Q5 What are the difference between Make-to-order and make-to-stock systems, and what type of manufacturing systems are needed for both of thern
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5) The make-to-order and make-to-stock systems are identical at first glance. The biggest distinction is that in make-to-order production orders are related to one or more sales orders, while in make-to-stock production orders are the result of production preparation, which in turn is based on a sales estimate. Production preparation and buying can be very hectic in a make-to-order environment causing inefficiency and more wastage. This risk can be minimised by merging production orders as far as possible and optimizing the production process to its full potential. While the benefit of producing for stock is that, in most situations, you are able to distribute production uniformly over a given period of time, eliminating most of the hectic scenes that frequently define make-to-order production. There is much space for a highly effective and efficient manner of production.
Hybrid type of manufacturing systems are needed for both of them in which both MTO and MTS could be used hand in hand with each other. Such manufacturing systems are already in practice in food industry and supply chains.
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