Sales Order Scheduling – MTS

In this sample, scheduling a Make To Stock (MTS) production will be explained. Using the same sample in the previous articles, go to the item table to set parameters: set item “AX” auto-replenish flag to “Yes”, set production lot size Min/Max to 500 units.

Assu1

In the Order Table, set the current inventory of item “AX”. Use “Inventory (absolute)” as order type and input 300 as order quantity.

Assu2

Run the Reschedule button to check the output. The order requires 500 items of “A” to be able to produce 500 items of “AX”. Since we have set item “A” with 400 pcs inventory, a production order of auto-replenishment “A” is created with a quantity of 1000. Go to the Resource Gantt chart to check the output. You will see that the sales order requirement for item “AX” is 300 and its current inventory is also 300. Therefore, no more production is created. For the second sales order of 500 “AX”, 500 items of “A” are necessary. Since the 400 items of “A” were used already from the first order, manufacturing orders of 1000 pcs each are generated automatically.

Assu3

To learn more about Asprova specific to this sample demonstration, you may visit Asprova’s e-Learning videos and see 22. How to make a prototype.

 

Classifications in Manufacturing Industries Part I

Silk factory

BY PRODUCTION PROCESS

Assembly type

This is one of the most commonly used classifications. It pertains to factories where parts are assembled to make a product. This is also known as “discrete type”.

Process type

This is also one of the most commonly used classifications. It is where the product is produced from the material through a chemical change. Process type is also known as “non-discrete type”.

BY PRODUCT TYPE AND PRODUCTION VOLUME

Mass production of scant kind of products

From a factory’s point of view, this classification is efficient. This is mainly because it is easier to mass produce than to create different products.

Small volume production of diversified products

Recent trends show that mass production of scant products is slowly dropping away. This is why small volume production of varied products came to be. This is developed to meet the different needs of consumers.

BY STOCK POINT

Make-To-Order (MTO)

As discussed in the previous paragraph, consumer needs vary. So, in order to satisfy the growing needs of the populace, MTO was conceived. MTO is generally a business production strategy that allows customers to buy products that are customized to meet their specifications.

Make-To-Stock (MTS)

This is the traditional production strategy. It relies on demand forecasts that determine how much stock should be produced.

 

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!