The term supply chain

The management of how goods and services flow inside a business is referred to as the supply chain. Supply chain management is a critical strategy that helps to eliminate the likelihood of an inventory shortage. Many institutions in the corporate world use the Assemble-to-Order (ATO) procedure. The ATO relies on the assembly of a product’s components to provide supplies for customers. The Assemble-to-Sell (ATS) technique was designed for efficiency objectives. When clients place orders, this operation is characterized by the assembly of a product’s components. The procedure’s best feature is that it brings together business people and their customers. The ATS allows investors to utilize alternative components if some are missing in their inventory. Customers are engaged in the decision-making process to decide whether they can purchase products that are made of components derived from different suppliers.

Companies that sell computers utilize this concept extensively because their products are made up of different hardware. In this case, customers’ orders can be prepared using hardware equipment that serves the same purpose as the original ones. Thus, the ATS serves the purpose of promoting frequent sales since customers have the chance to make purchases. IBM’s inventory reduced by $ 100 million after embracing the ATS model. Companies are guaranteed of profits, while the customers benefit from high-quality products. Once suppliers fail to make deliveries for various components, the ATS model allows investors to acquire other products or components serving the same purpose. This aspect enhances businesses by ascertaining that sales take place continuously. Since customers are influential in business, the ATS allows business organizations to balance both supply and demand needs.

Introduction

The profitability of business organizations relies on the efficiency of their supply chains. Companies that lack proper supply chain systems end up losing revenue to their rivals. In this case, proper strategies are needed to ensure that proper functioning supply chains are established to facilitate profitable operations. Precisely, product availability is a significant factor in a supply chain that follows the Assemble-to-Order (ATO) concept. This production strategy requires companies to manufacture basic parts of their products before assembling them. Thus, customers can get their products in the shortest possible time after placing orders. Product availability is crucial in that it addresses the target market’s demand. The Available-to-Sell (ATS) concept enhances supply chain efficiency by incorporating both profitable demand response and demand shaping. This aspect enhances supply chain efficiency, thereby satisfying organizational and customers’ interests. A perfect utilization of the ATO and ATS frameworks is capable of streamlining supply chain operations to the extent of exposing an organization to both internal and external economies of scale. It is important to note that the success of the ATO system is dependent on the positive outcomes associated with the ATS.

Body

Theoretical Results

Various studies have been conducted on the management of inventory in ATO supply chains. The ATS approach is significant to businesses that follow the ATO process. Ervolina, Ettl, Lee, & Peters (2007) believe that the ATS creates a theoretical upper bound in any given supply, demand, and customer behavior model. Profitability is realized because sales are continuous and the customer’s tastes and preferences are addressed accordingly. For example, ATS enhances supply chain efficiency in the sale of computers since their creation relies on hardware like microprocessors, video cards, and hard disks. ATS pursues marketable product substitutes that can meet demand for supply challenged inventory. In a case where a certain component is inaccessible, the ATS utilizes alternatives to keep fulfill all the placed orders. Also, it eliminates both excess component inventories and unfilled orders. The order and consistency brought forth by the ATS enable users to create stable sales environments that are vital for business. Thus, the ATS is the best approach that ATO firms can employ to operate under an efficient supply chain.

There exists numerous literature expounding on the ATS supply process. For instance, ATS technologies have replaced the previous Assemble to Promise (ATP) system. Companies can now follow the ATS to create feasible production plans that can easily schedule customers’ orders appropriately. ATS stands out from the other supply chain operations since it eliminates all the surplus inventory. On a broader perspective, both demand and supply are well-addressed without any party being ignored (Ervolina, Ettl, Lee, & Peters, 2007). The ATS focuses on a firm’s perspective and the customer’s propensity to purchase alternative products. In some instances, high market demand for certain products can be addressed by sourcing higher quality products.

The ATS focuses on a customer’s flexibility to avoid dissatisfaction in cases of constrained supplies. Following the downward substitution ideology, companies are capable of eliminating low-quality products from the supply chain. This aspect is arrived at through the introduction of high-quality alternative components that can serve the same purpose appropriately (Ervolina, Ett, & Peters, 2006). The substitution takes place in the component section to match the customer’s demand and purchasing power. To be precise, introducing new alternative products would attract higher prices, hence affecting the market’s demand and willingness to acquire the company’s products.

The ATS process enhances optimal configurations of unfinished products to promote late customizations. This aspect enables computer manufacturers using the OTS approach to avoid losing their market share to competitors. ATS perfectly fits in the computer manufacturing industry since numerous components are needed for the final product to be assembled. For example, IBM and other computer companies such as Dell use a simulation framework that has reusable methods and components. These methods and components are adapted to handle different product availability issues in an organization.

The product configuration process helps supply chains stabilize in their operations. The absence of some components does not mean that business should stall. Business organizations ought to invest in utilizing availability management in their internal environments. This ideology serves the purpose of coordinating product availability to enhance the real-time servicing of the customer’s orders (Ervolina, Ettl, Lee, & Peters, 2007). The ATP process brings together aspects such as business objectives, marketing, and sales. Once a customer places an order, employees indicate a date in which the subject products will be available. In this case, customer satisfaction is enhanced since orders are recorded and scheduled based on the availability of all the required components. The ATP creates order in the supply department as schedules keep both the company and the customers informed of the entire process (Ervolina, Ett, & Peters, 2006). The system also enhances planning in companies since continuous sales are guaranteed. One advantage of the ATS is that it attracts minimal costs in the ATO process. These minimal costs are vital since they enable companies to achieve their economic goals with ease. Also, it is important to note that the ATS is suitable for numerous market segments because it enhances efficiency in the market. The most successful supply chains across the world are executing the ATS because its benefits are higher compared to those of the ATP.

