ERP Term
"Make-to-Order (MTO)"

The MTO manufacturing process defines that the production of an item begins after the customer’s order is received.

Make-to-order (MTO) is a manufacturing process in which the production of an item begins after the customer's order is received. This type of manufacturing is often used for customized or unique products that cannot be produced ahead of time.  

MTO can be contrasted with make-to-stock (MTS), where items are manufactured in advance and stored in inventory until an order is placed. MTO can also be combined with MTS in a mixed-mode approach to provide the benefits of both methods.  

The advantages of MTO include the ability to produce custom products and the efficient use of resources since inventory does not need to be stocked. Disadvantages include longer lead times and the potential for production bottlenecks if customer demand is high.  

MTO is often used in industries such as engineering and construction, where custom products are common. It can also be used in other industries, such as pharmaceuticals and food production, where products have a short shelf life or need to be made to order to ensure freshness. 

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