Make to Order

Definition

Make to Order refers to a manufacturing strategy where products are produced only after receiving a specific customer order. This order-based manufacturing minimizes inventory levels and enables customer-specific customizations, but requires flexible production systems and precise scheduling to meet delivery deadlines.

Core Principles of Order-Based Manufacturing

Customer Order as Production Trigger: Production begins only after confirmed order. No manufacturing for stock or based on forecasts.

Flexible Production Planning: Production capacities are dynamically allocated to incoming orders. Priorities and schedules adapt to customer requirements.

Individual Product Design: Customer wishes can be considered until shortly before production start. Product variants and special designs are easily possible.

Minimal Inventory Levels: Only raw materials and semi-finished goods are stocked. Finished goods inventory is eliminated completely or significantly reduced.

Application Areas

Mechanical Engineering: Complex special machines and equipment are manufactured customer-specifically. Each machine is unique with individual requirements.

Furniture Industry: Kitchens, built-in wardrobes, and office furniture made to measure. Online configurators enable individual design.

Automotive Suppliers: Special components for different vehicle models. Just-in-time delivery directly to assembly line.

Construction Industry: Prefabricated parts, windows, and doors according to construction drawings. Exact dimensions and specifications for specific building projects.

Benefits of Customer Order-Based Manufacturing

• Capital Relief: Drastically reduced warehousing costs and lower capital commitment
• Customer Orientation: Individual product design and flexible adaptations possible
• Risk Reduction: No unsaleable finished products and reduced obsolescence risk
• Quality Enhancement: Production according to latest technology and newest customer requirements
• Cost Accuracy: Precise calculation possibility for each order

Planning Challenges

Schedule Planning: Delivery dates must be met despite variable order processing. Complex capacity planning and bottleneck management.

Material Availability: Raw materials and components must be procured on schedule. Close coordination with suppliers required.

Capacity Utilization: Fluctuating order inputs require flexible personnel planning. Avoid over- and under-utilization.

Cost Planning: Accurate pre-calculation without scale effects of mass production. Precisely allocate direct and indirect costs.

Production Organization

Job Shop Manufacturing: Machines are grouped by operations. Orders pass through different work stations flexibly.

Project Manufacturing: Large, complex products are assembled at fixed location. Materials and personnel come to the product.

Cell Production: Small teams manufacture complete product groups. High flexibility with manageable complexity.

Flow Production: Standardized variants pass through fixed stations. Efficient with limited variant diversity.

Technological Support

ERP Systems: Integrated order processing from inquiry to delivery. Real-time information about order status.

CAD-CAM Integration: Design data is directly transferred into manufacturing programs. Reduced lead times and error minimization.

Product Configurators: Customers assemble their desired products online. Automatic feasibility check and price calculation.

Manufacturing Execution Systems: Digital control and monitoring of production. Optimized sequence planning and resource allocation.

Quality Management

Order-Specific Testing: Quality plans are created individually for each order. Customer-specific requirements considered.

Documentation Requirements: Complete traceability of all manufacturing steps. Test protocols and material certificates for each order.

Flexible Testing Equipment: Measuring devices and gauges must be suitable for different product variants. Universal or quickly convertible systems.

Customer Involvement: Acceptance tests and interim controls with customer representatives. Early coordination in case of deviations.

Cost Management

Order Calculation: Precise cost allocation for each individual order. Accurately capture material, manufacturing, and overhead costs.

Post-Calculation: Comparison between planned and actual costs. Learning effects for future calculations.

Pricing: Cost-oriented price determination with appropriate profit margins. Consider risks and complexity.

Cost Transparency: Breakdown of cost components for customers. Build trust through open communication.

Supply Chain Management

Supplier Integration: Close cooperation with suppliers for timely material provision. Electronic order transmission and delivery calls.

Inventory Management: Optimal balance between availability and capital commitment. ABC analysis for strategic warehousing.

Procurement Logistics: Just-in-time delivery for order-relevant materials. Reduced storage costs with high availability.

Supplier Development: Continuous improvement of supplier performance. Joint optimization projects and qualification.

Digitization and Industry 4.0

Smart Factory: Networked production systems communicate in real-time. Automatic adaptation to order changes.

IoT Integration: Sensors monitor production progress and machine utilization. Transparency over entire manufacturing process.

Artificial Intelligence: Algorithms optimize scheduling and resource allocation. Learning systems continuously improve planning.

Digital Twin: Virtual replicas enable simulation before production start. Process optimization without risk.

Challenges and Solutions

Complex Planning: Advanced Planning Systems support capacity and schedule planning. Simulation of different scenarios.

Fluctuating Utilization: Flexible working time systems and personnel leasing balance demand fluctuations. Cooperation with other companies.

Longer Delivery Times: Transparent communication and realistic delivery commitments. Customer is informed about progress.

Higher Complexity: Standardization of processes despite individual products. Modular design reduces variant diversity.

Make to Order develops through digitization and automation into an increasingly attractive manufacturing strategy that combines customer individuality with economic efficiency.