Finance And Technology

Manufacturing Strategies.

If you are working in a Manufacturing Industry, then you might be curious about the heading of this post. Let me tell you that there are the different strategies of manufacturing/production strategies which are based on the  stage at which customer is engaged with us and Nature of Production (and their combination).Have a look at these types.

Manufacturing Strategies based on stage at which customer is engaged with us – 

Manufacturing Strategies

1 – Make to Stock –  In this type, We manufacture standard items which are accepted universally. They have a standard specification hence can be produced in advance (Without any Customer Order) and kept in stock. e.g Bearings, Pendrives etc.

2 – Assemble to Order –  In this type, We can manufacture the till sub-assemblies level in advance (Without Customer Order). From these sub-assemblies, we can produce a final product as per customer order.A typical example would be computer center which sells Assembled Computers. PC with subassemblies (CPU, Processer, Monitor) of different make can be assembled as per customer requirement.

3 – Make to Order – In this scenario, We don’t know what the requirement of the customer. When the customer provides his requirement (specifications/drawing) of the product then we start the procurement and production activity. These products are customized and customer specific hence can not be produced without customer order (Unlike Make to Stock).

4 – Engineer to Order – In this type, Customer provides its requirement (based on how the product should function) from which we have to design a product and start the production. It differs from Make to order. In this case, design is done by us.In make to Order, design is provided by the customer.To understand better, Imagine government has given the order to develop a vaccine for HIV disease. In this case, the government has given a requirement to develop a product which will cure the disease and nothing else.

Watch Video for better understanding-

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Manufacturing Strategies based on Nature of Production

Discrete Manufacturing Vs Process Manufacturing-   In Discrete Manufacturing, a distinct product is produced which is measurable in a single unit. e.g. Laptop, Automobile Components, etc. On another hand in process manufacturing ,continuous or batch production is done. Generally,  this is not produced/measured in a single unit.e.g. Paint, Chemicals, Oils, etc

Discrete Manufacturing Vs Process Manufacturing

Discrete Manufacturing uses BOM (Which is generally defined for a single unit) for defining a product structure. Process Manufacturing uses Formula/Recipe which is defined generally for Batch Size.

If you see strategy used in industries,it is a combination of above two (Based on Production Nature and Customer Engagement).

  1. Make to Stock – Discrete (Bearings)
  2. Make to Stock – Process (Paint)
  3. Make to Order – Discrete (Customer Specific Discrete Customized Item) …….and so on.


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Categories: ManufacturingTechnology
Tags: Assemble to OrderDiscrete ManufacturingEngineer to OrderMake to OrderMake to StockManufacturing StrategiesProcess Manufacturing
Vilas Nagare :I am an IT professional (ERP) and Recently started Web development (Especially on Wordpress platform). I am passionate about Internet world. Also, I am Investor in Indian Stock Market in Mutual funds and Equities.

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