To the untrained eye, manufacturing appears largely uniform. A factory contains machines, operated by people, who make things. Done. Well, not really. Manufacturing operations actually embody a great deal of diversity. At a high level, there’s a split between “discrete” and “process” manufacturing. In the former, a manufacturer takes discrete parts, listed on a bill of material (BOM), and assembles them into a finished product. Think cars. In “process” operations, the manufacturer follows a recipe or formula, blending ingredients, perhaps in liquid or gaseous form, to make a final product. Think pharmaceuticals.
Manufacturing Production Methodologies
Each mode of manufacturing will need its own, specially adapted form of ERP software. Acumatica Cloud ERP has proven itself able to accommodate both discrete and process manufacturers. Yet, discrete vs. process is just one layer of manufacturing’s heterogeneous nature.
The most common manufacturing methodologies include:
- Make to stock (MTS)—A manufacturing process that creates finished goods that are placed in stock. When customers order goods, they are delivered from a warehouse containing the stock. This methodology requires software that is good at demand forecasting and inventory replenishment.
- Make to order (MTO)—Wherein manufacturing processes are scheduled to fulfill specific customer orders. ERP for MTA needs good features for estimating, job costing, BOM integration with Computer Aided Design (CAD) and vendor Request for Quote (RFQ).
- Assemble to order (ATO)—With ATO, the manufacturer assembles components to fulfill customer orders. ERP in an ATO environment must support demand forecasting, kitting and disassembly and light manufacturing processes.
- Configure to order (CTO)—A process that builds unique finished goods based on the output of a rules-based product configurator, which is typically part of the ERP solution. The configurator defines the BOM and routing options.
These are just a few of the more prevalent modes of manufacturing. Others include engineer to order (ETO), which involves building products based on customer specifications, remanufacturing (REMAN), which makes new products out of refurbished used parts and job shops, which build products on a per-order basis. Job shops seldom stock parts or raw materials. Other manufacturers follow what is known as a “mixed mode” (MM) approach, where they produce products on both an MTS and MTO basis.
Further dimensions of manufacturing encompass the difference between “continuous flow” and “batch processing.” Continuous flow, also called “Repetitive Manufacturing” (REM) means producing goods in rapid succession. REM usually works using automated assembly and steady state assembly lines or fixed work centers. They continuously produce the same product.
A batch process, in contrast, has manufacturers producing a finite quantity of a products in a production run. Batch processing is common for “process” type of manufacturing, such as the production of a beverage or medicine.
Manufacturing ERP—The Acumatica Way
Acumatica Manufacturing Edition supports multiple manufacturing methodologies including make to stock (MTS), make to order (MTO), engineer to order (ETO), configure to order (CTO), batch process and more. Customers represent every possible specialty in the manufacturing industry including industrial machinery and equipment, electrical and electronics, automotive, fabricated and primary metals, instruments, food and beverage and most recently new sustainability and green manufacturing businesses.
Learn More in Our Manufacturing ERP Handbook
If you’re shopping for a new manufacturing ERP platform, you’re probably drowning in information. After weeks of product research, it can be tempting to choose a system based on a gut feeling, or a recommendation from a peer. But now there’s a better way to cut through the marketing hype and determine which kind of ERP will be the best fit for your business.
Additional Manufacturing Resources