Warehouse & Logistics Encyclopedia
Your comprehensive guide to warehouse, logistics, and supply chain terminology. Explore over 100+ industry terms with detailed explanations and practical insights.
Make-to-Order (MTO)
A production strategy where products are manufactured only after receiving customer orders.
Definition
MTO reduces inventory costs and ensures customized production, requiring precise scheduling and supply chain coordination.
Overview
Make-to-order systems enable tailored production, minimizing excess inventory and aligning manufacturing with actual demand.
Role
A production strategy where products are manufactured only after receiving customer orders.
Focus
Make-to-order systems enable tailored production, minimizing excess inventory and aligning manufacturing with actual demand.
Example
A furniture manufacturer produces tables only after a customer places an order with specific dimensions and finishes.
Benefits
- Reduced inventory carrying costs
- Customized product offerings
- Better cash flow management
FAQs
Q: Can you give an example of Make-to-Order (MTO)?
A: A furniture manufacturer produces tables only after a customer places an order with specific dimensions and finishes.
Q: What are the key benefits of Make-to-Order (MTO)?
A: Reduced inventory carrying costs. Customized product offerings. Better cash flow management.