one that both Production and

Sales strive for, is to have the right product at the right
place in the right quantity at the right time. Planning
strategies are one of the most important drivers to achieve
exactly that.
 Types of
Human resources slide 5 Business
Production
Strategies.
- Make To Stock (MTS)
- Make To Order (MTO)
- Engineer To Order (ETO)
- Configure To Order (CTO)
- Assemble To Order (ATO)
  This scenario is used when
we have to make stocks

Human resources slide 3

irrespective of orders
because we want to supply
goods from that stock to
your customers immediately.

 Goods can be
manufactured in this field

Make to Stock
without sales orders if you
expect customer requests in

(MTS) the future.

This allows make-to-stock

strategies to support a close
relationship between
customers as your goal is to
supply goods from your
stock as soon as possible .

 Normally products are

produced on the basis of
predicted sales.
Process Flow
Human resources slide 5 Make to Stock
(MTS)
  This strategy still is for
standard products which

Human resources slide 3

have a clearly defined
specification. Other than
MTS, there is absolutely no
forecast on products which
are made to an order from a
customer.

Make to Order
 You start production after
the customer’s request

(MTO) comes in and not, like with

MTS, beforehand. When you
identify a product to be
made to order, the
availability check in the Sales
Order needs a lead time; the
time it takes to replenish or
produce the product from
soup to nuts.

Everything is made from

scratch and takes its time.
Process Flow
Human resources slide 5 Make to Order
(MTO)
 Engineer To Order is used
when complex structures are

Human resources slide 3

build. In most cases these
projects organize many tasks
and follow a long timeline to
produce large, highly
customized products to
specific customer
specifications.

Engineer to The finished product, and

Order (ETO) also many components and

subassemblies, have never
been built before and receive
brand new product codes.

Using the ETO method, a

manufacturer can meet the
exact specifications of their
customer.
Process Flow
Human resources slide 5 Engineer to
Order (ETO)
 Configure-to-order (CTO)
refers to a production

Human resources slide 3

process in which a product is
customized based on specific
customer requirements.

The customer orders the

product with certain
specifications or features,

Configure to
and the manufacturer builds
the product to match those

Order (CTO) specifications.

Configure to order (CTO)

allows for greater
customization and flexibility
in the production process.
Configure to order can also
be more complex and time-
consuming than mass
production.
Process Flow
Human resources slide 5 Configure to
Order (CTO)
 Assemble-to-order (ATO) is
a business strategy where

Human resources slide 3

products are quickly
produced from component
parts once the order is
confirmed.

Assemble-to-order is a
combination of make-to-

Assemble to
order and make-to-stock.

Order (ATO) In a typical ATO approach,

the costs of assembling the
product from its
components are negligible,
but the costs of making the
different components can be
substantial.
Process Flow
Human resources slide 5 Assemble to
Order (ATO)
 Human resources slide 10

Thank You
By Ajay Patel