The term make-to-order can be translated as “contract manufacturing” and means that a product is only produced once a customer order has been received. The make-to-order strategy is often seen as an alternative to the make-to-stock strategy (MtS), in which products are produced for anonymous customers in stock without existing customer orders.
Our tip:Thinking in terms of MtO/MtS opposites can lead you down the wrong logistical track. Contract manufacturing is often associated with the production of customized products. This does not necessarily have to be the case. From an economic point of view, it can make sense to produce standard products to customer order only if the end products are expensive and production takes little time. Contract manufacturing does not necessarily mean that the logistical decoupling point is outside the company at the suppliers. In most cases, a finished product is manufactured to customer order from stocked raw materials or semi-finished products (customer order-related finishing with customer-specific pre-production in stock).
