Make To Order (MTO)

What does ‘Make To Order – MTO’ mean

Make to order (MTO) is a business production technique that normally permits consumers to buy items that are customized to their specifications. The make to order (MTO) method just manufactures the end item as soon as the client places the order, creating additional wait time for the customer to receive the item however allowing for more flexible modification compared to acquiring straight from sellers’ shelves.

BREAKING DOWN ‘Make To Order – MTO’

The make to order (MTO) strategy eases the issues of extreme inventory that is common with the standard make to stock (MTS) technique.

Dell Computers is an example of a service that uses the MTO production method in which clients can buy a completely customized computer online and get it in a number of weeks.

Known as Made to Order or Build To Order

Make to purchase, also described as develop to order (BTO) or made to order (MTO), is a manufacturing procedure in which the production of an item starts just after a verified client order is gotten. This kind of production method is referred to as a pull-type supply chain operation since items are only made when there is a firm customer demand. This pull-type production design is used by the assembly market where the quantity required to be produced per product requirements is one or just a few. This includes specialized markets such as building, airplane and vessel production, bridges, and so on. MTO is also suitable for extremely configured products such as computer servers, cars, bikes or items that are very expensive to keep stock.

The Benefit

The primary benefit of the MTO system is having the ability to fulfill an order with the specific product specification needed by the consumer. Sales discounts and finished great inventory is likewise lowered and stock obsolescence is managed. Nevertheless, for an MTO system to succeed, it ought to be combined with proactive demand management. It should likewise be considered that the MTO system is not proper for all types of items.

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