For small DTC manufacturing companies, it’s important to deliver high-quality products on time to your customers.
However, constantly achieving both objectives of high quality and timeliness can be challenging, especially when dealing with the complexities of fulfilling customized orders.
That is where Make to Order (MTO) production planning comes into play.
MTO is a production strategy that enables companies to manufacture goods based on the customer’s specifications. It involves planning, scheduling, and executing the production process from start to finish each time a sale is made.
In this blog post, we’ll explore MTO production planning and, more importantly, how to make it work for your small manufacturing company.
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What is production planning?
Production planning is basically the process of mapping out how a product will be manufactured, including determining the necessary resources, timelines, and workflows.
It involves coordinating all aspects of production, from procurement of materials to final delivery to the customer. Effective production planning is essential for optimizing resources, reducing costs, and meeting customer demands.
Read more:The Ultimate Guide to Production Planning & Scheduling
The role of Make to Order (MTO) in production planning
Traditionally, manufacturing companies have relied on Make to Stock (MTS) production, where goods are produced and stocked in anticipation of customer demands.
MTS is cost-effective since it allows for mass production and bulk purchasing of raw materials. However, this approach can lead to overproduction, excess inventory, and wastage if the products do not sell as expected.
MTO production planning provides a more efficient alternative to MTS, especially for small manufacturing companies. With MTO, products are only manufactured once there is an order from the customer. This “just in time” approach eliminates the need to stock finished goods, reducing inventory costs and minimizing waste.
How to implement a make-to-order production planning strategy
To successfully implement Make to Order production planning in your small manufacturing company, here are some key steps to follow:
Understand Your Customers’ Needs
To incorporate MTO production planning, you need to know your customers’ requirements thoroughly. You should have a complete understanding of the product specifications, order volume, delivery deadlines, and customer expectations.
By understanding your customers’ needs in-depth, you can plan and execute the production process efficiently. You can also avoid delays, errors, and customer dissatisfaction.
Develop a Solid Production Plan
Once you understand your customers’ requirements, you can develop a production plan that best suits your business model. This plan should include raw material procurement, inventory management, production scheduling, labor allocation, quality control, and delivery logistics.
It’s important to make sure that the production plan is flexible enough to allow for any changes in customer specifications (such as customizations) or unexpected disruptions in the production process.
Additionally, the plan should consider factors such as available and appropriate stock on hand, and also your manufacturing capacity given your production team size.
Use Technology to Streamline Workflow
To ensure smooth MTO production planning, you should incorporate technology into your workflow. By using a Manufacturing Execution System (MES), you can automate the production process, track the progress of individual orders, and receive real-time feedback.
In addition, an MES can help you manage inventory levels, schedule maintenance checks, and improve data accuracy.
By leveraging technology, you can streamline your workflow, reduce lead times, cut overhead costs and improve production efficiency.
Read more: Production Planning Tools to take your Small Business to the Next Level
Collaborate With Suppliers and Partners
Collaborating with suppliers and partners is essential for successful MTO production planning. You need to have good working relationships with your suppliers to ensure reliable and timely delivery of raw materials.
You should coordinate with your partners to optimize the logistics network, reduce transportation costs and lead times, and improve delivery times.
Additionally, you can benefit from sharing knowledge and expertise with your partners, acquiring new skills, and enhancing your production capabilities as a team.
Monitor, Evaluate and Improve Your Processes
To maintain your competitive edge, you need to monitor, evaluate, and improve your MTO production planning processes continually. You should track production KPIs such as order fulfillment rates, delivery times, error rates, and production costs.
By analyzing this data, you can identify gaps, inefficiencies, and opportunities for improvement. Additionally, you should regularly communicate with your customers to gather feedback on their experience and use this information to adjust your production plan.
How Craftybase can Help Make to Order Manufacturers
Craftybase is production planning software designed for both small batch and made to order DTC small businesses.
With features such as order tracking, material purchasing, and production scheduling,
Craftybase makes it easier for small manufacturing companies to implement MTO production planning. Additionally, with its real-time data analytics, Craftybase enables you to monitor your KPIs and make informed decisions to improve your production efficiency.
Our software comes with a free 14 day trial so you can see if our production scheduling and planning features are a good fit for your small manufacturing business. Start your free trial now
In conclusion, Make to Order (MTO) production planning can be a game-changer for small manufacturing companies. By understanding your customers’ needs, developing a solid production plan, leveraging technology, collaborating with partners, and continually improving your processes, you can successfully implement MTO and reap its benefits.
With the help of tools like Craftybase, you can streamline your production planning and take your business to the next level.
