The full form of MTO is Make to Order or Made to Order. It refers to a popular business strategy that allows customers to purchase products customized to their individual specifications. Moreover, it is a manufacturing process in which the final production begins only after the manufacturer receives a confirmed customer order. In this way, MTO differs from the conventional mass production process that includes producing a standardized product to the exact specifications.
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Examples of MTO
You can implement the MTO strategy across different industries ranging from automotive and manufacturing to textiles and electronics. Here are a few examples to give you a better understanding of the same:
- Customized clothing
- Specialty parts
- Customized cars
- Customized computers
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Advantages of Using the Make-to-Order Strategy
The MTO business strategy has become increasingly popular over the last few years. Here are the top advantages of implementing it:
- Businesses can offer a wide range of products to accommodate the requirements of different consumers.
- This strategy can help customers differentiate between your products and the products offered by your competitors in the market.
- Businesses can use the MTO strategy to cut down inventory costs as they do not have to store large quantities of finished products.
- By producing products only after a confirmed order has been placed, companies can improve their cash flow.
- Reduced wastage and improved efficiency are also some of the advantages of using the MTO strategy.
Difference Between MTO vs. MTS
Here are a few key differences between MTO and MTS.
|Make to Order||Make to Stock|
|It refers to a strategy where products are created after receiving the confirmation.||Products are created and stocked based on an estimate of customers’ demand.|
|There is a lag time between the order and final delivery.||There is less time lag.|
|The products can be customized according to the consumer.||Consumers cannot customize their products.|
|The volume of production is small.||The volume of production is high.|
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