SupplyDemand Strategies

1
Supply/Demand Strategies

• Engineer-to-Order, Make-to-Order,
  Make-to-Forecast, Assemble-to-Order

2
Confusing Terminology

• Dell offering cheaper, ready-made PC
•  
• No.1 personal-computer maker Dell
  Computer, which made its name by selling
  made-to-order computers directly to customers,
  Friday took a small step away from that strategy
  by selling a ready-made PC with a much lighter
  price tag. 
• The introduction of the 599 computer,
  priced 100 below any of Dells other offerings,
  comes as PC makers slash prices to gain
  incremental business amid sluggish demand. 
• The SmartStep 100D can already be
  purchased but will be officially introduced
  Monday. The product will do battle with the
  retail offerings of Compaq Computer and Gateway,
  which unlike Dell, sell some of their computers
  in retail stores.
• from San Jose Mercury News 10/27/01

3
Supply/Demand Strategies

• Engineer-to-Order (ETO)
• Make-to-Order (MTO)
• Assemble-to-Order (ATO)
• Make-to-Forecast (MTF)
• Also called Make-to-Stock (MTS)

4
Engineer-to-Order (ETO)

• Demand lead-time includes all of the following
• Design to customer specifications
• Procurement of raw materials
• Manufacturing of components
• Assembly of product
• Delivery to customer
• Associated with Project type of operations

5
Make-to-Order (MTO)

• Demand lead-time includes
• Procurement of some materials (maybe)
• Manufacturing of components
• Assembly of product
• Delivery to customer
• Assumes design already exists
• Associated with Job type of operations

6
Make-to-Forecast (MTF)

• Demand lead-time includes
• Delivery to customer
• Assumes design, procurement of raw materials,
  assembly of product complete
• Associated with Repetitive and Continuous Flow
  types of operations

7
Assemble-to-Order (ATO)

• Demand lead-time includes the following
• Assembly of final components
• Delivery to customers
• Lower level component assemblies built per
  forecast
• Associated with hybrid manufacturers (moving
  toward Repetitive from Job)