buildtoorder

Build-to-order (BTO) is a production strategy in which products are manufactured to customer specifications only after an order is received. It aims to minimize finished goods inventory by postponing final assembly and customization until demand is known. BTO is used across industries, including computers, automotive, and industrial equipment, and often relies on modular platforms and configurable components.

In a BTO process, the customer selects configuration options or specifies requirements. The company then plans the production and procures parts specifically for that order, rather than pulling from a prebuilt stock. Components and subassemblies may be kept in stock in generic form, while final assembly is triggered by the order. Efficient BTO operations depend on standard interfaces, flexible manufacturing lines, reliable suppliers, and advanced product configuration systems to manage options, bill of materials, and lead times.

Benefits include reduced inventory costs, lower risk of obsolescence, and greater customization. However, BTO can entail longer lead times compared with make-to-stock, complex scheduling, and exposure to supplier delays. It requires accurate demand forecasting, tight integration across suppliers, logistics, and production planning, and strong customer communication about options and timing.

Compared with make-to-stock (MTS), assemble-to-order (ATO), or configure-to-order (CTO) approaches, BTO sits on a spectrum of customization and demand-driven production. The nomenclature varies by industry, and some sources use BTO interchangeably with CTO or ATO, though subtle differences exist in whether final assembly or configuration occurs after order and how far standardization is maintained.