Analysis of ATO, MTO, and ETO

Logically, the ETO mode can better meet customers' special customization requirements. However, in the ETO mode, manufacturing enterprises generally have a large number of disposable items, new items, new BOM versions, and new processing processes, in addition, it is more complex than Ato and MTO in terms of sales quotation, engineering design, planning, production coordination, and supply assurance.

When talking about manufacturing, we often mention ATO, MTO, and Eto. When discussing complex manufacturing, these concepts will be introduced more. In fact, these concepts refer to a production-driven approach. Some manufacturing enterprises prepare production plans based on forecasts or market needs, and then produce products based on the plan, and sell these products as much as possible, this method is called MTS (make to stock), which is oriented to inventory production. Of course, some manufacturing enterprises cannot do this because their products must be produced according to customers' requirements, you cannot produce the final product before you know the customer's requirements. Otherwise, the biggest consequence may be that the sales department goes out. This type of enterprise can be collectively referred to as "Order-oriented manufacturing ", depending on the situation, this can be divided into Ato (assemble to order, order-oriented assembly), MTO (make to order, order-oriented production), ETO (engineering to order, according to the order design ). The following provides a rough analysis and comparison of these methods.

1. ATO (assemble to order, for order assembly)

First, this is a production model that can better meet customer requirements than MTS. In the MTS mode, the customer's choice of products is limited, and the customer can only choose from products that have been finalized and produced. If the customer has special requirements for the product, it is generally not allowed to directly propose to the manufacturer and be satisfied through the manufacturer's customization. Instead, it can only let the manufacturer know what the customer needs through some indirect channels, then, the manufacturer makes improvements to the product, or designs new products to meet all or part of their own needs. The most fundamental feature of ATO is that customers can directly select product configurations. In addition to this most fundamental feature, ATO has the following features:

When designing a product, manufacturing enterprises have designed as many configuration changes as possible to meet the different needs of more customers, because such configuration changes exist, therefore, enterprises cannot make products before trying to sell them. Instead, they must first obtain orders from customers and determine the configuration they need, the Enterprise then produces and sells the product to the specified customer according to the customer's order.

Before receiving orders from customers, enterprises can prepare all kinds of components required for final assembly. Some components are rarely used, while others are often used, there are different planning strategies for components with different use possibilities, and some of these components are manufactured by the enterprise itself, and some are purchased.

Generally, enterprises prepare all common components, and those that are not commonly used may have the most basic inventory backup volume or reliable supply channels, as long as the customer confirms the order, the enterprise can assemble according to the customer's requirements (sometimes referred to as "assembly"), so as to quickly deliver the final product to the customer.

Generally, the delivery cycle of the ATO model is not very long, because this model is a bit like "everything is ready, nothing is wrong ", the so-called "Everything has" means that the components used for assembly are either in stock or supply guarantee, while "only in arrears" means the customer's order, as long as the customer's order is obtained, you can start the Assembly. This is ATO.

If the components required for final assembly are not "everything is ready", the customer needs to process and produce some components after confirming the order before assembly and delivery, this is not an ATO but an MTO.

2. MTO (make to order, for Order Production)

In fact, the Assembly mentioned above can also be called production. In manufacturing enterprises, production is a general term for some processing activities, such as gold processing (casting, pressing, cutting, car, milling, planing, and folding), surface treatment (cleaning, electroplating, spraying, etc.), Assembly (Component Assembly, Assembly by Assembly, Assembly, etc ), testing (sampling, full detection, no-injury detection, load testing, etc.) can all be called production. MTO (make to order) is called production to distinguish it from assemble, a specific production activity, that is, "other processing activities besides assembly ".

The difference between MTO and ATO should be clear, which can be analyzed from the "production process. In general, in the production process of a product, the final step is the assembly, and before the Assembly, it is necessary to go through a series of production steps, such as processing materials into rough, finish the rough, assemble the parts, assemble the components, and assemble the components, subsystems, and modules. In the ATO mode, all components required for the Assembly are either available or supply is guaranteed, so the response speed is relatively fast, the uncertainty of the production organization is mainly concentrated in the assembly process. In the MTO mode, some components required for the Assembly cannot be used for standby databases. These components are either not universal or need to be specified by the customer, either the product cannot be pre-produced for backup due to cost or timeliness. The product can only be determined and produced based on the customer's order. From this point of view, MTO should be a step forward than ATO.

The following are the main features of MTO:

The production organization is not "everything is ready, everything is in the air", that is, the components required for the Assembly are either in stock or supply is guaranteed, as long as the customer determines a single assembly can be assembled, however, some parts can be produced only after they are specified according to the customer's requirements.

All the parts that must be produced according to customer requirements are finalized. The reason why this component cannot be produced before the customer's requirement is determined may be that the sub-parts of this component are also variable configuration, and the customer must determine how to configure it; it may also be because the cost is relatively high, and the standby database may cause a certain amount of financial pressure before the customer needs to do so. In addition, there may be a possibility that such components are time-sensitive, it is produced before the customer's order is confirmed, and may be wasted due to failure. In short, some components required for assembly cannot be fully prepared due to various reasons, and must be produced according to customer orders.

