Microsoft Dynamics 365 chain management | Manufacturing Strategies

As the production order progresses, each step builds toward a completed item, ready either for delivery to a customer or as input for the next stage of manufacturing.
Supply Chain Management unifies these processes, supporting all types of manufacturing strategies with a flexible, mixed-mode approach. Here’s how different strategies come into play:
Make-to-stock: This classic approach involves producing items in anticipation of future demand. This approach involves producing goods based on forecasted demand or maintaining a minimum inventory level, ensuring that items are ready and available for customers when they need them.
In Make to Stock system, Forecasting is key. Historical sales data, market trends, and seasonal patterns are used to predict the amount of product required.
Inventory Management is crucial, as products are held in stock until orders are received, allowing for quick fulfillment of customer demand.
This approach is commonly used for items with consistent, predictable demand, such as household products, electronics, or clothing basics. While Make to Stock reduces lead times for customers, it requires careful planning to avoid overproduction, which can lead to excess inventory, or underproduction, which can result in stockouts.
Make-to-order is a production strategy where items are manufactured only after a specific customer order is received. Unlike make-to-stock, where items are produced based on demand forecasts, Make to Order focuses on fulfilling individual orders, which makes it ideal for products that require customization or are costly to keep in inventory.
In a Make to Order system: Customization and Flexibility are central. Since production begins after an order is placed, the product can be tailored to specific customer requirements.