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What Is Assemble to Order?

A business that utilizes the assemble to order method doesn’t have to face the often impossible task of anticipating every end product that a customer would want.
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  • Written By: Daphne Mallory
  • Edited By: Melissa Wiley
  • Last Modified Date: 24 September 2014
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Assemble to order refers to a production method in which the customer must first place an order before the item is produced. The components of the products are already manufactured, which makes this process different from the make to order method, where everything is manufactured after receipt of an order. Businesses often stock the inventory required to make the product, and as soon as an order is placed, they often have everything they need to give the customer what has been requested. It also makes it easier to customize orders for customers, because the products are not pre-made. The chief benefit of this production method is that customers can quickly receive products customized to meet their needs.

Businesses that want the ability to make a large number of different products from common parts benefit the most from the assemble to order method. They can stock the common parts and sell varied customized products to meet customer needs. For example, a jewelry maker can stock beads and other supplies needed to make handcrafted jewelry, but still deliver unique jewelry using what he has in stock. A business owner can also select inventory based on the space she has to stock the inventory, and this method allows a business to stock a much lower inventory.

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A business that utilizes the assemble to order method doesn’t have to face the often impossible task of anticipating every end product that a customer would want. For example, two customers may want sheds built two different ways. The business owner has the option to build the two shelters in advance, which is the make to stock method. If the same business is now faced with 100 customers who want the sheds built 10, 20 or 30 different ways, then that could pose space and efficiency problems for that business. The way to resolve this is to customize each order by assembling each order for a shed as it comes in instead of trying to anticipate varying customer preferences.

Another key benefit of the assemble to order method is that businesses can reduce errors in the delivery of products. For example, a business that sells computers to customers can reduce the amount of errors when choosing this method rather than the options method. Instead of presenting 50 different options for computers that a business can choose from and then attempting to reconfigure pre-assembled computers to match the order, the business can wait to assemble and customize the order after it has been placed. That will reduce the chances of errors, which can more readily occur with the options method.

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Discuss this Article

andee
Post 4

I can see how it would be much more efficient for a small business to assemble products to order. Depending on what type of business you have, it could take a lot of space and expense to keep a lot of inventory in stock.

If something didn't sell like you hoped it would, you are also stuck with extra inventory that you might not be able to move. That is usually when you can find some great deals if you are a buyer.

If you are the seller and owner of the business, it might not be such a great deal. Sometimes it can be a fine line for a business owner to know what to do.

If you have high customer demand for something, you don't want to keep them waiting. On the other hand, you want to be sure you are able to sell what you already have in stock.

honeybees
Post 3

I have a small business on the side where I make and sell beaded jewelry. I sell this jewelry on some online websites and I usually have only made one particular item ahead of time. I use this to take a picture along with a description to upload to the website.

I try to keep all the materials I will need to make these in stock. As I get orders, I will make the jewelry and then send it out. I specify that each item is handcrafted and to allow up to 5 working days for the item to be completed.

There have been a few times when someone wants to buy more than one of each particular item. We always communicate before the order is placed so they know what kind of time frame we are looking at.

Because I also work a full time job, it may take me longer to get big orders ready to go. Most people are easy to work with and are willing to wait since they knew it takes time to make each individual item.

LisaLou
Post 2

I have a friend who makes custom built birdhouses. These are quality products that are unique, and some of them are very detailed and elaborate. He will also make customized birdhouses, if you are looking for something extra special.

He travels around to craft shows and displays and sells many of his items at these shows. He also takes a lot of orders at these shows and he will build these to order.

It would be almost impossible to be able to guess what the customer demand would be. The expense and time of keeping that much inventory on hand would also be overwhelming.

When he leaves one particular craft show, he knows how many birdhouses he will need to build in the near future. Since he already has most of the materials on hand, he just needs to find the time to build them.

John57
Post 1

I like to order handmade items from an online craft site and many of these items are made to order. Most of the sellers will give you a good idea of how long it will take to get your product.

When I know what to expect, and know they are creating the product for me, I don't mind waiting a little bit longer for it. If I was a seller, I can see how it would be too expensive and time consuming to make everything up ahead of time.

You make much better use of your time and materials by making up products as you have a demand for them.

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