Build-to-Order
Build -to-order (german build to order for " production to order ", abbreviated as BTO, rarely also built to order for " built to order " ) or make- to-order (MTO ) is a strategic and operational approach of companies. A product must be made only after the customer's order. The counterpart is the stock production (german build to stock (BTS ) ).
In practice, one often encounters a combination of bearing manufacturing and contract manufacturing. So in the automotive industry, both vehicles are manufactured in stock, standing in Händer and can be taken immediately, including vehicles used exclusively to customer requirements, ie are manufactured according to the particular configuration of the client. Here, the customer must take a certain delivery time in Purchase, before he can take over ' his ' vehicle.
For example, offer some computer manufacturers (eg, barebones ) to basic models that can, modular design according to individual desire with different processors, hard drives, memory chips, disk drives, graphics cards provide, inter alia, the customer then. The final product is thus defined by the customer in the details and made only after order is placed in the desired configuration.
The suppliers of the company in keeping at the components and supply parts usually until they are needed. The need is called for on the specific order of a customer. The supplier thus requires a distribution center in order to flexibly and quickly ( eg, within an hour ) out of the commodity production of the undertaking. For demand forecasting between business and supplier need to be replaced and levied because the supplier has an obligation to coordinate its planning and storage.
Benefits
Advantages of BTO - productions, in addition to the fast flow of funds involved:
- For manufacturers direct customer contact and precise knowledge actually needed products
- Waiver of middlemen ( customer ordered directly from the manufacturer ), higher value-added
- No or low requirement whereby the storage costs are kept low to Auffüllbeständen / short residence times in the camp
- No price due to slow-moving production as with just mass production possible
- Rapid response to changing market conditions
- Newer fixtures ( each use the latest technology )
- Direct contact with the manufacturer (possibly online support )
Disadvantages
- High fixed costs due to idle capacity
- Fluctuating capacity utilization
- Optimal order quantity or lot size may be difficult to determine
- High procurement costs, as necessary, scale effects can not be used
- Long delivery times to the customer, as the product will not be kept in stock
Application and dissemination
In many industries such as automotive, electronics and furniture industry, the trend has in recent years strengthened to manufacture as many products to customer order, not only in order to reduce storage costs, but also to reduce the risk to an made " to remain seated ." Such stock products can be sold then only by high discounts and cheap financing, which reduces the profit accordingly. An example of this is the financial and automotive crisis 2008/2009 in the U.S., where the American manufacturers have continued to be produced initially, although the sale was diminishing. Another reason lies in the proliferation of variants and the desire of the customer, according to an individual product, as can be seen in the automotive industry. To keep under control the cost of attempting the product the Customer ordered variant as late as possible, ie, producing in the pre- and final assembly of prefabricated parts or assemblies at the end of the production chain.