configuretoorder

Configure-to-order (CTO) is a manufacturing and supply chain strategy in which products are produced only after a customer places an order, based on a defined set of configurable options and modules. It relies on a modular product architecture and configuration management to deliver customized products without designing each unit from scratch.

In CTO, customers select features, specifications, and accessories from a configured bill of materials (BOM). The order triggers engineering, sourcing, and production planning to validate compatibility, assemble the required configuration, and plan manufacturing. A configuration rules engine helps enforce valid combinations and constraints.

Lead times reflect both standard manufacturing and the time needed to configure and source components. CTO lead times are typically shorter than fully bespoke projects, and longer than make-to-stock, depending on complexity and supplier reliability.

CTO sits between make-to-stock (MTS) and assemble-to-order (ATO). Unlike MTS, prebuilt variants are not stocked; unlike pure ATO, the product is configured from a defined set of options rather than assembled from arbitrary parts after ordering.

Applications include computer hardware, telecommunications equipment, automotive components, and industrial machinery. Benefits include higher customization with lower finished-goods inventory and improved forecastability. Challenges involve configuration complexity, data integrity, and supplier coordination, requiring integrated ERP/PLM systems and robust BOM management.