Make to Order (MTO) is a strategy where production begins after a customer order, allowing customization but leading to longer lead times.

It reduces waste and improves efficiency but requires robust production processes.



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✍ Here is the transcript of the video

▶ Introduction to Make to Order (MTO)

Make to Order (MTO) is a production strategy in which manufacturing starts only after a customer's order is received.

This approach contrasts with traditional "make to stock" (MTS) strategies, where production is based on demand forecasts.

In MTO, each product is tailored to specific customer requirements, which allows for a high degree of customization but may also lead to longer lead times.

This is because the production process only begins when the order is placed, and the product may require unique components or configurations.



▶ Benefits and Challenges of MTO

The MTO strategy can be beneficial in situations where products have a high degree of customization or are very expensive to produce, making it impractical to maintain a large inventory.

It can also be advantageous in industries where products quickly become obsolete.

However, the MTO approach requires a robust and efficient production process to ensure that products can be manufactured and delivered in a timely manner.

It also requires effective communication with customers to accurately capture their requirements.



▶ MTO in Lean Manufacturing

In the context of lean manufacturing, MTO aligns with the principles of reducing waste and increasing efficiency.

It allows for the reduction of waste associated with overproduction and excess inventory, while increasing efficiency by enabling a smooth flow in the production process.



▶ Conclusions

In summary, Make to Order is a production strategy that can lead to cost savings, improved cash flow, and increased customer satisfaction by providing customized products.

However, it requires a well-coordinated and efficient production process to be successful.



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