MaketoStock

Make-to-stock (MTS) is a production and inventory management approach in which goods are produced or procured in anticipation of demand and kept in stock as finished goods until customers place orders. The term maketostock is sometimes used as a shorthand spelling for make-to-stock. It contrasts with make-to-order (MTO), where products are manufactured to customer specifications after an order is received, and with engineer-to-order (ETO).

In MTS, forecasting drives the master production schedule and material requirements planning. Companies estimate demand, set production quantities, and maintain safety stock to guard against variability in demand and lead times. The goal is to achieve short lead times, high service levels, and efficient production through economies of scale.

Advantages include rapid fulfillment, consistent capacity utilization, and lower unit costs from batch production. Disadvantages include the risk of overproduction, obsolescence of inventory in fast-moving markets, and high carrying costs if demand underperforms forecasts. The approach works best when demand is relatively predictable and product lifecycles are long enough to justify stocking. Industries such as consumer packaged goods, basic electronics, and automotive components commonly use MTS, though many companies blend strategies, maintaining a base stock while allowing customizations via post-sales services or assemble-to-order options.

Key performance indicators for MTS include forecast accuracy, service level, inventory turnover, and days of inventory on hand. The strategy has evolved with digital demand sensing and advanced analytics, which help refine forecasts and reduce the risks associated with stocking.