Assemble-to-order is a production method where components are pre-manufactured and assembled after an order is placed, allowing for customization and reducing inventory and errors. It benefits companies that want to produce a variety of products from common parts.
Assemble to order refers to a production method in which the customer must first place an order before the item is produced. The components of the products are already manufactured, which makes this process different from the order-to-order method, where everything is manufactured after receiving an order. Companies often stock the inventory needed to manufacture the product, and once an order is placed, they have everything they need to provide the customer with what was requested. It also makes it easy for customers to customize orders because the products are not pre-made. The main benefit of this production method is that customers can quickly receive customized products to meet their needs.
Companies that want the ability to produce a large number of different products from common parts benefit most from the assemble-to-order method. They can stock common parts and sell a variety of custom products to meet customer needs. For example, a jewelry maker can stock beads and other supplies needed to make handmade jewelry, but still deliver unique jewelry using what he has in stock. A business owner can also select inventory based on the space they have to store it, and this method allows a business to store much less inventory.
A company using the assemble-to-order method does not have to face the often impossible task of anticipating all the final products a customer wants. For example, two customers might want their sheds built two different ways. The business owner has the option to build both shelters in advance, which is the manufacturing method for stock. If the same business is now faced with 100 customers who want the warehouses built 10, 20 or 30 different ways, this could pose space and efficiency issues for that business. The way to solve this is to customize each order, fitting each order to a shed as it arrives, rather than trying to anticipate various customer preferences.
Another key benefit of the assemble-to-order method is that companies can reduce errors in product delivery. For example, a company that sells computers to customers can reduce the amount of errors by choosing this method over the options method. Rather than presenting 50 different options for computers a company can choose from and then trying to reconfigure pre-built computers to match the order, the company can wait to assemble and customize the order after it is placed. This will reduce the chances of errors, which can occur more quickly with the options method.
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