Assemble-to-Order

With an assemble-to-order environment, it is important to find a balance between the ability to carry inventory for short lead times and be able to minimize the costs involved in being able to do that. By considering shared components, sub-assemblies produced to stock and the end product's final assembly, the demand for product mix may be difficult to predict but it can be forecasted on a broader basis. If you were to take materials, components and sub-assemblies that are shared by final assemblies into account, the risk of obsolete inventory is reduced when there are multiple sources of demand. These lower level components are generally managed to stocking constraints and driven by forecast.

Consider the following key areas and issues:

• Inventory - final assembly not held in stock; components and sub-assemblies held in stock; items planned differently; both WIP and perpetual inventory management is critical; lower level items managed to stocking constraints and forecasts.
• Quoting & Sales - utilize established costs and rates to estimate time and materials and determine pricing; provide estimated delivery dates based on component and resource availability; establish estimate for later comparison to actual manufacturing performance; transfer quoting information to sales and production.
• Planning & Purchasing - planning for final assembly driven by sales order; manage planning on two levels; demand for final assembly is triggered by the sales order and demand for lower levels is triggered by forecasts and stocking constraints; purchase to stock; visibility to supply and demand.
• Production - Produce on time and on budget; reduce work in process; look at cost variance analysis over a time horizon instead of on an individual job basis; visibility to customer final assemblies vs. make to stock subassemblies.
• Scheduling - comparison of scheduling scenarios; no late jobs, visibility to material availability and capacity for each scheduling scenario.

The INDUSTRIOS team can help you structure the inventory correctly, establish correct minimums, manage your forecasts, define inventory activity analysis parameters and define the physical counts to ensure correct levels are maintained for raw materials and subassemblies. Delivering the final assembled item on time is easy with correct management of the raw materials and sub assemblies.

North American Pet Ron Bonner, President "The Customer Service module streamlined our entire parts and service process."