Make-to-Order and Assemble-to-Order Manufacturing Process Flow with RTLS
Modern manufacturing processes are highly advanced and optimized for efficiency. Methodologies, technologies and even physical setups that can deliver an ounce of additional savings or shave costs just a bit can scale up to a massive impact on the bottom line.
Given the complexity of the processes involved, it’s no surprise that digital tools for monitoring, synchronizing and managing everything have become the driving force of many efficiencies in today’s industrial and manufacturing sectors. With more orders, a busier factory floor and more crowded production lines, industry has come to rely on digital insights and management methods to ensure smooth operation.
Meeting demand while maintaining lean operations requires a high level of optimization. Avoiding overstock, filling orders on time and maintaining cash flow is a delicate balancing act that has to be well orchestrated. Obeying the just-in-time laws of production allows manufacturers to walk the line between having cash tied up in inventory and being able to quickly respond to market forces and orders.
When production isn’t precisely matched to orders and demand, the result is excess stock, overcrowded warehousing and cash tied up in inventory. One way to optimize production planning is transitioning to a demand driven strategy.
MTO and ATO Manufacturing
First, a quick overview.
Two of the most commonly-used manufacturing philosophies are Make to Order (MTO) and Assemble to Order (ATO), with the strategy used determined by the nature of the market involved. Each strategy allows for agile responses to managing order flows in different manufacturing contexts.
Make to Order manufacturing, as the name suggests, activates when an order is received. Since work is done in response to an order, it’s labeled as a “pull” strategy. MTO works well on low-quantity orders and goods that are not mass-produced. Goods made under MTO methodologies are typically high-margin and high-cost. Multiple stages, specialists and contractors may be involved. That sofa that you ordered to fit the exact dimensions of your living room with the design that you picked from a huge catalog and you had to wait six weeks for? That’s MTO manufacturing.
Assemble to Order is essentially the same idea as MTO but simplified. It applies to goods that only need to be assembled for the purposes of shipping to the customer, without the need for specialized work processes or custom additions.
Make to Stock is at the other end of the scale. Now we’re talking about goods that are regularly sold at high volume and lower cost and margin. These are goods that are shipped and bought in bulk. This is a “push” strategy since it’s focused on keeping the supply chain well stocked. Basically anything you pick up at the supermarket is a product of MTS manufacturing.
No matter which manufacturing strategy applies, there is an element of process flow management involved. For MTO and ATO, the process reacts to an order. Component availability may or may not align with order receipt, causing lead time issues and necessitating communication with vendors. On the other hand, they provide the required flexibility to supply goods that do not have a steady and predictable demand or need a significant degree of customization.
For Make to Stock production, steady demand and orders are assumed and so built into a production schedule. This requires a high degree of synchronization with warehousing and inventory. Although the continuity of orders allows for a strong degree of stability, the integration of materials and processes still demands precise orchestration to avoid backups, ensure new orders are filled on time and support the smooth movement of finished goods out the door. An advantage to MTS production is the ability to buy needed materials and components in large volumes based on the expectation of continued and steady orders.
Order Flow Management
Whatever method is used, digital insights can help to ensure that orders are completed and delivered on time and optimize each step in the production process, from order intake to shipping. These insights, powered RTLS (Real Time Location Systems) have become an integral part of order flow management in an age of highly complex manufacturing.
Order flow management has become critical to modern industry. Tools for managing the variables involved—like costs, orders, inventory, lead time, scheduling and planning—are needed to optimize production, minimize costs and maintain smooth factory operations.
With beacon-based RTLS, manufacturers get real-time visibility into order status, inventory levels, progress through production lines and more. The benefits gained exceed those delivered by ERP (Enterprise Resource Planning) and MRP (Material Requirement Planning) tools, which require manual observations and even paperwork. With platforms operating on the basis of location data, the entire process is automated, with more granular insights delivered in real time.
Order flow management can become a matter of predictable and automated convenience rather than potentially risky decisions about allocating resources.
Expedite requests and resource staffing and improve productivity with 100% visibility into order status and parts on a factory floor.
Enhance customer satisfaction and react faster with precise location and sensor information to understand the progress of your orders.
Identify the root cause of systemic problems with granular or aggregate, accurate data on cycle time, time taken in different stages of production and the trends in these metrics.
Kontakt.io offers a platform that delivers all these features in one easy-to-use tool, Simon AI. With Simon, you can track every order and its individual components through each stage in the production process, measuring progress against planned completion times. Tagging works in progress (WIP) and other production components with Bluetooth-LE tags provides constant, real-time visibility into their status and location. Unlike, for example, RFID barcodes, the Bluetooth tags are read by the system reliably and automatically without any process overhead from staff. Unlike RFID, Bluetooth tags can be read continuously, throughout the production facility and not limited to passing through certain gates for reading.
Using this constant stream of data, Simon AI then maps and records the location of the tagged items to their state or status in the production process, creating live and granular visibility into the entire order flow. Simon AI also enables users to generate notifications to staff and end customers based on changes in the state or flow of the order, which reduces time wasted between processes and enhances the customer experience. When delays happen or are likely to happen, you can get an early warning and start taking the appropriate measures earlier than you would be able to without Simon AI keeping watch on the entire process.
Finally, with its powerful analytics on order flow information collected over a period of time, Simon AI helps machinery manufacturers identify bottlenecks, delays and opportunities for improvement in the production process to continuously strive towards on-time order deliveries. Historical data can provide a simple road map to achieving the adaptations and efficiencies that can’t be seen without the insights made possible through the marriage of location data and analytical tools like Simon AI.