Make to Stock vs. Make to Order: Why One is on the Rise (and What Manufacturers Need to Know)
Historically, most food and beverage manufacturers have used some combination of production strategies to develop their products, but recent supply chain disruptions and consumers’ desire for variety are forcing many to rethink their approach.
Make to stock (MTS) is a traditional “build-ahead” production strategy in which manufacturing plans are based upon sales forecasts and/or historical demand. A company using this approach would estimate how many orders its products could generate, and then supply enough stock to meet those orders.
Make to order (MTO), on the other hand, is a production approach in which products are not made until a confirmed order is received. This typically allows consumers to purchase products customized to their specifications.
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