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Make to Stock

Make to Stock

Thinking of production scheme from the standpoint of order time, the system where a production is performed before receiving an order is usually called "Make to Stock". In this method, the customer needs are grasped in advance and the specifications are determined, based on which engineering, purchasing, and manufacturing are performed in turn, and after the production is over, the finished items are allocated to each order. Once engineering is performed, purchasing and manufacturing processes are repeatedly performed until the product lifetime is over. Thus this type of production is also called Repeat Production.
In the Make to Stock, there is no direct relationship between order receipt and production, and thus the production plan is prepared according to the quantity set based on the demand forecast. In addition there is an intermediate step between demand and production, that is, the product's inventory, and therefore in a factory it is possible to equalize cycle variation or seasonal variation, and perform stable production.


Related term: Production System
Antonyms: Make to Order

Reference:JIT Business Research Mr. Hirano Hiroyuki

Make to Order | Production Planning | Make to Stock Plan (in a broad sense)