The difference between MTO and ATO is that the production of parts must be performed according to the customer's order requirements. It should be noted that although the production of these parts should be determined according to the customer's order, the design of these parts is completely finalized, as long as the customer specifies this part, production can be performed according to the existing design.

If the customer is allowed to raise further special requirements, and to meet this special requirement, the customer must make design changes to the product or component, or even adopt a new design, this is not MTO, but Eto.

3. ETO (engineering to order, order oriented design)

We can use an example to illustrate the differences between ETO, ATO, and MTO:

There is a manufacturing company that produces products that are specialized testing instruments. The dashboards, indicators, and casings used by such testing instruments can be selected by customers, all dashboards and indicators that may be selected by the customer are ready for inventory, and specialized suppliers can supply various shells that may be used at any time, this enterprise can basically be seen as an ATO model.

Assume that the shell used by this testing instrument is not purchased, but produced by the enterprise. The shell has a variety of different models (such as different shapes, sizes, and specifications ), there are a variety of optional materials, spray paint color also has a variety of optional. In general, because there are too many combinations of shell models, materials, and colors, it is impossible for enterprises to prepare various shells first, however, you can only reserve all kinds of metal sheets required for the processing of the shell. When a customer signs a sales contract with an enterprise, the customer will specify the type of shell, plate, and spray color. Then, this enterprise can basically be seen as an MTO model.

Further, if the shell shape of the test instrument can be customized according to the customer's requirements, when the shape and size of the shell also need to change, this will lead to the re-design of the internal circuit board and wiring method, and the layout of the installation position of the dashboard and indicator, which will also lead to the change of the punching position of some fasteners, fasteners of the new specification may also be used. In this case, this enterprise can basically be seen as Eto.

The preceding example shows the differences between ETO, MTO, and ATO. The main features of ETO are as follows:

The customer can propose customization requirements. This requirement is not only for selecting a configurable component list, some functional requirements can also be put forward (such as the scope of use, adaptability to the environment, specification parameters, shape and size, and cost limitation ).

In order to meet the customer's requirements, it is not necessary to use the existing components for assembly or production and processing according to the existing drawings. It is necessary to change the design or generate a new design.

Starting from the features of ETO, we can see that ETO better meets customers' customization requirements than MTO and ATO.

4. Different Forms of customer orders in the ATO, MTO, and Eto Modes

Customer orders are sometimes called sales orders and sales contracts. Generally, customer orders must have several elements: What is the sale? How much is sold? What is the price? When to deliver? For manufacturing enterprises such as ATO, MTO, and Eto, customer orders also shoulder another important mission: To tell enterprises how to configure and design products.

If we order a personal computer from the Internet, we can log on to the webpage of the manufacturer, select the product category (home computer or commercial computer, server or terminal), and then select the model, there are usually many different configurations under a certain model. We can check and select various configurations and then complete the order. After this process, what information does we tell the manufacturer? It is actually an OCL table (order component list, order component list ). After our order is confirmed, the manufacturer can start assembling and then deliver the goods. This is a customer order in the ATO mode. In addition to the product model, price, and delivery date, this Order also comes with an OCL table, the manufacturer knows our selection of product components (Child parts) through the OCL table.

If we are going to buy a car, we usually need to select a model first. However, under the same model, there are different configurations, such as Standard Edition, comfortable edition, deluxe edition, and flagship edition. Unless 4s stores are available in stock, we will sign a sales contract with the automobile sales company, and then the car factory will organize production and delivery according to the model, configuration and color specified in the sales contract. If we select a special color, we may have to wait for the last two months to get the car we bought. This is the customer order in the MTO mode (since the spray paint on the body is based on the customer order, it is not the ATO mode but the MTO mode ), as a customer, we can ask the car factory to produce according to our choice, but we cannot ask the car factory to design according to our needs. While choosing models, colors, and configurations, in fact, it is equivalent to submitting an OCL table. We also directly Select Sub-pieces through the OCL table, but these sub-pieces will be produced after we select them, and then assembled into the final product.

To sum up, an OCL table is a common feature of customer orders in Ato and MTO modes. OCL tables do not have standard and fixed formats. Most of the time when we fill in an order, check and select a function, we do not know that this is actually an OCL table, that is, let the customer select a function, in fact, is to select a component. The existence of the OCL table is equivalent to allowing the customer to directly select the child of the P-BOM (Plan BOM. In the ETO model, what customers provide to manufacturing enterprises is not (or not all) OCL tables but "real functional requirements". manufacturing enterprises should design according to these functional requirements, use the original BOM to design a new BOM and refer to the original manufacturing process to design a new process until it can meet the customer's needs.

Finally, we need to explain whether a manufacturing company belongs to ATO, MTO, or Eto. This is not absolute. Maybe an enterprise has different product series, A series of products are dominated by MTO, while others are dominated by Eto. Even for the same product, it may change from the original ATO model to the ETO model as time changes and market competition becomes increasingly fierce. Logically, the ETO mode can better meet customers' special customization requirements. However, in the ETO mode, manufacturing enterprises generally have a large number of disposable items, new items, new BOM versions, and new processing processes, in addition, it is more complex than Ato and MTO in terms of sales quotation, engineering design, planning, production coordination, and supply assurance.

 

 

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