Make to Stock/Forecast
Products are purchased or manufactured to meet forecasts and put into stock. This is the dominant approach used today across many industries and refers to products that are built before a final purchaser has been identified, with production volume driven by historical demand information.
Assemble to Order
Products are assembled after an order is received. This approach requires that the basic parts for the product are already manufactured but not yet assembled. Once an order is received, the parts are assembled quickly and shipped to the consumer.
Make to Order
Products are manufactured after an order is received. This is the oldest style of order fulfilment and most appropriate for highly customised or low volume products. The main advantages of this approach in environments of high product variety is the ability to supply the consumer with the exact product specification required, the reduction in sales discounts and finished good inventory, as well as a reduction in stock obsolescence risk.
Process-driven
Products are manufactured using formulas or recipes. This approach is dominant in the food, beverage, chemical, pharmaceutical and biotechnology industries. Output is measured in bulk or volume and not in individual units. It is a fundamentally different way of manufacturing to approaches that use BOMs and routings.
Configure to Order
Products have some variability and features or options are selected when an order is received. It is the best approach in scenarios where mass customisations and a quick response time to order fulfilment are required. It is a hybrid of make to stock and assemble to order operations—it leverages sub-assemblies that were made to stock and assembles them after receipt of an order.
Field Repair and Service
Products made by a manufacturer, or a third-party, are repaired and or enhanced. This approach requires the creation and maintenance of inventory and the costing of that inventory is independent from production.
Engineer to Order
Large and/or complex products requiring unique engineering design, significant customisation or new materials. Since the products tend to be complex, customers engage with the company throughout the entire design and manufacturing phases to ensure their specifications are met. Each order results in a unique set of part numbers, bills of material (BOM) and routings.
Project-driven
Large and/or complex products are designed and completed using project management applications. This approach, which uses Make to Order as its foundation, relies on project management, especially in such areas as task scheduling or resource management.
Design, Supply and Install
Products are designed, supplied and/or installed often without the consumer needing to provide precise specifications. This approach is dominant in the technology industry, most commonly to describe pre-built computer "packages" in which everything needed to perform a certain task is put together by the supplier and sold as a bundle.
