Advantages and disadvantages of order production (MTO) and inventory production (MTS)

Inventory Production (MTS):

1. Advantages:

In the type of make to stock strategy, customers basically have no suggestions or requirements for determining the final product specifications, and there is little investment in MTS.

2. Disadvantages:

The batch size of products in make to stock is not as large as that of typical repeated products. Usually, the BOM of this kind of production system has only one layer, and the production batch is standardized, so a standardized cost can be calculated. The actual cost can be compared with the standard cost, and the comparison result can be used for production management.

manufacturing by order (MTO)

Advantages:

(1) Sales orders are the source of demand, and related documents can be easily tracked according to the order number in the whole process of order execution, such as planning, production and purchase, so as to check the status of related documents and make clear the execution status of orders; And you can use Gantt chart and other methods for very intuitive display.

(2) It provides price management of sales orders, supports independent authorization of price fields (people without authority cannot see the unit price and amount), and can control customers' credit.

2. Disadvantages:

In order-oriented enterprises, the confirmation of customer orders is very important. It directly affects the number of orders that enterprises can obtain, and then affects the business performance of enterprises. At present, the quality of products has been regarded as the most basic premise, and the main contents of customer order confirmation include delivery, price and satisfaction of customer's individual needs.

extended information

MTS manager competency evaluation system is a comprehensive online management system for testing and evaluating the competency of various managers such as enterprises, institutions and government agencies.

MTS system can comprehensively analyze and diagnose the competence level, ability characteristics and quality of the subjects based on the needs of organizations and posts, and it is a decision-making assistant tool for all types of organizations to recruit, select, cultivate, develop, evaluate and appoint managers at all levels.

MTO ⅱ is a new term derived from MTO(Make To Order), also known as make to order, and it is the general name of three production organization modes (also known as production mode): MTO, ATO and ETO.

MTO ⅱ, which emphasizes the production according to the order matching with the design and assembly, is customer-oriented, with orders first and products later, and is divided into ETO, MTO and ATO according to the standardization degree of parts, components and products and the focus of business management.

Baidu encyclopedia -MTO

Baidu encyclopedia -MTS