Supply Chain Management Operating Models

An Organization may follow one of the following SCM Operating Models.

Make to Stock: In this model the stock is replenished regardless of the sales order demand. Usually the Inventory carrying cost is high in this model.

Assemble to Order: In this model the sub-assemblies are stocked while the finished product will be assembled based on the customer demand. Personal Computers are good examples for this model.

Make to Order: Usually no stock is maintained in the warehouse under this model, as the products are manufactured based on the customer demand.

Configure to Order: In this approach the products will be configured based on the customer demand.

Engineer to Order: The product will be designed based on the customer specification and demand.

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