MTO (Make to Order)

Make-to-order (MTO) is an inventory replenishment strategy used in procurement that involves making and shipping items only after a customer order has been placed. As opposed to the make-to-stock model which involves keeping pre-made items in stock, MTO requires precise planning and coordination of resources and supplies to ensure that the goods are produced and shipped on time and in alignment with customer expectations. By employing MTO, businesses can reduce their storage costs and capitalize on opportunities for increased customization.