Customer Order Decoupling Points (white rounded box in the diagram) typically reside in the first MTS process (when looking upstream):įor Engineer-to-Order replace Customer Order with Customer Intent. The OpenReference Supply Chain Operations Domain recognizes these differences in behavior at level-2: Make-to-Stock ( MTS), Make-to-Order ( MTO, CTO, ATO, PTO), and Engineer-to-Order ( ETO). It allows companies to prevent all-around stoppages and mitigate the bullwhip effect. Optimization is realized by balancing capacity and lead-times. Decoupling inventory is the strategic buffer stock of subassemblies and WIP that could be used when suppliers are unavailable, when there are internal disruptions like machinery breakdown, or when demand is greater than expected. Downstream processes are driven by actual customer orders (green in the diagram).Optimization is realized by balancing inventory and capacity. For example, inventory used by one stage of a manufacturing. Upstream processes are driven by forecast based planning information (blue in the diagram), Materials are pushed downstream. Decoupling refers to the additional items, or WIP, kept on hand to prevent production line hold-ups.The behavior of processes upstream and downstram of the Customer Order Decoupling Point is quite different: Understanding the Customer Order Decoupling Point of a supply chain is important for Supply Chain Management processes. Managing Customer Order Decoupling Points is a Best Practice. Customer Order Decoupling Point is a Term describing the process or node in the supply chain network where the activities are no longer driven by individual orders. Whereas all companies may have safety stock, decoupling inventory is useful if parts of the line work at different speeds and only applies to companies that.
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