Make to Stock vs. Make to Order: Why One is on the Rise (and What Manufacturers Need to Know)

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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.

 

Will COVID-19 Change the Future of Food Plant Design?

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Will COVID-19 Change the Future of Food Plant Design?

The COVID-19 pandemic brought a number of immediate and temporary changes to daily life: reduced occupancy limits, partitions, social distancing, one-way stairwells and more.

While these short-term adaptations were necessary to mitigate the spread of the virus, will the pandemic change the way facilities are built in the long term? The likely answer is, not dramatically.

However, it is shaping the way we think about designing these spaces. Let’s look at some examples of trends we may see in the post-COVID era.

 

Remote Work Solutions We’re Making Routine Even After the Pandemic

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Remote Work Solutions We're Making Routine Even After the Pandemic

The COVID-19 pandemic forced many companies to improvise as the sudden shift to remote working disrupted “business as usual” for a lot of employees. At Stellar, we had emergency plans in place to allow for an easy shift to remote work — and it was so successful that the company adopted a full-time work-from-home model for the majority of its workforce.

With restrictions easing and vaccines more readily available, we’re slowly returning to some sense of normalcy. And while there are plenty of things we won’t miss about pandemic life, there are tools and strategies that flourished over the past year that yielded more efficient, predictable and accurate project results for our clients. Let’s look at a few that are here to stay:

 

4 Ways Site Location Can Affect Construction Costs

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Building anything right now can be daunting and expensive, much less a large industrial facility. In the wake of the COVID-19 pandemic, the cost of construction materials has skyrocketed, labor is scarce and demand is surging. But that doesn’t mean the food supply chain can stop.

Food manufacturers and distributors still have customers to serve — and, for some, that still means investing in a new facility. At a time when construction costs are high, a company might make up for it in savings by reconsidering where the facility is built.

 

4 Tips to Get Your New Process Facility ‘Off the Ground’

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4 Tips to Get Your New Process Facility 'Off the Ground'

Facilities that support process operations produce some of the most expensive and complex buildings in the world. And they run the gamut: “Process operations” can range from baking desserts such as cakes to processing raw meat for grocery operations, to manufacturing parts and components for U.S. Navy submarines. 

So what do facilities across such diverse markets have in common besides being founded on their process? For one, the costly and painful struggle of getting the project started. Many times, important early stages are executed out-of-order or even too late. Let’s look at four recommendations that may seem obvious, but if executed properly, will take some of the pain out of beginning your next process facility.

 

How Blockchain, IIoT and AI Make the Global Supply Chain More Resilient

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How Blockchain, IIoT and AI Make the Global Supply Chain More Resilient

The Suez Canal blockage in March 2021 pointed out a major pinch point — for lack of a better term — within the global supply chain. One ship getting blown off course during a predictable sandstorm halted 12% of global trade — an estimated $9.6 billion per day. While the Ever Given was freed after six days, the ripple effects of the event will be felt for months due to the thousands of ships delayed in those six days.

Witnessing the magnitude of what a single ship mishap can do to interrupt global trade makes it obvious that safeguards need to be put in place to prevent such events in the future. If an accident put a stop to 12% of global trade, what kind of damage could an intentional act inflict?

 

What Is Your Maintenance Program (or Lack of One) Costing You?

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What Is Your Maintenance Program (or Lack of One) Costing You?

For many manufacturers — especially in the food and beverage space — the COVID-19 pandemic has ushered in new challenges and increased demand, all at the same time. This has many corporate leaders under the gun and pushing production to the max in order to keep their pipeline filled. To meet this demand, many are working overtime, plants are reluctant to shut any lines down and smaller maintenance jobs have dropped lower on the priority list.

But, none of that matters if you’re rushing in the wrong direction. Ignoring maintenance or only fixing things when they fail (a reactive approach), has long-term consequences. The continual deferment of maintenance will ultimately result in failure.

 

Automated Storage and Retrieval Systems: Advantages and Considerations for ASRS Warehouses

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Automated Storage and Retrieval Systems: Advantages and Considerations for ASRS Warehouses

E-commerce retail is at an all-time high, according to the U.S. Census Bureau’s latest quarterly report. Total e-commerce sales for 2020 were estimated at $791.7 billion, an increase of 32.4% (±1.8%) from 2019.

While this isn’t exactly unexpected, the COVID-19 pandemic has only sped up e-commerce trends that were already taking place. And that means distribution warehouses — and the workers and technology that power them — are in the spotlight.

This has more companies considering how to best capitalize on this demand, and automated robotics are taking the storage and distribution game to new heights — literally.

 

Flexible Food Manufacturing: 5 ‘Blind Spots’ That Can Hurt Your Ability to Adapt to the Market

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Flexible Food Manufacturing: 5 ‘Blind Spots’ That Can Hurt Your Ability to Adapt to the Market

You could argue that flexibility in food manufacturing has never been more important: new generations of consumers are craving more variety, the internet is reshaping how food is packaged and purchased and a global pandemic just reminded us all of how crucial (and fragile) the supply chain can be.

With some speculating that history could (at least somewhat) repeat itself for another post-pandemic “Roaring Twenties,” how can food and beverage companies prepare for sustainable success in the decade ahead?

 

Food Traceability: 5 Business Benefits When Switching from Manual to Digital Recordkeeping

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Food Traceability: 5 Business Benefits When Switching from Manual to Digital Recordkeeping

In a recent post, I summarized the new traceability requirements recommended by the U.S. Food and Drug Administration (FDA). The proposed rule would require additional recordkeeping for those who manufacture, process, pack or store foods included on the FDA’s new Food Traceability List. 

The thought of new government regulations can often elicit groans from manufacturers, but rather than view this as another hoop to jump through, food and beverage companies should take a long view: It’s really an opportunity to improve product quality, boost efficiency and reduce manufacturing costs.