Case Study Table of Contents References 10 What is it meant by “build to order” and how does it differ from more traditional approaches to the car business? Answer 1: - Build to Order often referred to as ‘Make to Order’ is defined as a strategy of production, where the products are only manufactured when the order is fully confirmed…
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Some of the products which fall into this category are computer servers, automobile products and aircraft. In the context of automotive products or car industry, Build to Order (BTO) is considered as an approach, where the production takes place when a confirmed and validated order is received from the end consumer. The end customer refers to the individual who places an order for the product to the company. However it must not take into account any orders by the national sales companies, point of sales or dealers, bulk orders, original equipment manufacturer, or any other middle man in the entire supply chain. It should be also noted that BTO does not take into consideration any kind of production or manufacturing of the orders which are in the pipeline. As the pipeline approach embraces further sophistication and is often termed as build to stock (BTS) system or build to forecast (BTF) strategy towards production. Traditionally, there were several manufacturing approaches. However the most common form was the lean production method. Lean manufacturing or production is considered to be one of the traditional approaches of production. ...
tant aspects of this production strategy are as follows: - Just in time production (JIT) Kaizen (Continuous improvement) Cell production Zero defect production and Total Quality Management (TQM). Time based management Simultaneous engineering Quality Circles (Cutcher-Gershenfeld et al., 1998, p.75) There are many differences between the two approaches of car production. The differences come in the form of marketing, logistics, production, customer relationship, managing uncertainty, suppliers and also finished goods inventory. For example in the Build to Order approach the production system focuses on the supply chain flexibility and customer demand. On the other hand, the traditional approaches mainly focuses on stable and level schedules, and also concentrates on fixed order line-up. Some of the other differences between the traditional approaches and build to order approach are presented in a tabular form below. Table 1 – Differences between traditional approaches and build to order supply chains Factor Build to order approach Traditional approach Suppliers Responsive Lead times are long Logistics Non differentiated and mass approach Customized, reliable and fast approach Marketing Pull the customers Push the customers (Source: Deloitte, 2008) To what extent is the Product Life Cycle framework useful to explain the emergence of “build to order” manufacturing? Answer 2: - In the last few decades, there has been phenomenal growth and investment in the area of product life cycle management. Companies are exploring the opportunities to fully harness their assets and streamlining product lifecycle processes like never before. The theory of product life cycle was developed in the early 1950s. The primary rationale behind the development of this theory is to uncover
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