ATS’s uniqueness is enhanced by its ability to employ differentiated order acceptance policies. For instance, its simulation model supports the First-Come-First-Serve (FCFS). In this scenario, customers are served immediately is the first choice products are available in a company’s warehouse.

This flexibility aspect creates an environment where businesses can enhance client satisfaction promptly. For example, customers who make orders initially do not face challenges relating to component constraints. On the contrary, if the first choice is absent, scheduling is done once the alternative products are accessed. The flexibility of the ATS enables it to inquire from customers, whether they are comfortable with the available alternative products (Ettl. Huang, Sourirajan, & Cheng, 2006). Companies that seek to expand their scope of operations in sales and inventory management should employ the ATS appropriately. In this case, the customers’ opinions count, since their satisfaction influences sales and profitability.

Understanding of Product Availability in ATO Supply Chain

The article’s content is significant to business operators because it addresses issues that promote efficiency in product supplies. The findings portrayed by the author enhance business people’s understanding of handling supplies. Precisely, numerous strategies are showcased on how to avoid operating on insufficient stocks. The ATS business process is one solution that can be employed to enable businesses to address their customers’ needs and preferences with ease. Thus, companies dealing with products that are formed by assembling different components can utilize alternatives to deliver their customers’ orders. The merits of having a flexible supply chain system are well-portrayed by the content, thereby promoting proper planning in inventory management (Ervolina, Ettl, Lee, & Peters, 2007). The article’s insights enlighten readers and business individuals on the importance of being creative to sustain their ventures’ sales. Also, the author educates business organizations on the importance of involving customers in the decision process. The articles expound on the importance of seeking customers’ opinions regarding the products they seek to purchase. To be precise, product assembling cannot be conducted without a proper understanding of the market’s interests. On a different perspective, business firms can adopt the ATS practice to assemble satisfactory products that are superior to those of competitors. On a broader perspective, businesses can embrace the ATS process to enhance steady sales and the continued satisfaction of customers.

Controversies

As portrayed by the authors, there exist numerous controversies facing supply chain operations in the ATO setup. For example, using the ATS is time-consuming. This aspect stems up from the fact that customers have to wait for the filling and delivery of orders. The time taken for alternative components to be acquired for product assembling could force many customers to make purchases elsewhere. This outcome is likely to lose huge profits to business rivals. Thus, in as much as companies utilize the ATS idea, they might lose sales to competitors who keep full inventories. Another controversy is that the scheduling of orders causes low supply. In an instance where alternative components have to be sought, it becomes a challenge for companies to maintain a steady supply (Ettl, Huang, Sourirajan, & Cheng, 2006). Also, customers who decline purchasing products characterized by alternative components can cause product stagnation in the supply chain. Despite the article’s in-depth analysis of ATS, the challenges involved have not been mentioned. In this regard, business individuals seeking to utilize it in their supply chains ought to have a perfect understanding of the shortcomings involved.

Conclusion and future directions

The results of the articles expound on the advantages and importance of perfectly working supply chains. Supply chain management is currently relying on the ATS model that promotes consistency in sales. Cases of unmoving stocks due to the lack of various parts have been eliminated. Many companies have less costly inventories since they retain stocks that meet the existing market demand. Also, the ATO model promotes product generation as per the clienteles’ demand. The introduction of the ATS model has helped many investors utilize alternative components in cases where their suppliers fail to make deliveries in time. This model promotes interactions between customers and their sellers as they decide on whether to accept the alternative products or not. As it stands, companies that utilize this model portray efficient supply chains that are not marred by unnecessary controversies. The ATS system allows investors to acquire efficient and high-quality components that enhance the buyers’ satisfaction levels. Based on the studies’ findings, there exist various issues that should be explored in the future. The authors have focused greatly on the benefits of the ATS models, while no attention has been channeled to its demerits. As such, future studies ought to address the challenges that users of the ATS may encounter. Also, an issue like delays while negotiating with customers on alternative components tend to affect steady sales, hence resulting in reduced revenues. Understanding the benefits and setbacks facing the ATS is essential in promoting the business decision-making process. With all the complex issues addressed, companies will stand a chance of addressing their customer’s tastes and preferences with ease.

References

Ettl. M., Huang, P., Sourirajan, K., & Cheng, F. (2006). Product offering in assemble-to-order supply chains. Journal of Computer Science. 2(1). 1-25.

Ervolina, T., Ettl, M., Lee, Y., & Peters, D. (2007). Managing product availability in an assemble-to-order supply chain with multiple customer segments. OR Spectrum, 31(1), 257-280.

Ervolina, T., Ett., M., & Peters, D. (2006). Simulating order fulfillment with product substitutions in an assemble-to-order supply chain. Proceedings of the 2006 Winter Simulation Conference. 3(2). 2012-2020.