What is Make to Order and Its Requirements

Make-to-Order manufacturing is a business production strategy that allows consumers to purchase products that are customized to their specifications. An order is manufactured only when the customer have placed the order, thus allowing greater flexibility for the customers. This relieves the problem of excessive inventory, and promotes greater efficiency for any company.

             Make-to-Order helps reduce inventory and lead times, improve capacity management and enhance overall performance. More than the company's performance is the satisfaction that it will be giving to the consumers on the product that they have demanded.

Make To Order Requirement:

1.     Sales order processes and production planning processes must be directly and intelligently connected: To allow sales orders to accurately drive a production order, the two must be intertwined.

2.     In extended supply chains: The configuration occurs remotely and may be connected to a CRM application, which then feeds the new BOM and routing back into the ERP system.

3.     The ERP system must be flexible: MTO manufacturing is known for the irregular and unpredictable nature of customer demand and its impact on scheduling. This requires a highly flexible and responsive system that can delay or speed up various components, often based on customer "demands."

4.     It must support inventory and purchasing: One of the key risks of MTO manufacturing lies with inventory control. Keeping the right inventory low or "available just in time" while ensuring production stays on schedule is key and requires a strong connection between inventory, quality control, engineering, sales, field service and procurement.

5.     The solution must provide proactive order monitoring. In an MTO world, monitoring of individual production orders is a necessity to ensure you're meeting the customer's demands and keeping them informed on order progress and under budget.

6.     It must have a proven track record of helping improve efficiency and reduce waste. Ultimately, the goal with the MTO approach is to manufacture products as efficiently as possible, produce at lower cost, on time and realize higher profit margins. Your ERP solution must enable you to better pinpoint what's contributing to or eroding your profit.