Make to Order (MTO)

What is Make to Order?

Make to order meaning is a Manufacturing strategy that enables clients to get a custom-fit product that’s designed to fit their specific requirements. In other words, it allows people to purchase customized products. In this manufacturing process, the seller or producer begins the production of the goods only after the customer has confirmed the order.

Make to order is gaining immense popularity in this age. With more and more people placing orders for customized products that are made to fit their requirements, the demand for such a manufacturing strategy is growing rapidly. The company only starts the manufacturing process after receiving an order from the client. Based on the client’s requirements, the produces processes the order.

MTO increases the waiting time for customers as the production process begins after the order confirmation. Unlike the local products that can be purchased from the retailer’s shelves, make-to-offer products allow a great level of flexibility. It also helps satisfy unique requirements. While the waiting time is longer, the end product satisfies the customer’s needs.

Benefits of Make-to-Order Production Strategy

Commonly referred to as the pull-type supply chain, Make to Order is one of the flexible and most popular production strategies. Now that the products are customized to the individual’s special requirements, these products are produced in a very low quantity. Mostly, it is just a single item or a couple of products that are produced after the order confirmation. That being said, only specialized companies use this approach. The make-to-order production strategy is common in the aircraft, vessel, and bridge construction industries. The manufacturer uses the MTO strategy for all the products that are expensive to store or produce.

The common examples are automobiles, computer servers, and other such expensive items. The system is mainly used to provide the customers with a customized product that fits their requirements. Besides that, it is also used to avoid the over-stock issues that are quite common with MTS (Market to stock) production technique. The best example is Dell computers. The customer can place the order for a customized dell computer online and have the product ready in a few weeks. The major benefit of the MTO production approach is that it enables the manufacturer to produce a product that matches the exact specifications the client needs.

MTO and ATO

It also manages the overstock issues (since the products are manufactured after receiving the orders). While make to order is the best manufacturing and marketing approach, it isn’t a viable option for all types of products. The MTO approach works only for certain kinds of specialized products, such as cars, bicycles, computers, smartphones, servers, aircraft, and other such expensive items.

Another similar production strategy is “assemble to order” (ATO), in which, the goods are produced quickly after the order. In this strategy, the manufacturer produces the required parts, but do not assemble them until the customer orders the product. They assemble the products and send them to the customers after receiving the order.