3 min Read Jun 30, 2021
Make to Stock (MTS) is a production strategy in which a manufacturer produces goods in advance of customer orders, based on demand forecasts, and holds the finished products in inventory ready for immediate shipment upon order receipt. MTS is appropriate for products with stable, predictable demand, long production lead times, and low customisation requirements — such as FMCG products, standardised consumer goods, and commodity chemicals. The primary advantage of MTS is rapid order fulfilment; the key risk is inventory obsolescence and excess stock if demand forecasts prove inaccurate. For investors on Ventura Securities analysing manufacturing and consumer goods companies, MTS companies typically carry higher inventory levels and face greater working capital requirements than ATO or MTO peers — making inventory turnover ratios and days of inventory outstanding (DIO) critical metrics for assessing operational efficiency and balance sheet quality.
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