Everything about Build To Order totally explained
Build to order, often abbreviated as
BTO and sometimes referred to as
make to order (
MTO), is a
production approach where once a confirmed order for products is received, products are built. BTO is the oldest style of
order fulfillment and is the most appropriate approach used for highly customised or low-
volume products.
Overview
This approach is considered good for highly
configured products, for example computer
servers, or for products where holding inventories is very expensive, for example
aircraft.
Some firms build all their products to order while others practice
build to stock, which is also called build to forecast or BTF) . Given the widespread proliferation of products, there are a number of
manufacturers taking a combined approach, where some items are built to stock and others are built to order, which is commonly referred to as "hybrid BTO" (Holweg and Pil, 2001).
The main advantages of the BTO approach in environments of high product variety is the ability to supply the customer with the exact product specification required, the reduction costly sales discounts and finished good inventory, as well a reduction in stock obsolescence risk.
The main disadvantage of BTO is manufacturers are susceptible to market demand fluctuations leading to a reduced capacity utilization in manufacturing. Hence, to ensure an effective use of production resources, a BTO approach should be coupled with proactive demand management.
Related approaches to BTO include the Engineer-to-Order (ETO) approach, where after an order is received, a part of or the whole design is done, as well as the Assemble-to-Order (ATO). Together with the make-to-stock approach, these strategies form the spectrum of
order fulfillment strategies a firm can adopt.
Further Information
Get more info on 'Build To Order'.
|
External Link Exchanges
Do you know how hard it is to get a link from a large encyclopaedia? Well we're different and will prove it. To get a link from us just add the following HTML to your site on a relevant page:
<a href="http://build_to_order.totallyexplained.com">Build to order Totally Explained</a>
Then simply click through this link from your web page. Our crawlers will verify your link, extract the title of your web page and instantly add a link back to it. If you like you can remove the words Totally Explained and embed the link in article text.
As long as your link remains in place, we'll keep our link to you right here. Please play fair - our crawlers are watching. Your site must be closely related to this one's topic. Any kind of spamming, dubious practises or removing the link will result in your link from us being dropped and, potentially, your whole site being banned. |
