Managing Make-to-Stock and the Concept of Make-to-Availability (Chapter 10 of Theory of Constraints Handbook)

This is an individual chapter of Theory of Constraints Handbook. This chapter highlights a significant change in the TOC methodology regarding make-to-stock. One of the aspects of the change is refraining from determining a due date for a production order that is for stock. Another significant change is to acknowledge the difference between make-to-stock (MTS) and make-to-availability (MTA). MTA is a commitment to maintain availability of stock at all times. This means adopting a marketing approach coupled with operational capability. Certainly MTA means producing to stock, but not every make-to-stock order supports the commitment of full availability at all times. The chapter deals with the current misunderstanding of forecasts, and develops the cause and effect logic behind the required planning and execution rules for MTA. The term of “target level” describes the stock buffer, which is different than the regular TOC term of “time buffer.” The planning decisions are centered at fixing the inventory in the system. The matched buffer management rules determine the real priorities in the shop floor. The chapter discusses various MTA environments, like vendor-managed-inventory (VMI) and managing components for MTA, their related problems and the TOC solution for them. Also discussed is the mixed environment where make-to-order and make-to-availability exist side-by-side. The chapter ends by highlighting certain MTS environments that are not MTA.