Introduction to Make-to-Order (MTO)
Make-to-Order (MTO) is a production strategy where manufacturing begins only after a customer’s order is received. Unlike Make-to-Stock (MTS), where products are manufactured based on demand forecasts and stocked, MTO focuses on customization and minimizing inventory. This approach is particularly beneficial for businesses that produce customized products or have unpredictable demand patterns.
History and Benefits of MTO
The MTO production strategy has been employed for decades, particularly in industries where customization is critical, such as aerospace, automotive, and high-end manufacturing. The main advantages of MTO include:
- Customization: Allows manufacturers to tailor products to specific customer requirements.
- Reduced Inventory Costs: Minimizes the need for large inventories, reducing storage costs and obsolescence risks.
- Flexibility: Enhances the ability to respond to unique customer demands and changes in market trends.
- Efficient Resource Utilization: Ensures that resources are used only when there is actual demand, improving overall efficiency.
About IFS
IFS (Industrial and Financial Systems) is a globally recognized enterprise software company that provides solutions for enterprise resource planning (ERP), enterprise asset management (EAM), and service management. Founded in 1983, IFS has developed a suite of applications designed to help businesses manage their operations more efficiently and effectively.
IFS’s solutions are used by organizations in a variety of industries, including manufacturing, aerospace and defense, energy and utilities, and construction and engineering. The company’s focus is on delivering user-friendly, flexible, and scalable software that can adapt to the changing needs of its customers.
IFS Cloud
IFS Cloud is the latest iteration of IFS’s comprehensive suite of enterprise applications. It combines the functionality of previous versions, including IFS Applications 10, into a unified cloud-based platform. IFS Cloud offers a wide range of features to support various business processes, from finance and human resources to supply chain management and manufacturing.
Key benefits of IFS Cloud include:
- Scalability: As a cloud-based solution, IFS Cloud can scale up or down based on the needs of the business, providing flexibility and cost-efficiency.
- Integration: IFS Cloud seamlessly integrates with other systems and technologies, enabling a cohesive IT ecosystem.
- Innovation: Regular updates and enhancements ensure that IFS Cloud users have access to the latest features and technologies.
- User Experience: The platform is designed with a focus on user experience, offering intuitive interfaces and tools that simplify complex processes.
IFS Cloud Dynamic Order Processing (DOP) Solution
The IFS Cloud Dynamic Order Processing (DOP) solution is a powerful tool designed to support make-to-order (MTO) manufacturing environments. Here are some key aspects of the IFS Cloud DOP solution:
- Direct Pegging: DOP enables direct pegging of customer orders to specific production orders. This means that each customer order is linked to its own production order, ensuring that the products are manufactured specifically for that order.
- Multi-level Pegging and Planning: The DOP solution allows for multi-level pegging and planning. This means that not only the end product but also the components and sub-assemblies are linked to the customer order. This helps in managing complex product structures and ensures that all parts are available when needed.
- Real-time Visibility and Control: DOP provides real-time visibility into the entire order processing cycle. Users can track the status of customer orders, production orders, and inventory levels. This visibility helps in identifying bottlenecks and making informed decisions.
- Automated Replenishment: The system supports automated replenishment of materials based on predefined DOP signals. This ensures that materials are ordered just in time, reducing excess inventory and minimizing waste.
- Integration with IFS Modules: IFS Cloud DOP integrates seamlessly with other modules within the IFS Cloud suite, such as procurement, production, and inventory management. This integration ensures a cohesive approach to managing supply chain and production processes.
- Configurable to Order: The DOP solution supports configuration to order (CTO) scenarios, where products are customized based on customer specifications. The system allows users to set up configuration rules and automatically generate the necessary production and procurement orders.
- Dynamic Replanning and Netting: DOP supports dynamic replanning and netting. This means that the system can automatically adjust plans based on changes in demand or supply. For example, if additional orders are received or if there are changes in delivery dates, the system can replan the production schedule accordingly.
- Gantt Chart and Visual Management: The solution includes tools for visual management, such as Gantt charts, which provide a visual representation of the production schedule. Users can see how orders are scheduled, track progress, and identify any potential delays.
- Cost Tracking and Analysis: DOP allows for detailed cost tracking and analysis. Users can monitor costs at different levels, from individual components to the entire product structure. This helps in understanding the cost implications of changes in the production schedule and making informed decisions.
- DOP Alarms and Notifications: The system generates alarms and notifications for various events, such as delays in procurement or production. These alarms help users take timely action to address issues and ensure that orders are delivered on time.
- Flexible Configuration and Customization: IFS Cloud DOP offers flexible configuration and customization options. Users can define DOP circuits, configure Kanban cards, and set up custom rules for different production scenarios.
The IFS Cloud DOP solution is designed to help businesses achieve greater efficiency and agility in their operations. By implementing make-to-order principles within the IFS Cloud platform, organizations can improve their inventory management, reduce waste, and enhance overall productivity. With its robust features and seamless integration capabilities, the IFS Cloud DOP solution is an ideal choice for companies looking to optimize their supply chain and production processes. Whether managing internal workflows or coordinating with external suppliers, IFS Cloud DOP provides the tools and flexibility needed to maintain a smooth and efficient operation.
ABOUT THE AUTHOR
With over 20 years of professional expertise in the IT software industry, including an impressive 19-year tenure in a managerial position at IFS Turkey, Göksel Sanbay brings a wealth of experience to the table. Throughout his career, he has successfully managed dozens of hands-on ERP, EAM, and ESM projects, leaving a trail of satisfied clients and successful implementations.
Notably, he has also excelled as a solution architect, leaving his mark on various reference IFS projects. His passion for innovation and driving efficiency has led him to embark on a new journey. In July 2022, he founded GUMA Business Solutions, a dynamic consulting company exclusively dedicated to crafting cutting-edge business software solutions, with a specialization in IFS Applications.
At GUMA, we thrive on challenges and aspire to take businesses to new heights through tailor-made software solutions that streamline operations, boost productivity, and empower growth