configurationtoorder

Configuration to order (CTO) is a production strategy in which a product is offered as a family of configurable options drawn from a common platform and is assembled or configured after the customer places an order. The configurability is defined by a product model with predefined modules, features, and constraints, enabling a wide range of end products without starting a new engineering project for each order.

Upon order receipt, a product configurator applies business rules to select components, determine BOM, estimate lead times, check stock, and trigger procurement and manufacturing workflows. Final assembly typically occurs on order, from standard components and sub-assemblies, with optional software, settings, or customization inserted during assembly, testing, and documentation.

CTO sits between Make-to-Stock (MTS) and Make-to-Order (MTO) and is closely related to Assemble-to-Order (ATO). It reduces finished goods inventory and manufacturing lead times compared with pure MTS or bespoke ETO, while offering more customization than MTS. Unlike ETO, CTO generally avoids custom engineering for each order by using a configurable platform.

Benefits include reduced inventory, faster quote-to-cash cycles, improved customer satisfaction through tailored options, and scalable production. Challenges include building and maintaining a robust configurator with validation rules, ensuring component availability, handling complex BOMs, and managing post-sale support for numerous configurations.

Industries commonly employing CTO include consumer electronics, computer hardware, industrial equipment, automotive, and telecommunications equipment.