Lean Management: Stock Strategy - Essay Example

It is important to note that the make-to-order strategy assists firms to get rid of the issues associated with excessive inventory, which is very common with the traditional make-to-stock strategy. Dell Computers is an example of a corporation that employs the MTO production strategy.

The Assemble to Order (ATO) is also a business production strategy by which quick actions are taken on orders placed by customers, and these products are customizable to a certain extent. Under this production strategy, the basic parts of the products are already built but not assembled yet. Once the customer places an order, these parts are assembled quickly to deliver products that are customized to the buyer’s specifications. It is to be noted that the ATO strategy is a hybrid between the make-to-order strategy and the make-to-stock strategy.

Finally, the Make to Stock (MTS) is a traditional business strategy used by organizations to match production with consumer demand forecasts. Under this strategy, particular stock levels are maintained to meet the forecasted demand levels. This business production strategy can be efficient only if the product demand is forecasted accurately. However, inaccurate demand forecasts would end up in financial losses resulting from excessive inventory or stockouts.