Fast Moving Consumer Goods
The primary benefit of make to stock is efficiency. For example, a fast moving consumer goods company can produce items in large batches that allows for economies of scale and a low cost per unit.Fashion
Make to stock relies on reliable forecasts of demand. For example, a fashion company may require demand forecasts for a shoe design broken down by size, color and style variation. When a forecast is off, a color or size ends up overstocked.Food
Perishable items such as food are particularly complex to make to stock. For example, a grocery store chain may plan production of fresh fruit assortments according to factors such as public holidays, climate, weather and the demographics associated with each location. They may aggressively discount such items as their expiry time approaches to avoid waste.Mass Customization
By definition, make to stock doesn't allow the customer to customize the product. However, make to stock items are often used as base products for mass customization. For example, make to stock snowboards can be produced without a design. These can be used as base models for custom manufacturing that allows customers to design their own snowboard art.Original Equipment Manufacturer
Original equipment manufacturers are firms that produce parts for other firms products. In many cases, such parts are produced on a make to stock basis and exported to warehouses that serve different regions to reduce order turnaround time.| Overview: Make To Stock | ||
Type | ||
Definition | The traditional production process of building up an inventory based on sales forecasts. | |
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