SMALL LOT PROCESSING AND OTHER NECESSARY CONDITIONS FOR BUILD-TO-ORDER MANUFACTURING
Author: Brian Tracey Company: EFTC Corporation Date Published: 8/23/1998
Surface Mount International
Abstract: Build to Order - or BTO - is the talk of the electronics industry. OEMs, especially PC manufacturers, are aggressively putting together the infrastructure to meet the end customers’ needs on demand. EMS providers are looking to offer the infrastructure required to support this evolving need. BTO challenges both the OEMs and EMS providers to have the information technology, logistics support, assembly prowess and supply chain management skills to manage this complicated process. One of the primary challenges is subtler. BTO is an outgrowth of the shift from the Industrial Age to the Information Age. In the Industrial Age, companies mass produced products to meet a market-driven forecast. “Since Henry Ford pioneered the moving assembly line in 1913, the challenge of mass production has been keeping costs low while satisfying customers’ desires for tailor-made goods. Now technology is making “- mass customization -“ increasingly possible.“[l] In the Information Age, companies must be able to mass customize products to meet an unpredictable customer demand. Manufacturing expertise focused on highly efficient volume production is incompatible with BTO. BTO demands the expertise to process very small lots (optimally a lot size of one). The forces behind build to order are derived from the shift from the Industrial Age to the Information Age. However, many of the characteristics of the Information Age have their roots in the Agricultural Age. It is important to understand how these shifts have evolved into the need for BTO-like services in order to be competitive in today’ s world. A sub-theme of the shift from Industrial Age to Information Age is the transformation of vertical organizations to virtual organizations. The key to a virtual organization lies in the strength of the organization’ s partnerships. The sum of the partners that offer OEM BTO is often greater than the whole of any single organization. This paper looks at the partnerships that make up this infrastructure.