Differences between Make-to-Order, Assemble-to-Order, and Make-to-Stock

Operations Management
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Question 1 Explain the differences between make-to-order, assemble-to-order, and make-to-stock
Make to stock – It is the process that involves making good anticipating their demand. The goods are stocked and then sold later. At the time of manufacture/production, the goods have not yet been sold, nor has the company received orders to produce them. For example, mass-produced cars like Ford, Toyota, etc. At the time of manufacture of mass-produced cars, the company anticipates demand and produces according to the demand. The goods are later sold through their dealerships. Most of the products found in the supermarkets, such as canned and frozen foods and other household items, are make-to-stock commodities.
Make to order – It is the process that involves the producer/manufacturer commencing production once a customer has placed an order of the item. This is common for most expensive goods and or luxury products. The producer/manufacturer may or may not have stocked the raw materials but will await the placement of an order to commence production. For example, military equipment. The equipment is only produced once the client (typically the government) orders. The Gerald Ford aircraft carrier commenced production when the US government ordered the Northrop Grumman Shipbuilding company.
Assemble to order – Assemble to order is a blend of both make-to-order and make-to-stock models. The manufacturer produces the parts and or assembles partly the commodity awaiting the customer to come and customize it to his/her liking. Usually, the commodity's basic or ‘unchangeable’ parts are put together and then finished according to the customer’s liking. For example, Airbus and Boeing manufacture planes for airlines, but each plane is finished according to the client’s specifications. Each plane starts the manufacturing process the same way, but there are slight variations in the seat configuration, among other things, for each client. Other commodities with similar production models are luxurious cars where the manufacturer allows the customers to specify their preferences for the car to be customized for him/her.
Question 2 (a). What is the key to Wal-Mart’s success to date? Highlight the strategic role of operations in this success story.
Walmart invested in making its operations efficient at the expense of rapid expansion and aggressive marketing campaigns. By improving the efficiency of their operations, Walmart was able to compete favorably in the market by offering competitive price points. Improving efficiency led the company to reduce its overhead costs and offer competitive prices for the same products.
The strategic role of improving operations was to reduce the company’s overhead and reduce the cost transferred to the customer. The higher the operational efficiency, the lower the overhead costs, and hence the lower cost is transferred to the customer for each product. Therefore, the company could price its products competitively and beat its competitors. It is still the factor that remains the key strength of the company after many decades in the industry. The company is constantly finding ways ...