Wednesday, 13 August 2014

What is the Difference between Build to Forecast and Build to Delivery System in the Automotive Industry?

There are two main systems that are used in the automotive industry the build to forecast and the build to delivery, but what are the differences between the two?

Build to Forecast
The production planning is developed based on the sales forecasts of the sales companies and the dealers.  The forecast of the market demand is consolidated in the production programming and this determines how many vehicles each factory will build.
  • Orders are checked at the order entry and stored in the order bank until the time when production is scheduled.
  • During the production scheduling the orders from the order bank are turned into the production schedules.
  • Suppliers scheduling gives actual schedules to supplier s.
  • Components are moved around using inbound logistics.
  • Vehicle production takes place.
  • The vehicles are distributed.
Build to Delivery
The build to delivery process begins in a similar way, the sales forecasts are requested several months prior to the end of the calendar year. Discrepancies are examined between the actual sales and the forecast sales. The demand forecasts then become the base for the production programming. The production programming then reconciles the production capacity and the dealership requests.  Changes can be made one month before the production begins.

When the salesperson makes an order the order entry will begin. This order is passed on to the sales company and then to the manufacturer where it will be checked to see if the vehicle is available. Production scheduling will determine the different sources for the required components from suppliers. Suppliers scheduling follows with both long term forecasts and the short term forecasts which are sent to suppliers.

Inbound logistics is the same as in the build to order, when the components are moved and delivered to the manufacturers. Outbound logistics involves train, trucks and ship when the vehicles are transported to the end customer.

No comments:

Post a Comment