Tuesday, November 17, 2009

MTS or MTO

A friend commented that MTS decision as requested by sales team. Is this true?
Do you think sales team have full accountability?

Perhaps Supply Chain has to take accountability to decide whether:
- MTS: Make to Stock or RTS (Replenish to Stock)
- MTO: Make to order or Indent (for import)
Certainly to decide this, we need all stake holders input, including sales.

Here is some rationale to decide:
MTS/RTS: Fast moving, large volume, less fluctuate demand pattern.
MTO/Indent: Slow moving, in consistent demand, project items

Exception: Gambling… rare situation
Exclusive hi cost consequence spare part with no substitute. Example: an electric fuse than specifically designed for Power station, very expensive. But need immediate replenishment to avoid catastrophic black out.... but Do you want to stock the whole power plant?

How do you think?