Customer-oriented production system for supplier companies in CTO

Configure-to-Order (CTO) is one of the common market interaction strategies for suppliers. In CTO, the customer configures the product where bill of materials, drawings and working plans are elaborated automatically. Traditionally, the Order Penetration Point (OPP) is set too early which induces high costs of stock and long delivery times. For assuring short delivery times and low levels of stock, the supply chain should be triggered according to the customer demand. The paper presents an applied research project performed by a German medium-sized windows and doors production company, where a new customer oriented production system was developed and implemented. The main objective of the holistic production system is to allow a Just-in-Time (JIT) production of windows and doors with short operating costs. It is based on the CONstant Work In Progress (CONWIP) approach needed for assuring short delivery times. More in detail, it presents an approach for medium and short-term production planning needed for triggering JIT the first and second-tier supply chain. As a result, the paper presents design guidelines for production systems with short delivery times in the CTO-market interaction strategy.