The five types of supply chain include Make-to-Stock (MTS), Make-to-Order (MTO), Engineer-To-Order (ETO), Assemble-To-Order (ATO) and Configure-To-Order (CTO).
Make-to-Stock (MTS): MTS supply chain involves manufacturing products in advance and storing it in warehouses until they are purchased. Products made in bulk, such as white goods and electronics, can benefit from Make-to-Stock supply chain since customers do not need to wait for their order to be made.
Make-to-Order (MTO): In this type of supply chain, orders are produced as per customers’ individual needs, meaning that customers can specify the quantity, design and other specifications for the product they are ordering. Customers usually experience wait times from a few days to more than a few months, depending on the complexity of the product.
Engineer-to-Order (ETO): Here, the customers’ orders are produced using what is known as project engineering, meaning each product is designed according to customer’s specifications and therefore no two orders are exactly the same. ETO supply chains are used in industries such as aerospace and defence, where each product is unique and highly specialized.
Assemble-To-Order (ATO): ATO supply chain involves manufacturing specific parts, but allowing customers to select these components and assembling only after the order is placed. Industrial products, such as motor vehicles, are possible examples of an ATO supply chain.
Configure-To-Order (CTO): CTO involves taking pre-assembled components and setting them up according to the customer’s needs. A great example of this is computers and other technology, which can be customized with different RAMs, CPUs, Graphics Cards, Hard Drives, etc.
Having an understanding of the different types of supply chains is essential for businesses to create the most efficient and cost effective supply chains. Understanding your company's needs and choosing the right supply chain type can ensure that customers get the product they want on time and in the best condition.
