Unlike mass production models, Make-to-order (MTO) businesses are distinct in their focus on producing customized products tailored to each customer's specifications. This uniqueness presents specific challenges, such as ever-changing customer requirements, complex production planning, and tight lead times.
As we review multiple MTO businesses, it becomes clear to us that they require a flexible approach to managing resources and a smooth collaboration across sales and production teams, which is infeasible while managed manually. In this article, we’ll explore how Rework.com offers tailored solutions to meet these challenges and accelerate MTO operations for greater profitability.
Make-to-order (MTO) businesses focus on producing goods based on individual customer orders, offering a high degree of customization. In contrast to mass production, MTO companies only begin production once an order is placed.
MTO is one of the pull-manufacturing strategies, which means production is based on actual demand, in contrast to push-manufacturing strategies, where production schedule and quantity are determined by forecast.
The key difference between MTO and other production models lies in the customization level. Let's dig deeper in the comparison table below:
| ETO (Engineer to Order) | MTO (Make to Order) | ATO (Assemble to Order) | MTS (Make to Stock) | |
| Customization Level | Very high | High | Moderate | Low |
| Lead Time | Very long (design + production starts after order) | Long (production starts after order) | Moderate (assembly starts after order) | Short (pre-made inventory) |
| Manufacturing Costs | Very high | High (small batches, custom work) | Moderate | Low (economies of scale) |
| Inventory Levels | None | Low to none | Moderate (components stocked) | High (finished products) |
| Examples | Aerospace, shipbuilding | Artisan food, custom furniture | Personal computer, custom furniture | Retail goods, consumer electronics |
For the purpose of this article, we’ll focus on simple MTO businesses such as custom food producers, custom artwork, and custom furniture makers. These businesses, while offering customization, do not require the extensive design and engineering phases typical of ETO. Let’s look deeper into what challenges MTO businesses have to face and how Rework.com can help them optimize operations and maximize profitability.
An MTO business generally has these 4 key functions:
Depending on the business context, the teams can drill down into more specialized functions or combine into one team. For example, there can be an Operation Manager in charge of Production and Quality Assurance sub-teams; or there will be separate Procurement and Logistics teams.
Let’s break it down into three key stages: Order Confirmation & Production Planning, Production & Quality Check, and Delivery & Feedback, with steps within each.
This initial stage sets the foundation for the entire MTO process.
Once planning is complete, the focus shifts to the actual production and ensuring the product meets quality standards.
After production and quality assurance, the product is ready to be delivered and customer feedback is gathered to refine future processes.
Most MTO businesses start small with minimal upfront costs, so they often manage everything manually without any major issues in the beginning. However, as the business grows and they aim to capitalize on their customization strengths, challenges inevitably emerge. We’ve seen many MTO businesses face similar struggles as they scale, including one of our customers, a leading custom cake bakery in the Philippines, which handles several custom cake orders each day and has begun experiencing the limitations of manual processes. Let’s discuss those struggles in more detail:
In many MTO businesses, customers place orders through various channels like Facebook, WhatsApp, or directly with frontline sales staff. These orders are then manually forwarded across departments, leading to a high risk of human error and duplication of work.
A page from a manual form book. Looks familiar?
One of our customers shared their experience about how a single order would be recorded and repeated at least four times – once for the accounting team for reporting, then to the dispatch team, then again to the production head, and each sub-production lead. Imagine the frustration of having the same information go through so many hands, creating room for mistakes and wasting time.
On top of that, there will be no synchronicity as the procurement, production, and logistics team relying heavily on emails, phone calls, or manual notes. Without a centralized system, it’s nearly impossible to keep everyone on the same page, which slows everything down.
The procurement process in MTO businesses faces similar challenges. Without a proper digital system, placing orders for materials is often delayed or incorrect, extending lead times and slowing production.
One of our customers shared that they message the procurement team via WhatsApp whenever they get an order, and they already experience issues like duplicate purchasing or mixed-up orders due to the overwhelming number of group chat messages.
When communication is delayed and scattered, it becomes nearly impossible for managers to keep an eye on the entire operation. Reporting is often delayed, making it difficult to respond proactively to issues.
For example, if a supplier is late or a machine breaks down, the lack of real-time alerts means the issue could go unnoticed until it causes bottlenecks or disrupts delivery schedules. The team simply loses the opportunity to optimize on their efficiency and profits.
“If you can't measure it, you can't manage it.”
– W. Edwards Deming.
At Rework, the focus is always on understanding the unique challenges each business faces. By collaborating closely with our clients, we help pinpoint areas where improvements are needed, whether it’s in the communication, the data reporting, or simply a lack of human compliance.
To effectively implement technology that solves these problems, we often introduce our SPET (Scope-People-Execution-Technology) formula, first by identifying the problems, the goal and the use case of the software in relation to the business context. By applying this formula, businesses can make sure that technology doesn’t just solve surface-level issues but also becomes an integral part of your business that drives real, measurable improvements.
Now that we have identified the main issues, here are some key strategies MTO businesses should adopt to optimize profits and get ready for growth with the help of Rework:
To solve the throbbing problem of disconnected workflows and miscommunication, Rework offers a simplified and organized production workflow by:
Rework can help reduce procurement delays by:
By centralizing operations and data, Rework gives managers access to real-time reports, enabling data-driven decisions:
Optimizing internal processes is just the starting point. By spending less time on manual work, MTO businesses using Rework can now spend more time enhancing customer experience and therefore increasing sales potential by:
While the MTO model allows for flexibility, it also introduces unique challenges when managing manually, such as delayed communication, inefficient procurement, and lack of real-time visibility. These issues can lead to production delays, inefficient workflows and dissatisfied customers.
For small-to-medium MTO businesses struggling with these challenges, Rework provides the ideal solution. If you’re having trouble with misalignment, wasted resources, and prolonged production processes, let’s have a checkup with our business doctor.