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Mixed Mode Manufacturing

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Have you heard of the Pareto Principle? It is a term used for the 80/20 rule. In the manufacturing world 80% of your production comes from 20% of the items that you manufacture. If this rule applies to your company it would make sense to have some mixed mode capabilities in your ERP system to gain immediate results like decreased inventory, efficiencies of scale, etc.

You manufacture products based on the manufacture to order process. The 80/20 rule applies to your item sales. It would make sense to manufacture those items, components, sub-assemblies that represent 80% of your production to stock. This could impact your bottom line because you would improve your run efficiencies, reduce labor hours, etc.

The 80/20 rule can be applied to every manufacturing process (make to order, make to stock, engineer to order, assemble to order) to improve the bottom line. If you have ERP software, default settings can be changed today to improve your bottom line tomorrow.