MTO manufacturers do not fulfill orders from inventory. Instead, they make products when they receive orders, making job costing critical for financial
reporting and analysis. Various MTO manufacturers use assemble-to-order, configure-to-order, engineer-to-order, and job shop manufacturing strategies. Some batch process manufacturers also make-to-order.
Control Job Costs and Improve Manufacturing
Throughput with a Future-Proof ERP Platform
Make-to-order (MTO) manufacturers rely on sales forecasts from reps, historical estimate conversion rates, and customer collaboration to plan manufacturing operations. Lack of predictable demand challenges executives responsible for planning and scheduling.
MTO manufacturers often sell custom products used by other manufacturers as opposed to products sold directly to consumers. Examples include products like machine tools, fasteners, and unique industrial machinery. Other MTO manufacturers use batch processing for special chemical formulations. MTO manufacturers tend to be smaller than their make-to-stock (MTS) counterparts due to the complex nature of managing and building customized products sold in smaller volumes with longer sales lead times.
Some MTO manufacturers are contract manufacturers or metal service centers, and others require nesting to schedule multiple production order operations for similar activities like laser cutting. Manufacturers typically keep minimal stock except for common raw materials with purchase-to-order strategies for other components.
Modern ERP applications like Acumatica streamline MTO sales processes with manufacturing estimates, planning bills of material (BOM), embedded CRM for opportunity management, rules-based product configuration, CAD and PLM connectors for BOM definition, material requirements planning, and streamlined order management for custom products.
This industry brief explains critical MTO business processes with an overview of ERP technologies and features. Discover how peers thrive with a modern ERP platform designed for MTO manufacturing.