Materials flow control in hybrid make-to-stock/make-to-order manufacturing

Abstract

Today’s company competiveness is favoured by product customisation and fast delivery. A strategy to meet this challenge is to manufacture standard items to stock for product customisation. This configures a hybrid environment of make-to-stock and make-to-order. To explore the advantages of this requires good understanding of production control. Thus, we study production under hybrid MTS-MTO, organising the system in two stages. The 1st manufactures items to inventory, which are then customised in the 2nd. We analyse how the percentage of tardy orders is affected by the inventory of items required to achieve a given fill rate. The impact of two mechanisms for releasing orders to both stages is also analysed. Results of a simulation study indicate that most of the reduction on the percentage of tardy orders is achieved by a moderate increase in the stock level of semi-finished products. Moreover the percentage of tardy orders decreases if suitable controlled release of orders is exerted.