Sales Order Scheduling – MTO

In this sample, Make To Order (MTO) and sales orders will be explained with an example of registering a sale order. In the Order table, register two sale orders of item “AX”. Set up the due date, order quantity and priority for both orders.

Assu1

Then, go to the Item table and set the Auto-replenish flag of item “AX” to “Yes (one-to-one production)”.
This means that replenishments orders will be generated one-to-one from the base order, regardless of the production lot size and inventory of the item. Set up the same Auto-replenish flag for item “A.

Assu2
Looking at the Graphical master, item “A” is produced through “Cut”, “Press” and “Inspection” processes and then item “A” is assembled with item “X” to produce item “AX”.

Assu3

Running the Reschedule button, the automatic replenishment is done by four manufacturing orders in the Order table. The “AX” items will be produced in two quantities: 300 and 500 according to the sale orders. The “A” items will also be produced in 300 and 500 according to the “AX” related orders.

Assu4
Looking at the Resource Gantt chart, as what is seen in the Graphical master,  item “A” is produced through “Cut”, “Press” and “Inspection” processes and then item “AX” produced through “Assembly” process. Sale orders of 300 and 500 are completed through backward scheduling.

Assu5

To learn more about Asprova specific to this sample demonstration, you may visit Asprova’s e-Learning videos at http://lib.asprova.com/ (see 22. How to make a prototype).

 

Push and Pull Manufacturing: A brief comparison

tug-of-warDifferentiating Push type and Pull type manufacturing is simple: Push type refers to Make-to-Stock (MTS), where production is NOT BASED on actual demand; on the other hand, Pull type refers to Make-to-Order (MTO), where production is BASED on actual demand.

Here’s another way of saying it:

MTS – A manufacturer producing items before orders are received. Now, you might be wondering where MTS manufacturers base the number of products that they produce over time. This traditional production strategy looks at the demand forecasts generated from data that they gathered. These will then be synchronized to the quantity of items to be made. The key to this type of manufacturing is to be as accurate as possible in making forecasts.

MTO – A manufacturer producing items after orders are received.

As you might have derived from the facts above, MTO manufacturers move right after an order is received. The usual case in this type of production strategy is that each order is unique—giving producers a hard time making them. The processes for every product, of course, vary from one another and this makes scheduling quite a handful.

The downside

In MTS, the biggest disadvantage falls into the forecasts itself. Here, inaccuracy will definitely result to losses producing high or excessive inventory ratings—where there are more products in the real demand and even stock-outs—when there would be a shortage of produced items when the demand is high.

In MTO, there are also many disadvantages and one of them is shortening lead time. If the company accepts many orders without having the ability to schedule them right, it will result to aggravating the consumers who, in that case, might be receiving their orders late or not receiving their orders at all. If the company refuses to accept orders because of certain issues, this results in loss of profit.

The Solution

In this blog site of Asprova, we can see a couple of examples regarding MTS and MTO. The article about Make-to-Stock clearly states that by using the Advanced Planning and Scheduling Software, a vibration-proofing manufacturer achieved great results. In short, using a production scheduler is the biggest factor that led to more accurate forecasts.

Also, in another article focusing on MTO manufacturing, the solution was the same: using a production scheduler that can cope with the flexibility needed in MTO. This enabled them to cut-off late deliveries in half.

To wrap this up, be it Pull or Push, there is a simple solution: Join the Winners!

What is the Importance of Scheduling in MTO Manufacturing?

MTO Manufacturing

GammaIn the case of a Mexico-based Make-to-Order (MTO) company, production only starts when the order is received. Each customer order is unique, requiring the really intense coordination of every single activity, from paper purchase to artwork and plate preparation to machine make-readies. There are many restrictions and variants in MTO. Also, there’s the problem of how to deal with shortening lead time.

Without a very flexible and capable tool for scheduling, the operators, in this MTO Company, will only be processing orders chaotically, especially on times when there are tons of orders. Sometimes, the operators might be forced to refuse some orders and would be unsure of the delivery time. This will also prove to be a hassle if the customer cancels the order. This company experienced these ordeals before they met Asprova.

After implementing Asprova, positive changes become apparent. According to case study 12 of Asprova, overall equipment effectiveness (OEE) in the company increased by 80% after using the scheduling tool for a while.

There were other benefits like the late delivery which was reduced by 50% and WIP (work-in-progress) which was cut by 66%, but more importantly, the company was able to utilize their assets better, all thanks to Asprova.