Define Assemble-to-Order (ATO)

Assemble-to-Order (ATO)

What Is ATO (Assemble-to-Order)?

Assemble-to-order (ATO) could be a business production technique during which customers' orders are fleetly consummated and merchandise will be customized to some extent. it always necessitates that the product's essential parts have antecedently been created however haven't however been assembled. Once receiving Associate in Nursing order, the items are promptly assembled and therefore the final product is distributed to the customer.

TAKEAWAYS vital

• Once Associate in Nursing order is confirmed, assemble-to-order (ATO) could be a business technique during which things are promptly designed from element elements.

• Assemble-to-order could be a hybrid of make-to-order and make-to-stock production ways.

• The costs of grouping the merchandise from its parts are trivial in an exceedingly typical ATO approach, however the prices of making the numerous parts will be high.

An assemble-to-order technique is employed by a laptop manufacturer World Health Organization accepts orders then assembles customisable computers victimization parts like keyboards, displays, and motherboards.

Getting to grasp Assemble-to-Order (ATO)

The assemble-to-order strategy could be a combination of the make-to-stock and make-to-order methods (MTO). A make-to-stock strategy is one during which things are fully factory-made prior time. The goal is to make a list that corresponds to anticipated or expected client demand. Setting a production level, making inventory, then progressing to sell the maximum amount of assembled product as possible would be the steps during this technique. It's primarily used for high-volume commodities, consumables, and things which will be purchased in bulk or singly.

A make-to-order strategy is one during which things are created solely once the order is received. Demand drives production, and things are solely created once orders are confirmed. to place it differently, the provision chain operation doesn't begin till the order is placed. There's adequate proof of what the client wants. This technique is usually used for high-end products or objects that are created in little batches or singly.

The ATO technique aims to mix the benefits of each make-to-order and make-to-stock producing, permitting merchandise to be fleetly delivered to customers whereas additionally permitting them to be customized or updated in specific ways that supported consumer requests. In most circumstances, the time and value of grouping a product from its parts is negligible. However, building the parts, that are commonly bought from a provider, will take a protracted time and value plenty of cash.

Assemble-to-order techniques became a reality as a result of technological developments in production processes and inventory management systems. After you consider the price of delivery, the technique has tested a manna from heaven for product customisation choices.

Advantages and downsides Constructed-to-Order (ATO)

As with several middle-of-the-road solutions, assemble-to-order has its own disadvantages.

Pros 

• There's no got to pay cash on materials, supplies, or storage.

• Orders tailored to the requirements of the client

• There's a lower likelihood of getting unsold units available.

Cons

• Low supply poses a risk of lost sales.

• Producing things might take longer than expected.

Assemble-to-Order Example (ATO)

Take, as an example, a laptop maker. it should contain all of the essential parts of a laptop available and prepared to ship, like motherboards, graphics cards, processors, displays, and keyboards. For these parts, the organisation depends on a spread of vendors.

When new laptop orders arrive, the manufacturer will quickly construct and individualize the machines utilising the varied parts. However, the method is driven by consumer demand, and therefore the parts sit on shelves till the acquisition arrives.