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Manufacturing to Order

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Manufacturing to Order is also known for its Anglo-Saxon terms Make To Order " MTO " and Build To Order. This way of producing means that a product is made to order. So you don't work with a fixed inventory. Only when an order arrives, the necessary materials for production are requested from suppliers. Also, those companies that don't really produce, but that make some small adjustments to the merchandise, have their own variant of MTO, called assembly by order " Assemble To Order, ATO ". These production methods are opposite to stock manufacturing " Make To Stock, MTS " andassembly by stock " Assemble To Stock, ATS ".

What are the advantages and disadvantages of MTO?

The great advantage of manufacturing on demand is that there is usually never a surplus of stock. When purchasing the materials when there is an order, the exact amount of inventory that'll actually be used " and that'll therefore be sold " is always available. So it's a profitable way to work.

Secondly, this method ensures that the articles are more personalized. A company that designs and manufactures furniture for its customers, for example, will have to choose to work according to the manufacturing method on demand. It's not feasible to have all materials in all formats in stock. Therefore, this company requests the exact materials for a specific piece of furniture from its supplier " s ". A furniture company that works with a fixed inventory will offer many fewer models and designs to its customers.

A disadvantage of the Make To Order may be that customers have a longer delivery period. First, the materials have to reach the producing company before the item can actually be made. In addition, the production of a custom item often takes longer.

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