As we move into the new millennium, a key issue on most managers’ minds is what the supply chain will look like in the year 200X.
Integrated Make-to-Stock. Traditional supply chains, also called make-to-stock models, are particularly useful in mass-production environment. How does this work? Production quantities and dates are provided by the forecast, with no concern for individual customer requirements. Instead, customer receive shipments from the finished goods inventory. This means that the irregular demand flow that would result from various customer orders can be smoothed, produced, and warehoused downstream.
Examples of make-to-stock users include Coca-Cola, Proctor & Gamble, and General Mills’ cereal production. Typically, the resource utilization with make-to-stock models was modest due to inefficient parts purchasing, product overdesign, poor plant utilization, lengthy inventory pipelines, and a lack of streamlined logistics. Companies are now attempting to mitigate the problems associated with make-to-stock by using information to better coordinate the end-to-end chain.