Build to order, also called make to order, is a production and business model in which a product is not manufactured until a confirmed customer order specifying its configuration has been received, rather than being built in advance and held in stock. It suits products that are highly customized, produced in low volumes, or expensive to hold as inventory, and operates on a logic similar to just-in-time manufacturing, with components arriving only as needed. Automobiles, bicycles, computer servers and aircraft are commonly cited build-to-order products, with companies such as Dell and BMW noted as adopters of the approach, which lets a business match production closely to actual demand and avoid the cost of unsold stock.
Facts
Core MechanismBuild to order manufacturing starts production only after a confirmed customer order specifies the exact configuration wanted, so the buyer rather than a sales forecast determines what is built and when. It is often run as a just-in-time system in which components arrive only as needed, which suits highly configured or high-value goods such as automobiles, aircraft and computer servers where holding finished inventory is expensive. 1 Cross-Tradition Connections
Associated With
Dell Technologies pioneered the build-to-order model in personal computers, assembling machines only after a customer order was placed.
Build to order is commonly cited for technology products such as computer servers, letting a business match production to demand exactly rather than holding finished stock.
Sources
1. Wikipedia, Build to Order
WikipediaWikipedia: Build to order, lead paragraphQuote, Wikipedia: Build to order, lead paragraph
Build to order (BTO), sometimes referred to as make to order or made to order (MTO), is a production approach where products are not built until a confirmed order is received.
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