Materials
Make-to-Order (MTO)
A production strategy where products are manufactured only after receiving customer orders.
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Updated 2025-10-01
Definition
MTO reduces inventory costs and ensures customized production, requiring precise scheduling and supply chain coordination.
Overview
Overview
Make-to-order systems enable tailored production, minimizing excess inventory and aligning manufacturing with actual demand.
Benefits
- Reduced inventory carrying costs
- Customized product offerings
- Better cash flow management
Example
A furniture manufacturer produces tables only after a customer places an order with specific dimensions and finishes.
Tags
#Make-to-Order#Production#Inventory#Materials#Supply Chain
Related Terms
Make-to-Stock
KANBAN System
Just-In-Time (JIT)
