Dell Computer Make to Order (MTO), Make to Stock (MTS) & Assemble to Order (ATO) - Assignment Example

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This research will begin with the statement that the Make to Order process involves a decision in which services and goods are produced and delivered in small volumes. The goods and services are made solely for customer satisfaction and needs…
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Dell Computer Make to Order (MTO), Make to Stock (MTS) & Assemble to Order (ATO)
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Dell Company Mae to Order (MTO), Make to Stock (MTS) & Assemble to Order (ATO)
Dell Company
The Make to Order process involves a decision in which services and goods are produced and delivered in small volumes. The goods and services are made solely for customer satisfaction and needs. The main thing about MTO is that production begins when a customer makes an order (Williams, 2013). This process has a number of advantages for customers. Dell Company can use this process to fulfill customer specification for its customers. It enables customers to have custom-made goods. The process maintains quality and the products can be personalized during manufacturing and delivery that creates value for customers. This process has no finished goods inventory. The make to order has a disadvantage since it has intermittent production
Dell Company can benefit from MTO process due to reduced inventory space and can customize their products. From a tax, related standpoint Dell Company may benefit from the process. In terms of customization, Dell Company can customize their products to materials, size and color .The Company may benefit economically from the process since assembled goods must have more warehouse space. Delaying assembly until a customer makes an order reduces labor cost for the company before payment. However, the company may experience delays since products take longer to produce and deliver. Customers may opt to make orders from other companies that offer quicker deliver of products.
Assemble to Order is a process that involves making part and sub assembling the products. The process is completed when a customer makes an order. It is a business strategy in production that produces quickly and customized in certain ways. It requires that basic parts are manufactured but not assembled. When an order is placed, the parts are assembled and sent to the recipient. The process has its own advantages in the sense that it has fewer inventories and the service is faster. Its main disadvantage for Dell Company is that it has WIP inventory (Lussier, 2012).
This process is appropriate for a computer industry Dell company can benefit from this when large numbers of sub-assemblies are put together. For example assembling the motherboard, video cards, fans, and battery power are put in one location and the final assembly of the laptop is made easier when an order is made. It enables Dell Company to push inventory back that makes it possible to receive payments for the hardware before other parts are paid for.
The Make to Stock strategy process matches production and customer demands forecast. It determines how much stock should be produced. Dell is using the Make to Stock pull based strategies that minimizes inventory and responses are maximized. Dell in using MTS is adding a third supply chain adding to the existing ones for MTO computers and service parts in the company (Proud, 2007). The only problem with this strategy is that the company will use a lot of capital promoting this strategy. This process is advantageous for Dell Company due to accurate predictions of customer demands that create profits for the business. The main disadvantage for Dell Company in using MTS is that it relies mostly on accuracy of demand forecasts. If there are any inaccurate forecasts then it may lead to losses that are due to excessive inventory.
If Dell Company combines all business strategies in the manufacturing floor then it will use a lot of capital to facilitate all the procedures that come with every process. This means that if the strategies fail then the company will lose many of its profits and suffer loss. It may lose customers who do not view customization of computers as crucial. Customers require fast delivery of goods and services and therefore combining the process may create a mix up since they follow different strategies in production and delivery.
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Lussier, R. N. (2012). Management fundamentals: Concepts, applications, skill development. Mason, Ohio: South-Western.
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Proud, J. F. (2007). Master scheduling: A practical guide to competitive manufacturing. Hoboken, N.J: John Wiley & Sons.
Williams, C. (2013). Management. Mason, OH: South-Western Cengage Learning.
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