Difference between revisions of "MTS"

Latest revision as of 02:04, 21 August 2020

Make-to-Stock is the Supply Chain Configuration Strategy which uses forecasts, planning or planning derived information to drive execution processes in lieu of customer orders. In practice this means stock is assigned to orders late in the supply chain: generally at the time of picking orders for shipment to customer orders or customer-located inventory replenishment. For inventory transactions only the Item Number is recorded*.

Make-to-Stock is one of the four Supply Chain Configuration Strategies: Make-to-Stock, Make-to-Order, Engineer-to-Order, Reverse Logistics and Circular Economics.

Use Cases

• Build-To-Forecast (BTF)
• Build-To-Stock (BTS)
• Spare parts for Maintenance, Repair and Overhaul (MRO)
• In a Retail store: Store inventory
• In Services industries: Standard offering - example pre-recorded training

Notes

Make-to-Stock is often mistaken for a process that cannot support a zero-inventory policy. This is a misconception. The example below explains how min/max replenishment can be configured to support a zero-inventory policy:

• Set min and max levels to zero and
• Set the minimum order quantity to 1 and
• Set the planning frequency to daily (or less/more if Order Cycle Time goals will allow/demand it)

The settings will result in:

1. When new orders are booked the available inventory will go negative (i.e. below the replenishment level).
2. For each product the planning processes will generate production or purchase orders to reach the target inventory (max) level (which is zero).

The effect of this configuration is that new orders generate replenishment demand in production/procurement - and customers will need to wait for the Plan, Make or Source processes to complete before the Deliver process can complete the order. This process configuration is Make-to-Stock as demand is aggregated and inventory is replenished.

Make-to-Stock depends heavily on planning information in anticipation of customer orders.

*) Some use cases require serial-, lot- or batch numbers to be recorded.

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